ASX 200 Live Updates – Friday, 23rd May

ASX Live Coverage – Friday, May 23rd

Welcome to our live coverage of the Australian Securities Exchange (ASX) for May 23rd. We are excited about this trial format and encourage you to refresh for the latest updates. We appreciate any feedback on how we can improve your experience.

Auckland Airport Implements Fee Reductions

9:10 AM – Auckland International Airport has announced a reduction in average airline charges per passenger over the next two financial years. The cuts are as follows:

• A decrease of NZ$1.08 for regional travel, bringing charges to NZ$8.95.
• A reduction of NZ$1.74 for domestic jet travel, adjusting fees to NZ$12.75.
• An international travel drop of NZ$4.86 down to NZ$38.86.

These changes follow the Commerce Commission’s ruling that the airport was targeting excessive returns. Although reducing regulatory uncertainty, the alterations signify lower returns anticipated due to mixed passenger volumes and escalating cost pressures. Recent downgrades to near-term earnings forecasts reflect these concerns, with analysts expressing caution regarding future pricing power in light of potential changes in depreciation methods.

Oil Market Watch

9:10 AM – Oil prices faced downward pressure, with Brent crude slipping 0.9% to US$63.90 per barrel. This follows reports from Bloomberg indicating that OPEC+ members are deliberating a potential third consecutive production hike of 411,000 barrels per day in July:

• This figure surpasses the initially planned increase by more than threefold, although no final consensus has been ratified.
• While OPEC+ states that the supply increase aims to meet demand, various sources suggest motives of reining in overproducing members to reclaim market share.
• A survey indicated that 25 out of 32 traders and analysts foresee this output hike being approved.

Leadership Change at Rio Tinto

9:00 AM – Jakob Stausholm, the Chief Executive of Rio Tinto, has announced his intention to step down later this year following a comprehensive succession process. Since joining the mining giant in 2018 as Executive Director and CFO, and ascending to CEO in January 2021, Stausholm has focused on restoring stakeholder confidence after the Juukan Gorge incident, pivoting towards energy transition metals, and advancing the Oyu Tolgoi copper project in Mongolia. The company has confirmed that a rigorous selection process is already underway to find his successor.

Key Highlights from Livewire

• Brambles Surprising Fund Managers: Brambles, an Australian logistics and pallet company, is gaining attention globally, despite the ASX’s high valuations, holding over 10% among fund managers. Its capacity to withstand recent sales growth concerns and achieve a 55% stock rise in 2025, outpacing the ASX 200, underscores its strong market position.

• Undervalued Energy Sector: Portfolio manager Tim Zhao cites potential recovery catalysts in the ASX energy sector, which has seen a marked underperformance, down 20% in 2024 and an additional 10% in 2025. He highlights Woodside Energy and Viva Energy as attractive investment opportunities due to their perceived strong valuations.

• Stock Recommendations Amidst Volatile Markets: Analysts in Livewire’s Buy Hold Sell series advocate for significant growth stocks in sectors where Australia excels, particularly healthcare. Recommended for purchase are Life360 and Catapult, while Kelsian is viewed with caution due to debt issues and slow growth.

Market Dynamics

8:45 AM – Global markets experienced a relatively quiet overnight session, with a last-minute selloff bringing the S&P 500 down to a neutral position. Key factors influencing market sentiment include:

• Bond Yields Stabilise: Following a disappointing 20-year note auction, most US bond yields fell by 3-6 basis points, providing slight relief to markets.

• Shifting Sentiment: The AAII sentiment index noted an increase in bullish investors to 37.7%, outnumbering bearish investors (36.7%) for the first time since January.

• Political Developments: House Republicans are poised to pass a reconciliation bill that includes adjustments such as raising the SALT deduction cap to $40,000 and revising Medicaid work requirements.

Morning Update

8:40 AM – S&P/ASX 200 futures are up by 22 points (+0.26%), indicating a rebound from previous losses, which saw a decline of -0.45%.

For those new to our coverage, be sure to catch up with today’s Morning Wrap for further insights.