Category: Stock Market

ASX coal shares had a volatile year in FY24. The price of coal sank to lows of around US$115 per tonne in February, before rebounding sharply and peaking at around US$147/tonne by May.

They have since settled lower at US$132/tonne.

This hasn’t stopped investors from lifting the bid on two Aussie coal giants on Wednesday.

Whitehaven Coal Ltd (ASX: WHC) and Yancoal Australia Ltd (ASX: YAL) both touched new 52-week highs around lunchtime on Wednesday.

Whitehaven shares hit highs of $8.95 shortly after midday, while Yancoal soared to $7.18 around the same time. Both have since cooled off slightly.

Here’s a closer look at what may be behind the surge in these ASX coal shares.

ASX coal shares hitting new highs

We can likely attribute today’s rally to a combination of strong demand for coal, attractive dividends, and positive market sentiment.

Despite no market-sensitive news since May, Yancoal shares have been on an upward ascent. On 1 May, they were trading at $5.54 apiece and are now at $7.14 — a 28.3% increase.

According to my colleague Bernd, the recent forced halt in production at Anglo American‘s Grosvenor coking coal mine in Queensland due to an underground fire has also boosted investor interest.

Production is expected to be down for several months, which has created a bullish sentiment for other ASX coal shares like Yancoal.

Yancoal shares are up more than 50% over the past 12 months, outpacing the S&P/ASX 200 Index (ASX: XJO) by more than 43%.

Whitehaven Coal (ASX: WHC)

Whitehaven shares have also seen significant gains in recent weeks. The stock closed out trading in June at $7.65 per share before exploding to its yearly high on Wednesday.

It has whipsawed around 29% into the green over the past 12 months.

While the company has not released any market-sensitive news today, the rise also looks to be linked to strength in the basket of ASX coal shares, supported by strong global demand and favourable coal prices.

Global demand for coal is expected to grow, particularly from major importers like India and China. China plans to add 70 gigawatts of coal capacity this year, while India’s coal imports increased by 25% in 2023.

This robust demand could support higher coal prices and benefit Australian coal producers, which would be positive for ASX coal shares.

The company’s robust performance over the past year, along with attractive dividends, has made it a standout performer on the ASX.

Foolish takeaway

Both Whitehaven Coal and Yancoal have hit new 52-week highs as ASX coal shares catch a bid today. Even at the yearly highs, Yancoal trades at a price-to-earnings (P/E) ratio of 5, while Whitehaven has a P/E ratio of 5.50.

The post 2 ASX coal shares smashing new 52-week highs on Wednesday appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why Arafura Rare Earths, Ora Banda, Superloop, and Whitehaven Coal shares are rising today
• Here are the top 10 ASX 200 shares today
• The Yancoal share price just rocketed to new 52-week highs. Here’s why
• Why are ASX 200 coal shares smashing the market today?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Now that we’ve entered FY25, it’s time to think about where the general direction of the market is heading. The S&P/ASX 200 Index (ASX: XJO) has drifted less than 2% into the green this year to date.

Meanwhile, AMP Ltd (ASX: AMP) shares have caught a bid this year and have held gains of 17.5%, despite trending lower since June.

The firm remains optimistic about the continued rally in share markets in FY25.

According to Dr Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Investments, the past financial year saw robust returns for investors.

These were driven by falling inflation, central banks cutting rates, and better-than-expected economic conditions.

“There has been a wall of worry for investors over the last year, but as is often the case, share markets climbed it,” Oliver noted.

Here’s the outlook for ASX shares in FY25 according to the AMP economist.

AMP sees continued market optimism

AMP identifies several key themes influencing the Aussie markets going forward. Firstly, inflation has been on a downward trend globally, which has supported global market rallies. Australian inflation meanwhile has lagged, but is expected to follow trend, Oliver says.

Central bank policies are also playing a significant role. After slowing the pace of interest rate hikes, central banks worldwide – including in Europe and North America – have begun cutting rates, a trend that’s expected to continue and support market performance.

