Category: Stock Market

This isn’t a good day for ASX banking shares, but it’s the National Australia Bank Ltd (ASX: NAB) share price that’s worse for wear on Wednesday.

Shares in the bank tumbled 3.1% to $29.31 while the S&P/ASX 200 Index (ASX: XJO) lost 1.4%.

Other ASX big bank shares were also dragged lower by the sell-off, but they weren’t as badly hit. The Commonwealth Bank of Australia (ASX: CBA) share price lost 2.1%, Westpac Banking Corp (ASX: WBC) share price fell by 2.07% and Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price declined 1.37%.

Why is the NAB share price lagging?

The underperformance of the NAB share price is likely due to a broker downgrade. Macquarie Group Ltd (ASX: MQG) cut its recommendation on NAB to neutral from outperform.

The broker noted that the divergence between ASX banks’ short- and medium-term outlooks is reaching new highs.

The upside is the next six months stem from the benefits of rising interest rates and lagging term-deposit rates.

Rising rates and bank margins

The Reserve Bank of Australia (RBA) jacked up the cash rate by another 50 basis points yesterday to 2.35%.

Every time it does that, it gives the banks an excuse to lift their mortgage rates. But when it comes to lifting term deposit rates, ASX banks tend to be slower to pass on the extra and often do not hand over the full rate increase. This gives their profit margins a boost.

Hard to be optimistic about ASX bank shares

Macquarie explains:

This dynamic creates a challenging backdrop to formulate the investment thesis. On the one hand, we see further upside risk to bank earnings in 1H23, leaving the sector in a relatively good spot given the uncertain outlook for the broader market.

On the other hand, our earnings forecasts remain well below consensus in FY24 and beyond.

The broker believes consensus is overestimating the profit margins for ASX bank shares, including the NAB share price, over the medium term.

It finds it difficult to be bullish on the sector given potential credit-quality concerns. Then there is also their demanding pre-provision valuations and elevated multiples relative to global peers.

When it comes to the NAB share price, Macquarie reckons it is fully valued. In other words, any good news is already priced in.

NAB share price snapshot

Given that the NAB share price has rallied ahead of the other big ASX bank shares, Macquarie’s view is understandable.

Shares in NAB are up 1.6% over the past year. This compares to the 20% plunge in the ANZ and Westpac share prices over the period.

Not even the mighty CBA share price can match NAB as it shed 8.6% in the last 12 months.

Macquarie’s 12-month price target on the NAB share price is $30.25 a share.

The post Why is the NAB share price diving more than the other big 4 ASX banks today? appeared first on The Motley Fool Australia.

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More reading

• Why rising rates are a ‘sugar hit’ for ASX 200 bank shares: Macquarie
• Rates go up, and CBA beefs up its business cred. Scott Phillips on Nine’s Late News
• Down 19% since April, is the ANZ share price in the buy zone?
• NAB shares offer 15% upside and growing dividends: broker
• Experts say these 2 ASX dividend shares are buys

Motley Fool contributor Brendon Lau has positions in Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, Macquarie Group Limited, National Australia Bank Limited, and Westpac Banking Corporation. 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 recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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When it comes to passive investment vehicles on the ASX, there’s no doubt that the star of the listed investment company (LIC) has waned in recent years in favour of the exchange-traded fund (ETF). ETFs have never been more popular on the ASX than in the post-COVID years. In stark contrast, LICs have arguably fallen out of favour.

But there are some LICs that are still commanding respect on the ASX. Argo Investments Limited (ASX: ARG) is arguably one. Helped no doubt by its age and pedigree, Argo remains a popular ASX LIC. After all, it was founded way back in 1946, and was even helmed by the legendary cricketer Sir Donald Bradman for a while.

But for investors these days, little matters aside from performance. So let’s have a look at how Argo measures up against its larger rival – the Australian Foundation Investment Co Ltd (ASX: AFI). We’ll also look at how these two LICs compare to the index ETFs they so ferociously compete against.

What returns have Argo investors enjoyed?

So let’s jump straight into the numbers. So according to Argo itself, the LIC has delivered an average return of 7.7% per annum over the past three years on average, as of 31 July. That figure is based on the LIC’s share price and assumes dividends are reinvested.

Over the past five years, it has delivered an average of 7.1% per annum. This rises to 9.7% over the past ten years.

Let’s now see how that stacks up against AFIC.

How do these stack up against the ASX 200 and AFIC?

