ASX 200 Live Updates – Friday, 8th August

ASX Live Coverage – August 8, 2023

Welcome to our live coverage of the Australian Securities Exchange (ASX) for Friday, August 8. We are testing this new format to provide timely updates, beginning pre-market and continuing throughout the day until approximately 2:00 PM AEST. Please refresh the page for the latest information.

QBE Insurance Surpasses 1H25 Earnings Expectations

[9:26 AM] QBE Insurance has reported a stronger-than-anticipated result for the first half of financial year 2025 (1H25), marked by:

• Continued positive momentum and reduced impact from discontinued lines.
• An improved combined operating ratio at 92.8%, down from 93.8% previously, attributed to favourable central estimate developments and catastrophe management.

Key highlights from QBE’s 1H25 report include:

• Gross written premiums rose by 6% to $13.82 billion, slightly above estimates of $13.76 billion (0.4% positive surprise).
• Combined operating ratio registered at 92.8%, outperforming the expected 93.1% (0.3 points ahead).
• Catastrophe claims ratio at 5.4%, with costs at $479 million against an allowance of $549 million.
• Adjusted net profit increased by 25.7% to $997 million, surpassing the forecast of $841.3 million (18.5% above expectations).
• Interim dividend ascended by 29% to 31 cents per share, slightly missing the anticipated 31.9 cents (2.8% shortfall).

For the full financial year, QBE anticipates:

• Mid-single-digit growth in gross premiums written.
• Combined operating ratio of 92.5%, aligning with market predictions.
• A 1H25 core fixed income yield stabilising at 3.8%.

Potential Blackstone Takeover of Iress

[9:14 AM] Iress is currently in discussions with Blackstone regarding a buyout valued at approximately $1.9 billion, with an offer likely to exceed $10 per share as reported by the Australian Financial Review (AFR). Thoma Bravo is also interested, adding competition for the acquisition.

Recent waves of acquisitions in the Australian software sector include Infomedia ($651 million), Nearmap ($1.1 billion), Altium ($9 billion), Nitro Software (over $500 million), and Bigtincan (undisclosed).

Sezzle’s Struggles and Impact on Zip

[9:12 AM] The performance of Zip could be influenced by contrasting results from Block and Sezzle. While Block is diverse with products like Cash App, Sezzle’s underwhelming results may dampen sentiment for the sector.

Sezzle Faces Decline Post-Weak Guidance

[9:08 AM] Sezzle, which was delisted from the ASX in early 2024, saw a 19% drop in after-hours trading due to guidance that fell short of expectations despite a strong Q2 performance. Key figures include:

• Revenue of $98.7 million, exceeding expectations of $94.9 million (4% beat).
• Adjusted EBITDA of $37.9 million, above the $33.3 million consensus (13.8% beat).
• Full-year EPS guidance was revised down to $3.25, missing the $3.43 forecast (5.3% shortfall).
• FY revenue growth forecast of 60-65%, aligning with the 63% consensus.

After a notable 570% increase in the past year, the company cannot afford such misses.

Block Sees Share Rally Following Strong Q2 Results

[9:05 AM] Shares in Block have risen by 5.4% in after-hours trading, driven by strong Q2 results, including:

• Revenue at $6.05 billion, slightly below the $6.30 billion estimate (4% miss).
• Adjusted EBITDA reaching $891 million, surpassing the expected $827.8 million (7.6% beat).
• EPS soared by 32% to 62 cents, far above estimates of 47 cents (31.9% beat).

Block’s management anticipates acceleration in gross profit growth by Q4.

Overnight Economic Data Highlights

[8:58 AM] Noteworthy U.S. economic indicators released include:

• Continuing jobless claims now at 1.97 million, above the expected 1.95 million, representing the highest level since November 2021.
• Several Fed policymakers are indicating a slowdown in the labour market and are open to a rate cut in September.
• NY Fed’s July consumer expectations survey shows an uptick in one-year inflation expectations to 3.1%.

Apple Shares Surge on Tariff Exemptions

[8:55 AM] In response to Trump’s newly imposed tariffs on chip imports, Apple is set to invest an additional $100 billion in domestic manufacturing as part of its American Manufacturing Program. This raises its total U.S. commitment to $600 billion, which has led to an 8.5% surge in shares over the past two sessions.

Trump Tariffs Implemented

[8:51 AM] Trump’s tariffs have taken effect, pushing the average U.S. tariff rate to 15.2%, marking the highest level in nearly a century. Various countries have either negotiated different rates or are facing higher tariffs.

Light & Wonder Shares Decline Post-Results

[8:46 AM] Light & Wonder’s shares dropped by 2% following a mediocre Q2 performance, and a notable 14% overnight in NYSE trading. Key results showed:

• Q2 revenue of $809 million, below expectations of $851.1 million (4.9% miss).
• Adjusted EBITDA was slightly above expectations but faced downwards revisions from analysts.

Market Overview

[8:40 AM] The ASX 200 futures have dipped by 25 points (-0.28%) as the implications of Trump’s global tariffs unfold.