AMP, therefore, expects more volatility in stocks but believes that markets will continue to rise amid improving economic data.

As Dr Oliver explains:

Central banks in Switzerland, Sweden, Canada and the Eurozone have now started to cut with the US and UK expected to start around September…

…Our base case is that share markets can continue to rally as more central banks join in cutting rates as inflation continues to fall towards central bank targets, including the Fed from around September and the RBA from around February enabling bond yields to fall and investors to focus on stronger growth in 2025. 

Also noting:

Our base case is for more constrained returns in the current financial year of 6-7% down from the 9% or so seen over the last year. However, the risk of another correction in shares is high and investors should allow for a more volatile ride than seen over the last year.

Global economic growth is also seen to be resilient, particularly in the US. This is despite regions like Europe and Japan “flirting with recession”. Additionally, AI developments have boosted tech stocks, particularly in the US, contributing to the market’s strength.

We saw this very early in the year and then once again around the end of the first quarter when large tech and artificial intelligence (AI) shares – such as NVIDIA Corp (NASDAQ: NVDA) – reported bumper earnings.

Oliver says that despite these positive trends, geopolitical risks remain high. The war in Ukraine, tensions in the Middle East, and the upcoming elections in France and the US all pose potential threats.

Forecast for balanced growth super funds

AMP suggests balanced growth superannuation funds could also return around 6%-7% in the coming year. This is around 3 percentage points lower than the previous year.

This more conservative outlook considers the potential for market corrections and increased volatility.

Many investors hold shares like AMP in their super funds.

With short-term volatility, one might be tempted to hit the “sell” button on their brokerage accounts. Or, change investment strategy in their super.

But critically, Oliver – like all the investing greats: Buffet, Munger, Dalio, and so on – advises investors to maintain a long-term view and not be swayed by short-term market movements.

“The key is to adopt a long-term strategy and turn down the noise”, Dr Oliver said.

“Short term forecasting and market timing is fraught with difficulty and it’s best to stick to sound long term investment principles.”

The post Why AMP says share markets ‘can continue to rally’ in FY25 appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Almost all of us have a superannuation fund. After all, in Australia almost all workers must have 11.5% of their paycheques diverted into a super account, quarantined for our retirements.

Most Australians who don’t have a self-managed super fund (SMSF) will probably find that their super is going into something known as a ‘balanced’ fund.

Super providers offer a range of different investment options for our super, graded by the risk and reward spectrum. You can opt to have your cash invested in purely growth assets like ASX shares, or else conservative options like cash and government bonds.

Most super providers offer a happy medium though – the balanced fund. This option aims to balance the aim of achieving the best returns on investment possible with the desire of most Australians to limit volatility within their super funds.

As such, your typical balanced fund will invest your money in a range of assets, including aggressive and conservative investments. This means a balanced fund will normally have a mix of ASX shares, international shares, bonds, and cash, amongst other assets within its portfolio.

But how much does your typical balanced super fund return to you each year? That’s what we’ll be diving into today.

Thanks to some analysis by superannuation research firm Chant West, we have a pretty good idea.

What is the average return of a ‘balanced’ superannuation fund?

According to Chant West, the average Australian balanced fund (41%-60% of growth assets) returned 9.4% over the 12 months to 31 May 2024.

The average return over the three years to 31 May was 5.3% per annum. That grew to 6.7% per annum over five years and 7.2% over ten.

The numbers do show though, that choosing a balanced fund and chasing a less volatile portfolio does have a cost. The same data shows that an ‘all-growth’ fund delivered a 13.7% return over the 12 months to 31 May. This fund type also delivered an average of 6.9% per annum over three years, 8.8% over five, and 8.7% over ten.

That extra point or two can make a big difference over a working lifetime.

In contrast, your typical conservative super fund returned just 5% over the year to 31 May and averaged 4.3% per annum over the prior ten years.