So AFIC does not report its three-year data. However, it does tell us that its share price has averaged a return of 11.6% per annum over the past five years. This extends to 12.2% per annum over the past ten years. These figures also assume dividends are reinvested, but also include the value of franking credits, which Argo doesn’t.

Still, it seems that AFIC’s share price has given investors greater overall shareholder returns over both the past five and ten years on average.

Both AFIC and Argo use the S&P/ASX 200 Accumulation Index as a benchmark. Many popular index ETFs on the ASX also track the ASX 200 Index. So let’s see how an investment in an ASX 200 ETF like the iShares Core S&P/ASX 200 ETF (ASX: IOZ) compares to these returns.

Assuming dividend distributions are reinvested, the iShares ASX 200 ETF has delivered an average of 4.28% over the past three years on average. This rises to 7.89% per annum over the past five years, and 9.19% per annum over the past ten.

So while Argo shares may not have outperformed AFIC over the past five and ten years on average, it has managed to eke out a better performance than the ASX 200 benchmark it uses. Perhaps the LIC is not about to give way to the index ETF just yet.

The post How do Argo shares measure up to other LICs like AFIC? appeared first on The Motley Fool Australia.

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More reading

• Are AFIC shares outperforming the ASX 200 this year?
• How has the AFIC ASX share portfolio changed over FY22?
• Argo share price lifts on record 2022 financial year profit results
• Why is the AFIC share price sliding today?
• The CBA share price looks downright expensive

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.

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ASX 200 bank shares have been somewhat of a mixed bag this year, starting off with a bang before receding back to range.

The benchmark and index funds tracking the sector are also down so far in 2022. The VanEck Australian Banks ETF (ASX: MVB) is down 8% this year to date and around 9.5% in the red for the past 12 months.

Despite the volatility, the banking majors in Australia look well positioned to capitalise on a series of macroeconomic and industry-specific tailwinds, analysts say.

Surging rates: good in the short term for ASX 200 banks

With interest rates now front and centre of the economic landscape, the Australian banking majors have seen a shakeup to their earnings outlook.

The increase in policy rates from the Reserve Bank of Australia (RBA) continues to be passed through to consumers at the retail and commercial levels, with interest rates on both home and business mortgages lifting to multi-year highs.

As such, net interest income (NII) obtained by the sector is set to increase, while the net interest margins (NIMs) on NII will also theoretically grow.

This is also seen on the deposit side too, where the recent spike in rates has been likened to a “sugar hit” by Macquarie analysts. It comes at a time when competition in the mortgage market remains at an all-time high.

Maquarie analysts said in a recent note:

In the short term, banks continue to benefit from highly lucrative retail deposit pricing, which will likely provide margin upside in the next six months.

If we are heading into an environment where credit growth is going to be slow for a long period of time, it does have a substantial impact on the earnings outlook and the valuation of banks.

The market is certainly pricing the effect of changing interest rates into ASX 200 bank shares.

All of the majors are down this year to date and have been tracing sideways for a good portion of a month now.

The below chart tracks the progress of: Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corporation (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and Bendigo and Adelaide Bank Ltd (ASX: BEN).

It remains to be seen if Macquarie’s forecast of the short-term impact of rate changes will result in a short-term thrust on the charts.

The post Why rising rates are a ‘sugar hit’ for ASX 200 bank shares: Macquarie appeared first on The Motley Fool Australia.

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More reading

• Rates go up, and CBA beefs up its business cred. Scott Phillips on Nine’s Late News
• Down 19% since April, is the ANZ share price in the buy zone?
• NAB shares offer 15% upside and growing dividends: broker
• Experts say these 2 ASX dividend shares are buys
• Own CBA shares? Here’s the bank’s warning on rapid RBA rate hikes

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 positions in and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Flat was the new up today with the Latin Resources Ltd (ASX: LRS) share price holding its ground for most of the day, despite the sharp market sell-off. That is, until the last two minutes of trade, when Latin Resources shares finally succumbed.

The ASX lithium junior finished down 4.35% at 11 cents at the close of trade after posting encouraging drilling results.

Latin Resources share price yields to the gloom

The news wasn’t enough to shield it from the 1.4% drop in the All Ordinaries (ASX: XAO) on Wednesday. But the Latin Resources share price isn’t alone, given that ASX mining shares are among the biggest losers on the market today.

The wooden spoon goes to the Hastings Technology Metals Ltd (ASX: HAS) share price. It collapsed 18.08% to $4.44. The Chalice Mining Ltd (ASX: CHN) share price isn’t far behind with its 13.04% plunge.

