ASX Live Coverage: Key Updates on June 5

Welcome to our live coverage of the ASX for Thursday, June 5. Be sure to refresh for ongoing updates, and please share your feedback to help us improve!

Catapult Acquires Perch for $27 Million

[9:35 am] Catapult Group has announced the acquisition of Perch (Catalyft Labs) for approximately $27.7 million (US$18 million) via cash and shares. Perch, which is renowned for its advanced athlete monitoring technology, offers a compact 3D camera designed for weight racks that assesses movements, tracks performance, and delivers real-time feedback.

Catapult will initially pay $3 million in cash from its existing reserves, while the remaining balance will be settled in shares across four payments. Perch’s shareholders could potentially gain up to $10 million in shares based on annual contract value (ACV) growth milestones set for the period from June 2027 to May 2028. Currently, Perch’s ACV stands at $2.5 million, in contrast to Catapult’s reported ACV of $101.2 million for FY25.

Woolworths NZ Confronts Regulatory Challenges

[9:25 am] The New Zealand Commerce Commission is targeting practices that may reinforce the dominance of major supermarkets, which it believes adversely affects consumers and smaller suppliers. Grocery Commissioner Pierre van Heerden indicated that the current market dynamics are not adequately serving Kiwi consumers and are detrimental to emerging competitors.

The Commission has proposed several regulatory measures, including:

• Limiting retail charges to suppliers by barring fees for stocking shelves or for perishable goods rendered unsellable under a retailer’s control.
• Mandating that grocery retailers maintain transparent records to validate compliance during negotiations and payment deductions without supplier consent.
• Requiring retailers to reimburse suppliers if promotional goods are sold at elevated prices post-promotion.
• Prohibiting retaliatory actions from retailers against suppliers exercising their rights.

These developments are expected to have a limited effect on Woolworths, whose New Zealand division contributes only 11% of the Group’s third-quarter FY25 sales.

ASX Firms Join EU’s Strategic Raw Materials Initiative

[9:15 am] The European Commission has endorsed a list of 13 Strategic Projects for sourcing raw materials located outside the EU, aimed at diversifying supply and enhancing economic security. Among these projects, three ASX-listed companies have been selected:

• Rio Tinto (ASX: RIO) for its Jadar Lithium Project.
• Evion Group (ASX: EVG) for its Maniry Graphite Project.
• Sarytogan Graphite (ASX: SGA) for its Sarytogan Graphite Project.

The overall capital required for these 13 strategic projects is estimated at €5.5 billion to commence operations, with a commitment to collaborate with involved third countries for project development.

US Dollar Index Drops to Low Levels

[9:05 am] The US Dollar Index has dipped below 99, reaching its lowest point since April’s Liberation Day at approximately 98. This decline has been attributed to disappointing US economic data, a market shift towards a more dovish Federal Reserve policy, and widening concerns regarding US economic exceptionalism that have bolstered other safe-haven currencies, including the Euro, Yen, and Swiss Franc.

Notably, Deutsche Bank has reported near-record highs in US dollar exposure and suggested that the previous uptrend could be cyclical. Meanwhile, Morgan Stanley predicts a further decline of roughly 9% in the dollar’s value over the next year.

Highlights from Livewire

• The Rally of Small Caps: Small-cap stocks are expected to rebound, fueling a shift towards undervalued companies, although there are risks associated with inflation and policy changes.

• ASX Growth Stocks vs Global Peers: Australian growth companies like Pro Medicus and WiseTech are highlighted for their innovations but may be overshadowed by their global counterparts, which could offer better scales or valuations for discerning investors.

• Emerging Growth Stocks: Newly listed companies on the ASX like Cuscal, Symal Group, and Bhagwan Marine present potential earnings opportunities, despite their initial lukewarm receptions.

Stock Market Overview

[8:55 am] Major US indices exhibited mixed performances, with the S&P 500 remaining flat, the Russell 2000 and Dow down by 0.2%, while Nasdaq saw a 0.3% rise.

• The US’s May ADP private payrolls were significantly below projections at 37,000, down from 60,000 last month.
• The May ISM Services PMI fell to 49.9, indicating contraction and marking the lowest level since June 2024, primarily due to a drop in new orders.
• The US 10-year yield has decreased by 10 basis points to 4.35%, the lowest since early May.

Morning Snapshot

[8:50 am] The S&P/ASX 200 futures indicate a flat opening, dipping slightly by 1 point (-0.01%), having come close to its record high set on February 14.

For additional details, don’t forget to check out our morning wrap!