Deciding on the type of super fund to go with should be a decision you and your financial advisor make, taking into account your individual circumstances. For example, if you are only a few years away from retirement, it is generally wise to take a conservative approach.

But even so, this data makes for some interesting reading.

The post What are the average returns for balanced superannuation funds? appeared first on The Motley Fool Australia.

More reading

• Why AMP says share markets ‘can continue to rally’ in FY25
• Which ASX lithium shares are financially primed to survive this rut?
• Top brokers name 3 ASX shares to buy today
• Own NAB shares? Here’s how much you’re about to get paid in dividends
• ASX 200 stock slips on $145 million impairment

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two years ago, ASX lithium shares were a hotbed for incredible returns. Today, the once dazzling sector is ground zero for some of the poorest performances on the Australian share market over the past year.

The electrifying commodity lithium has experienced an unceremonious price collapse. From its peak in November 2022, the price of lithium carbonate is down roughly 85%, bringing it back in line with prices witnessed in 2021 — a change undoubtedly challenging the economic viability of many recent lithium developments.

Booms and busts are common among commodities. However, the companies involved need to survive if investors are to benefit from lithium prices rising again.

So, how financially insulated are some of the most popular lithium names?

Financial fitness of ASX lithium shares

There is no better position than being a company with positive free cash flows during distressing times — that is, more cash coming in than going out. Realistically, such companies can benefit from weak conditions by making strategic acquisitions while competitors struggle.

Conversely, hard times are the enemy if a company is short on cash and has low cash flows. It can pay to understand which businesses are financially sound and which are possibly limping along.

The table below briefly summarises the financial standing of several popular ASX lithium shares.

ASX-listed company	Cash and equivalents (millions)	Free cash flow (millions)	Cash runway (months)	Debt-to-equity ratio
Mineral Resources Ltd (ASX: MIN)	$1,383.0	-$1,528.0	11	113.9%
Pilbara Minerals Ltd (ASX: PLS)	$2,144.0	$677.4	∞	14.1%
IGO Ltd (ASX: IGO)	$353.3	$1,047.0	∞	0.0%
Liontown Resources Ltd (ASX: LTR)	$516.9	-$519.1	12	38.4%
Vulcan Energy Resources Ltd (ASX: VUL)	$79.7	-$117.0	8	0.0%
Core Lithium Ltd (ASX: CXO)	$125.4	-$98.1	15	0.0%
Patriot Battery Metals Inc (ASX: PMT)	$73.0	-$107.8	8	0.0%

Western Australian mining giant Mineral Resources may look to be in a precarious financial position based on the above. As of 31 December 2023, the iron ore and lithium miner showed a highly indebted balance sheet and negative free cash flows, producing a forecast cash runway of 11 months.

Since then, Mineral Resources has taken action by ceasing operations at its Yilgarn Hub and selling 49% interest in its Onslow Iron project for $1.3 billion. Core Lithium took a similar course of action in January, suspending mining at its Finnis mine to conserve capital.

In comparison, Pilbara Minerals and IGO are still cash flow positive with little or no debt. This may suggest these two ASX lithium shares are better placed to weather extended weakness. However, it’s worth noting that even these miners are experiencing declines in their free cash flows.

This year, companies like Liontown Resources, Vulcan Energy Resources, and Patriot Battery Metals have turned to debt and equity markets to shore up their balance sheets. In doing so, they have likely extended their cash runways beyond the figures above.

Is the worst yet to come?

If we can roughly estimate how long a company can sustain itself, the next question to consider is how long the tough times will last.

Unfortunately, none of us are fortune tellers. Nevertheless, analysts have crunched the numbers to obtain a best guess, and the general consensus is bleak.

Analysts from Citi, UBS, and Wood Mackenzie all expect lower lithium prices to come. For example, Wood Mackenzie thinks spodumene could hit rock bottom at around US$1,000 per tonne and stay suppressed until 2028.