Latest drill results

Fortunately for the Latin Resources share price, management announced it struck more high-grade lithium at its Colina prospect in Brazil.

The miner’s latest drilling results include 26.88m @ 1.40% Li2 O from 94m, 28.80m @ 1.16% Li2 O from 307m and 10.00m @ 1.05% Li2 O from 186m.

Previous work in the area identified a “lithium corridor” that covered a distance of 4km. The Colina prospect is south-east of Latin Resources’ flagship Salinas Lithium project.

On track to the next share price catalyst

Latin Resources’ exploration manager Tony Greenaway said:

Our latest results continue to show excellent high‐grade lithium intersections and continuity of the pegmatites along strike and down dip. We are well on schedule to deliver our maiden JORC resource in December which is an exciting milestone for the company.

I am also pleased to have our regional teams out mapping at Salinas South where we know we have more outcropping pegmatites. Our plan is to work‐up these areas to drill‐ready status, and then in the near term commence drilling to begin testing these new areas.

Powering up the Latin Resources share price

The miner has completed more than one-third of the planned 100 drill holes. The results to date continue to confirm the continuity of grade and thickness of the Colina pegmatites at depth.

The Salinas Lithium Project in the pro‐mining district of Minas Gerais, Brazil. Latin Resources is also developing the Catamarca Lithium Project in Argentina.

Lithium is the flavour of the month for ASX investors due to surging demand for electric vehicles. The mineral is a key ingredient in batteries and some experts believe there won’t be enough supply to meet demand for years to come.

Latin Resources share price snapshot

This explains why the Latin Resources share price has rallied 156% over the past year. In contrast, the All Ordinaries has fallen 11% while the S&P/ASX 300 Metals & Mining (ASX: XMM) dipped 6.8% over the period.

But Latin Resources isn’t the only ASX lithium share that is racing ahead. The Allkem Ltd (ASX: AKE) share price has climbed 45% and the Pilbara Minerals Ltd (ASX: PLS) share price advanced 84% in the last 12 months.

The post Latin Resources share price follows ASX sell-off amid ‘excellent high‐grade lithium’ news appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX lithium share is rocketing 20% on positive drill results
• 3 ASX mining shares rocketing higher today on new finds
• Why is the Latin Resources share price leaping 30% today?

Motley Fool contributor Brendon Lau has positions in Allkem Limited, and Pilbara Minerals Ltd. 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.

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The Arafura Resources Limited (ASX: ARU) share price kept its head above water on Wednesday.

At the end of the day, shares in the rare earth minerals exploration company settled at 34 cents apiece, bang on the same price they closed at yesterday. That may not sound like much to cheer about, but in the context of the broader market, it is.

The S&P/ASX 200 Index (ASX: XJO) was tenderised today, with the benchmark index wiping off 1.43% from yesterday. Notably, the materials sector shouldered a fair chunk of the selling.

Several big ASX mining shares, such as BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG), experienced falls in excess of 2.3%. So, why is it that the Arafura Resources share price stood tall?

Joining an index comes with its perks

Firstly, there were details regarding the issuing of performance rights to leadership today. However, there was no material information from the small-cap exploration company. In light of this, we need to search further to find what might have supported Arafura while other shares fell.

On Monday, The Motley Fool Australia reported on Arafura’s inclusion in the S&P/ASX 300 Index (ASX: XKO) as per the September quarterly rebalance. During that session, the hopeful neodymium and praseodymium producer rallied 17%.

There is a chance that Arafura Resources enjoyed continued buying on Wednesday as index funds sought to replicate the proposed rebalanced benchmark.

At the close, the company had witnessed more than 11.8 million shares swap hands. This far surpasses the average value of around 8.1 million.

What else could be fuelling the Arafura share price?

Another factor that might have helped Arafura shares fend off selling pressure is the elevated interest in rare earth shares.

Toward the end of August, Andrew ‘Twiggy’ Forrest’s Wyloo Metals revealed its intentions to invest in Hastings Technology Metals Ltd (ASX: HAS). The fellow rare earth explorer would be using some of the funds received by Wyloo to take a stake in Canadian-listed magnet maker Neo Performance Materials.

Interest in rare earth mining shares has been elevated in recent times as China ties have loosened. As a result, countries have been seeking ways to reduce their reliance on the People’s Republic for the key material.

The post Arafura defies sell-off in ASX mining shares to stay buoyant. Is this why? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX mining shares that rocketed more than 15% on Monday
• These 6 ASX mining shares are now in the ASX 300
• Why is the Arafura share price surging 10% on Monday?
• Why is the Arafura share price leaping 5% today?
• 3 ASX mining shares primed for an ‘exponential’ energy transition: expert

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.