If true, even ASX lithium shares with the most fortified financials may face pressure.

However, if the International Energy Agency’s estimates are accurate, the ones that survive could flourish. According to its Global Critical Minerals Outlook 2024 report, a lithium supply deficit is expected by 2030 as demand for electric vehicles takes hold, as shown above.

The post Which ASX lithium shares are financially primed to survive this rut? appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• This ASX stock just announced a special dividend with a 20% yield
• Should you buy Liontown shares after its update?
• Top broker says Pilbara Minerals shares are ‘a super buy at these levels’
• Is it time to buy FY24’s worst-performing ASX shares?

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Many of Australia’s top brokers have been busy adjusting their financial models and recommendations again. This has led to the release of a number of broker notes this week.

Three ASX shares that brokers have named as buys this week are listed below. Here’s why their analysts are feeling bullish on them right now:

BHP Group Ltd (ASX: BHP)

According to a note out of Goldman Sachs, its analysts have retained their buy rating and $48.40 price target on this mining giant’s shares. The broker believes the Big Australian’s shares are attractively priced even though they trade at a premium to rival Rio Tinto Ltd (ASX: RIO). Goldman thinks this premium is justified due to its ongoing superior margins and operating performance, particularly in Pilbara iron ore where it maintains superior free cash flow per tonne compared to peers. In addition, the broker remains very positive on copper and met coal and likes the optionality of BHP’s US$20 billion+ copper pipeline. The BHP share price is trading at $43.41 today.

Guzman Y Gomez Ltd (ASX: GYG)

A note out of Morgans reveals that its analysts have initiated coverage on this quick service restaurant operator’s shares with an add rating and $30.80 price target. The broker is feeling positive about Guzman Y Gomez due to its strong long term growth potential and operating leverage. In respect to the former, the broker believes the company can achieve its aspirational target of 1,000 restaurants in Australia. This is by opening 30-40 restaurants each year. Though, it is worth noting that Guzman Y Gomez’s shares are trading at approximately 400x estimated FY 2025 earnings based on Morgans’ estimates. The Guzman Y Gomez share price is fetching $25.10 on Wednesday afternoon.

Liontown Resources Ltd (ASX: LTR)

Analysts at Bell Potter have retained their speculative buy rating and $1.85 price target on this lithium developer’s shares. This follows news that the company has secured funding through a five-year US$250 million convertible note to LG Energy Solution. The broker believes the funding is a sensible solution to remove the onerous terms associated with traditional bank debt. In light of this, it thinks the company is fully funded to free cash flow. Outside this news, Bell Potter is very positive on the 100% owned Kathleen Valley lithium project. It notes that it remains highly strategic with initial production imminent, a long mine life, and tier-one location. The Liontown share price is trading at 93 cents this afternoon.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Why APA Group, Chalice Mining, Guzman Y Gomez, and Monadelphous shares are falling
• I’d buy BHP shares to generate $1,000 of monthly passive income
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investors who own ASX bank shares, like National Australia Bank Ltd (ASX: NAB), look forward to two dates on the financial calendar more than most. Bank stocks like NAB are well known for paying some of the largest, fattest, and most consistent dividends on the ASX.

So it makes sense that bank shareholders would hold a special affinity for the day that they receive these fat, and usually fully franked, dividends.

Well, luckily for NAB shareholders, today is one of the two days this year that they will receive a dividend payment.

Back in May, we covered NAB’s latest earnings report, covering the half-year ended 31 March. As we went through at the time, these earnings were well-received, with NAB shares surging as a result. This surge was despite the bank reporting a 0.9% drop in operating income to $10.14 billion for the six months to 31 March. That was alongside a 12.8% decline in cash earnings to $3.55 billion.

Despite these sobering metrics, NAB still announced an additional $1.5 billion share buyback program. As well as an increase to its interim dividend for 2024.

How much is the latest NAB dividend worth?

The bank revealed that its latest dividend would be worth 84 cents per share, fully franked. That’s a 1.3% rise over last year’s interim dividend, which was worth 83 cents per share. It’s also the same value as NAB’s last dividend. That was the final payment of 84 cents per share that we saw doled out back in December. Both of these payments came fully franked as well.

As we warned back in May, the ex-dividend date for this latest NAB dividend was set for 7 May. So if you didn’t own NAB shares as of 6 May’s market close, you’ll miss out on this shareholder paycheque.

But for eligible investors, the long wait for this dividend is finally over. Today is dividend payday. Yep, shareholders will be getting the proverbial cheque in the mail sometime this Wednesday. If someone owned 500 NAB shares right now (worth approximately $17,810 at current pricing), they can expect to receive $420 in dividend cash today.

If shareholders instead selected the optional dividend reinvestment plan (DRP) by 9 May, they will receive additional NAB shares in lieu of the traditional cash payment.

At the time of writing, NAB shares are down 0.17% at $35.63 each. At this pricing, NAB is currently trading on a dividend yield of 4.72%.

The post Own NAB shares? Here’s how much you’re about to get paid in dividends appeared first on The Motley Fool Australia.

More reading

• Own NAB shares? You just got a 44% return in FY24
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Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) stock APA Group (ASX: APA) has dropped today after revealing a painful $145 million writedown. APA is currently down 0.69% at $7.90, while the ASX 200 is up 0.13%.

APA is an energy infrastructure business that owns and operates a large network of gas pipelines around Australia. It also has energy generation assets including solar, wind and gas, plus electricity transmission assets.

Impairment of APA’s Sydney ethane pipeline

APA announced today that it expected to recognise a non-cash impairment of approximately $145 million, before tax, to the Moomba Sydney ethane pipeline (MSEP).

This impairment would result in a full write-down of the MSEP’s current book/balance sheet value. APA intends to include this accounting charge in its financial statements for the year ended 30 June 2024, being FY24. However, the result is still subject to finalisation upon completion of the auditor’s review process.

APA noted the impairment was “non-cash”, representing approximately 1% of its market capitalisation, and had no impact on its liquidity. It also affirmed there was no change to APA’s FY24 distribution guidance or its FY24 underlying earnings before interest, tax, depreciation and amortisation (EBITDA) guidance.

The ASX 200 stock expects to pay an FY24 annual distribution of 56 cents per security and generate underlying EBITDA of between $1.87 billion and $1.91 billion.

Why is the asset being impaired?

The MSEP is a ‘single user’ pipeline, which was used to transport ethane to plastics manufacturer Qenos Pty Ltd. This company recently entered into voluntary administration and has announced that it does not expect to restart its manufacturing facility.

APA noted that Qenos is the only likely customer with demand for ethane to be transported along the MSEP. The MSEP is the ASX 200 stock’s only asset that transports ethane and APA’s only long-distance single-user pipeline.

Could the pipeline be used for something else?

The energy infrastructure business said a range of potential alternative uses for the MSEP were being assessed, including the possible conversion of the asset to transport and store natural gas, to service the growing demand for capacity on APA’s east coast gas grid.

However, APA warned it would take some time to fully assess the potential alternative uses of the MSEP.

APA pointed out that accounting standards required an assessment of the asset’s carrying value to be finalised before completing the FY24 accounts. So, the company has taken a conservative approach and assumed the pipeline will not be utilised for the foreseeable future. Therefore, it expects to impair the asset’s full balance sheet value.

APA share price snapshot

Since the start of 2024, the APA share price has fallen 7.3%, and the ASX 200 has risen 1.5%.

The post ASX 200 stock slips on $145 million impairment appeared first on The Motley Fool Australia.