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The S&P/ASX 200 Index (ASX: XJO) took its lead from Wall Street on Wednesday, plummeting to a seven-week low. The index closed 1.42% lower at 6,729.30 points.

It came after the S&P 500 Index (SP: .INX) and Dow Jones Industrial Average Index (DJX: .DJI) fell 0.4% and 0.5% respectively overnight. Meanwhile, the Nasdaq Composite Index (NASDAQ: .IXIC) slipped 0.7%.

Leading the ASX 200’s downfall was the S&P/ASX 200 Energy Index (ASX: XEJ), falling 2.9%. It followed a mixed night for oil prices.

The Brent crude oil price fell 3% to US$92.83 a barrel overnight while the US Nymex crude oil price  lifted 0.1% to US$86.88 a barrel.

The S&P/ASX 200 Materials Index (ASX: XMJ) also plunged 2% after iron ore futures slid 0.9% to US$97.61 a tonne and gold futures lifted 0.6% to US$1,712.90 an ounce.

Only two sectors recorded a gain on Wednesday. The biggest lift was posted by the S&P/ASX 200 Information Technology Index (ASX: XIJ). It rose 0.3% despite the tech-heavy Nasdaq Composite’s Tuesday losses.

But which share outperformed all others on Wednesday? Let’s take a look.

Top 10 ASX 200 shares countdown

Today’s top performing ASX 200 share was ResMed Inc (ASX: RMD). Find out more about the medical device and software developer and what it’s been up to lately here.

Today’s biggest gains were made by these ASX shares:

ASX-listed company	Share price	Price change
ResMed Inc (ASX: RMD)	$33.51	4.23%
Virgin Money UK CDI (ASX: VUK)	$2.53	3.27%
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)	$17.41	3.02%
Elders Ltd (ASX: ELD)	$11.80	2.79%
Link Administration Holdings Ltd (ASX: LNK)	$4.31	2.62%
Graincorp Ltd (ASX: GNC)	$8.30	2.47%
Janus Henderson Group CDI (ASX: JHG)	$34.35	2.32%
Core Lithium Ltd (ASX: CXO)	$1.525	2.01%
Computershare Limited (ASX: CPU)	$24.57	1.95%
Megaport Ltd (ASX: MP1)	$7.40	1.93%

Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Morgans names 3 more of the best ASX shares to buy in September
• Analysts say these exciting ASX growth shares have at least 20% upside
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why is the Core Lithium share price surging 8% on Tuesday?

Motley Fool contributor Brooke Cooper 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 Link Administration Holdings Ltd, MEGAPORT FPO, and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. The Motley Fool Australia has recommended Elders Limited and MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s a bloodbath among S&P/ASX 200 Index (ASX: XJO) mining shares today, with many of the market’s biggest materials stocks tumbling.

Stock in resources giant BHP Group Ltd (ASX: BHP) is plummeting 2.1% at the time of writing.

Its heavyweight peers, Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG), are also suffering. Their share prices have fallen 1.45% and 2.2%, respectively.

So, what’s weighing on most of the market’s favourite ASX 200 mining shares today? Let’s take a look.

ASX 200 mining shares tumble on Wednesday

The ASX 200 is suffering on Wednesday, having fallen 1.4% right now. And the S&P/ASX 200 Materials Index (ASX: XMJ) is among its worst performing sectors.

The materials sector is currently down 1.69%, with only a few stocks defying its sell-off.

Lithium stocks Lake Resources NL (ASX: LKE) and Core Lithium Ltd (ASX: CXO) are currently in the green, lifting 1.66 and 1.67% respectively.

The share prices of Lynas Rare Earths Ltd (ASX: LYC), Incitec Pivot Ltd (ASX: IPL), and Orora Ltd (ASX: ORA) are also gaining, having risen 0.89%, 0.68%, and 0.31% respectively.

But, aside from a select few, most ASX 200 mining shares are tumbling lower.

Their suffering follows a rough night for commodity prices. While certain base metals, including copper, lead, and nickel, posted slight gains overnight, iron ore slumped.

Iron ore futures fell 0.9% to US$97.61 a tonne amid continuing reports of COVID-induced lockdowns and restrictions in China. Gold futures, however, lifted 0.6% to US$1,712.90 per ounce.