More reading

• Why APA Group, Chalice Mining, Guzman Y Gomez, and Monadelphous shares are falling
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• Here are the top 10 ASX 200 shares today
• What the RBA minutes imply for the ASX 200 and higher interest rates

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is back on form and edging higher on Wednesday. At the time of writing, the benchmark index is up 0.2% to 7,731.9 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling:

APA Group (ASX: APA)

The APA Group share price is down 1% to $7.88. Investors have been selling this energy infrastructure company’s shares after it announced a non-cash impairment of approximately $145 million to the Moomba Sydney Ethane Pipeline (MSEP). The expected impairment would result in a full write down of the current book value of the MSEP. Management notes that the impairment is non-cash, represents approximately 1% of APA’s market capitalisation, and has no impact on liquidity. Furthermore, there is no change to its FY 2024 distribution or underlying EBITDA guidance.

Chalice Mining Ltd (ASX: CHN)

The Chalice Mining share price is down 11% to $1.34. This is quite a turnaround for the mineral exploration company’s shares. They were up as much as 8% this morning before sinking deep into the red. Investors were buying its shares after it announced a non-binding memorandum of understanding (MOU) with Mitsubishi Corporation. This MOU will see two parties work together with the intention of forming a potential strategic partnership to develop the 100%-owned Gonneville PGE-Nickel-Copper-Cobalt Project in Western Australia. However, given how MOUs are non-binding, investors don’t appear to see much value in the announcement at this stage.

Guzman Y Gomez Ltd (ASX: GYG)

The Guzman Y Gomez share price is down 1% to $25.25. Investors continue to sell down this quick service restaurant operator’s shares due to concerns over its sky-high valuation. Not even a bullish broker note out of Morgans has been enough to stop its shares from falling today. Morgans has initiated coverage on the company with an add rating and $30.00 price target.

Monadelphous Group Ltd (ASX: MND)

The Monadelphous share price is down 3% to $12.69. This appears to have been driven by a broker note out of Bell Potter this morning. According to the note, the broker has downgraded this mining services company’s shares to a hold rating (from buy) with a trimmed price target of $14.00 (from $15.40). Its analysts said: “We have adopted a conservative short-to-medium term outlook for EC division activity, reflecting a quietening major project development pipeline, with limited visibility on near-term contract awards.”

The post Why APA Group, Chalice Mining, Guzman Y Gomez, and Monadelphous shares are falling appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• ASX 200 stock slips on $145 million impairment
• Down 18% since listing, should you buy Guzman Y Gomez shares now?
• Guess which ASX mining stock is jumping 8% on deal with Mitsubishi
• Why Guzman Y Gomez, MacMahon, Strike Energy, and WiseTech shares are sinking

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) retail shares got a late morning boost today, thanks to some thrifty Aussie shopping habits in May.

This follows the 11:30 a.m. AEST release of the Australian Bureau of Statistics’ (ABS) retail sales data for May.

In the minutes following the report’s release, the benchmark index gained 0.2%, with most ASX 200 retail shares joining the mini rally.

Here’s what we know.

Discounts driving sales growth

According to the ABS, Australian retail turnover rose 0.6% in May. That’s a marked improvement from the 0.1% increase in April and the 0.4% decline in March.

While that result is offering some tailwinds for ASX 200 retail shares today, investor reaction is likely muted as much of the growth was attributed to the big retailers’ sales events during the month.

“Retail turnover was boosted this month by watchful shoppers taking advantage of early end-of-financial year promotions and sales events,” Robert Ewing, ABS head of business statistics, said.

“Retail businesses continue to rely on discounting and sales events to stimulate discretionary spending, following restrained spending in recent months,” Ewing added.

And while it’s good to see growth figures for May, the bigger picture is less rosy.

“Despite the seasonally adjusted rise, underlying spending remains stagnant with retail turnover flat in trend terms. Compared to May 2023, trend is only up 1.5%,” Ewing said.

Digging into the market segments for ASX 200 retail shares, clothing, footwear, and personal accessory retailing had the largest rise (up 1.6%) after falling in March and April.

Household goods retailing increased by 1.1%, while sales at department stores decreased by 0.9%.