Today’s worst performing ASX 200 mining share is Chalice Mining Ltd (ASX: CHN). Its share price has dumped 12.13% at the time of writing.

The post Why are ASX 200 mining shares getting blasted on Wednesday? appeared first on The Motley Fool Australia.

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• The Fortescue share price has cratered 13% in a week. What’s going on?
• Could this be a blow to the fortunes of Fortescue Future Industries?
• Own BHP shares? Here’s how much the ASX 200 giant added to the Aussie economy in FY22
• What are brokers saying about the BHP share price?
• Rio Tinto share price lower despite Turquoise Hill agreement

Motley Fool contributor Brooke Cooper 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.

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The Ethereum (CRYPTO: ETH) price is taking a tumble.

The world’s number two crypto by market cap is currently trading for US$1,508 (AU$2,246), down 8.2% since this time yesterday.

That puts Ethereum down 60% year to date and leaves the token with a market valuation of US$184 billion, according to data from CoinMarketCap.

Why is the Ethereum price falling?

It’s far from just the Ethereum price that’s falling.

In fact, only two of the top 100 cryptos by market cap are in the green over the past 24 hours.

This again mirrors the action we’re seeing across other risk assets.

The tech-heavy NASDAQ, a good proxy for investor risk appetite, fell for a seventh consecutive trading day yesterday (overnight Aussie time), closing down 0.7%. And futures indicate the index is in for another decline tomorrow.

The NASDAQ is now down 27.1% in 2022, a bit less than half the Ethereum price loss.

The reason, as you’re likely aware, remains investor concerns about high inflation, fast-rising interest rates, and possible recessions looming in the United States and European Union. None of which look to benefit cryptos or other risk assets in the short-term.

What about the Merge?

The Ethereum price has been outperforming the likes of Bitcoin (CRYPTO: BTC) over the past few months as investors eye the upcoming Merge, slated for 15 September.

The first stage of the process went live yesterday.

If you’re not familiar, the Merge will see the Ethereum blockchain transition from proof of work (POW) to proof of stake (POS). Under POS, a much smaller number of validators will stake some of their Ether holdings to verify transactions and secure the blockchain.

Supporters say it will be faster, cheaper, and use far less energy than the current POW protocol.

Many crypto investors are also hoping it will offer some sustained tailwinds for the Ethereum price.

Though that remains to be seen.

Commenting on the Merge, eToro’s market analyst and crypto expert Simon Peters said:

With the Merge just over a week away, many are now starting to speculate as to how the blockchain will operate – and how successfully – moving forward. However, some analysts now expect the switch to proof of stake to lower its energy consumption, potentially by 99%. For context, this would equate to the electricity consumption of Portugal.

The post The Ethereum price just dropped 8% despite Merge progression appeared first on The Motley Fool Australia.

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More reading

• The Bitcoin price just fell below US$19,000 What’s happening?
• 3 reasons to invest in Ethereum right now
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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 Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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When investors think of Wesfarmers Ltd (ASX: WES) shares, they may think of businesses like Bunnings, Kmart, and Officeworks.

But, there are plenty of other businesses within the company including Target, Catch, Priceline, and a number of other businesses.

And investors shouldn’t discount those other business segments because they’re actually already making significant profits for the S&P/ASX 200 Index (ASX: XJO) share.

Strong growth in FY22 from unsung businesses

The 2022 financial year was such a strong showing that one of the non-retail segments generated more profit than Kmart Group.

In FY22, Bunnings generated $2.2 billion of earnings before tax (EBT) and $945 million in the second half of FY22.

Kmart and Target saw $505 million of EBT (down 31.7%) in FY22 and $283 million (up 19.4%) in the second half.

Officeworks reported FY22 EBT of $181 million (down 14.6%) and $99 million in the second half (down 11.6%).

Now let’s look at some of the unsung businesses.

Wesfarmers chemicals, energy, and fertilisers (WesCEF) saw “record earnings”, with a strong operational performance and higher global commodity prices. Full-year EBT jumped 40.6% to $540 million while second-half EBT climbed 43.8% to $322 million. As this shows, it was the second biggest profit generator for Wesfarmers, only behind Bunnings. The segment is certainly growing in importance for Wesfarmers shares.

Meanwhile, the industrial and safety division saw a “continued improvement in performance and profitability”. There was sales growth and additional operating efficiencies, as well as increased demand from Coregas healthcare and industrial customers. FY22 EBT grew 31.4% to $92 million while second-half earnings soared 54.5% to $51 million.

Is there more growth to come?

It has been a strong period for WesCEF, benefiting from a favourable ammonia price and continued strong demand from mining customers. Wesfarmers is currently working on its lithium project called Mt Holland, with WesCEF playing an important part in the development. Managing director Rob Scott said:

We see WesCEF as an important driver of long term growth and the team continued to progress capacity expansion opportunities this year. Good progress also continued on the development of the Mount Holland lithium project, with the village and aerodrome completed and pre-strip mining and the construction of the concentrator and refinery advancing. The WesCEF lithium team is progressing discussions with key customers which continue to be supported by very strong market fundamentals.

When Wesfarmers announced its FY22 result, the company also said that the chemicals business is expected to continue benefiting from strong global commodity prices, with strong demand from the WA mining sector expected to continue. It will continue to progress engineering studies evaluating production capacity expansions.

In the fertilisers business, good 2022 seasonal conditions are reflected in “positive grower sentiment”, though high fertiliser input prices may “moderate application rates in 2023”.

Regarding its lithium exposure, Wesfarmers said that construction activity continues, while lithium market fundamentals remain favourable, underpinned by the growing demand for battery electric vehicles. Meanwhile, negotiations to supply lithium hydroxide to key counterparties are underway.

The outlook for the industrial and safety businesses are focused on “driving improvements in performance and profitability, strengthening the customer value proposition and executing new growth opportunities”, the company says.

It seems like Wesfarmers is building a strong earnings base away from retail, which is useful as Australia goes through an uncertain environment for retailers.

Wesfarmers share price snapshot

Over the last six months, Wesfarmers shares are down around 5%.

The post Could these ‘little’ businesses be a secret weapon for Wesfarmers shares? appeared first on The Motley Fool Australia.

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More reading

• Are ‘cracks starting to show’ for ASX 200 retail shares?
• Should all ASX investors be buying defensive shares right now?
• Down 20% so far this year, is the Wesfarmers share price a screaming bargain?
• How I’d invest $50,000 in ASX dividend shares for retirement, if I had to start from scratch
• Is the Wesfarmers share price a buy following the company’s latest results?

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 Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a rather horrible day for the S&P/ASX 200 Index (ASX: XJO) so far this Wednesday. At the time of writing, the ASX 200 is awash with red ink, banking a nasty loss of 1.45% at just over 6,720 points.

But let’s not dwell to long on that. So instead, it’s time to check out the ASX shares currently at the top of the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Wednesday

Telstra Corporation Ltd (ASX: TLS)

Our first ASX 200 share today is the blue-chip telco Telstra. So far this Wednesday, a hefty 21.34 million Telstra shares have been connected to a new owner. There hasn’t been too much in the way of news or announcements out of Telstra today.

So we can probably pin this elevated volume on the volatility we have seen in the telco’s shares during the current session. At present, Telstra is flat at yesterday’s closing price of $3.89 a share, belying its previous hive of activity. But the company initially opened in the green this morning before falling all the way down to $3.84.

Lake Resources NL (ASX: LKE)

ASX 200 lithium share Lake Resources is next up this Wednesday. So far today, a sizeable 22.95 million Lake shares have been bought and sold. This could be a byproduct of the news that the company put out this morning.

As my Fool colleague Brooke dug into this morning, Lake Resources has named a new CEO and managing director in David Dickson. Investors seem to approve of the new leader, with the Lake Resources share price up a robust 2.07% so far today to $1.23 a share. This looks to be the cause of the high volumes we see.

Pilbara Minerals Ltd (ASX: PLS)

Last but certainly not least, in terms of trading volume, we have the ASX 200 lithium producer Pilbara Minerals. Pilbara has seen a whopping 24.8 million of its shares trade hands on the markets as it currently stands.

This looks like a consequence of the new record-high Pilbara printed this morning. As we covered earlier today, Pilbara shares hit a new record high of $4.03 around lunchtime. The company has since cooled and is now at $3.94 a share, down 0.51% for the day so far. But there’s little doubt the elevated trading volumes we are witnessing can be pinned on this new high.

The post Here are the 3 most heavily traded ASX 200 shares on Wednesday appeared first on The Motley Fool Australia.

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More reading

• 2 ASX All Ordinaries shares that defied today’s sell-off to crack new highs
• Why is the Lake Resources share price outperforming on Wednesday?
• Worst month of the year? The Pilbara Minerals share price has already hit 2 all-time highs in September
• Brokers name 2 ASX 200 shares to buy for a retirement portfolio
• Why did the Sayona Mining share price shoot 6% higher today?

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. 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 Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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