“Many retailers started end-of-financial year sales early, offering larger discounts than usual and noted that shoppers remain price-sensitive in response to persistent cost-of-living pressures,” Ewing added.

How are these ASX 200 retail shares tracking?

Drilling down to a few specific ASX 200 retail shares, the Wesfarmers Ltd (ASX: WES) share price jumped 0.3% on the ABS sales data, though it has since given back those gains, currently at $64.12 a share.

Wesfarmers subsidiaries include household names such as Bunnings Warehouse, Kmart Australia, Officeworks, and Priceline.

Shares in furniture and electrical goods retailer Harvey Norman Holdings Ltd (ASX: HVN) gained 0.4% following the ABS release and are currently at $4.22.

And ASX 200 home electronics retail share JB Hi-Fi Ltd (ASX: JBH) gained 0.7% following the sales data. At the time of writing, JB Hi-Fi is managing to hold onto those gains, currently at $61.22 a share.

The post How ASX 200 retail shares just got a boost from ‘watchful shoppers’ appeared first on The Motley Fool Australia.

More reading

• ASX passive income: How to make $1,000 per month
• What is the outlook for ASX 200 dividend shares in FY25?
• Can Wesfarmers shares keep beating the ASX 200 index?
• Which ASX shares to buy if interest rates rise (and which to avoid)
• 3 reasons to buy Wesfarmers shares like there’s no tomorrow

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Harvey Norman and Wesfarmers. The Motley Fool Australia has recommended Jb Hi-Fi. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end its losing streak. At the time of writing, the benchmark index is up 0.3% to 7,738.8 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are pushing higher:

Cettire Ltd (ASX: CTT)

The Cettire share price is up 11% to $1.35. This is despite there being no news out of the online luxury products retailer. However, it is worth noting that its shares have been on fire this week. Investors appears to have been buying stocks that were sold off in the last financial year. Nevertheless, Cettire’s shares remain down by over 55% since this time last year despite this week’s heroics. That weakness was driven by concerns over its business model and a sudden deterioration in its performance because of consumer spending headwinds.

Deterra Royalties Ltd (ASX: DRR)

The Deterra Royalties share price is up 1.5% to $4.08. This appears to have been driven by a broker note out of Goldman Sachs this morning. Its analysts have upgraded the mining royalties company to a buy rating with a $4.70 price target. This implies potential upside of 15% from current levels. The broker feels that a recent selloff has created a buying opportunity for investors.

G8 Education Ltd (ASX: GEM)

The G8 Education share price is up 3% to $1.22. This strong gain also appears to have been by a broker note this morning. According to a note out of Macquarie, its analysts have upgraded the childcare centre operator’s shares to an outperform rating with an improved price target of $1.35. Macquarie believes the company could be performing better than expected thanks to improving occupancy rates and lower wage increases.

Red Hill Minerals Ltd (ASX: RHI)

The Red Hill Minerals share price is up 11% to $7.34. This morning, this mining company announced a very large special dividend. Red Hill Minerals recently received $200 million from Mineral Resources Ltd (ASX: MIN) following the first shipment of ore from the Onslow Iron Project to China Baowu Steel Group. Its board has decided to return proceeds to shareholders through a special fully franked $1.50 per share dividend. Based on its current share price, this represents a 20% dividend yield. Its shares are scheduled to trade ex-dividend next week on 9 July. After which, the payment will be made to eligible shareholders later this month on 19 July.

The post Why Cettire, Deterra Royalties, G8 Education, and Red Hill shares are pushing higher appeared first on The Motley Fool Australia.

More reading

• This ASX stock just announced a special dividend with a 20% yield
• Goldman Sachs just upgraded this ASX 200 stock to a buy
• 5 potentially cheap ASX shares being bought by insiders
• Why Arcadium Lithium, Baby Bunting, Cettire, and Qualitas shares are racing higher
• Why Cettire, Collins Foods, Liontown, and Northern Star shares are dropping today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Cettire. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.