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On Thursday, the S&P/ASX 200 Index (ASX: XJO) tumbled deep into the red after the US Federal Reserve increased rates by 0.75%. The benchmark index fell 1.85% to 6,857.9 points.

Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to end the week in the red after a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 10 points or 0.1% lower this morning. In late trade in the United States, the Dow Jones is up slightly, the S&P 500 has risen fallen 0.5%, and the Nasdaq has dropped 1.15%.

Oil prices tumble

Energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a poor finish to the week after oil prices tumbled overnight. According to Bloomberg, the WTI crude oil price is down 2% to US$88.23 a barrel and the Brent crude oil price is down 1.5% to US$94.70 a barrel. Global recession concerns are weighing on prices.

CSL R&D event

The CSL Limited (ASX: CSL) share price will be on watch today when the biotherapeutics giant holds its annual research and development (R&D) event. At the event, CSL will be providing investors with a comprehensive review of its clinical development programs. It may also provide the market with updates on current commercial operations.

Woolworths named as a buy

The Woolworths Group Ltd (ASX: WOW) share price remains great value following its first quarter update. That’s the view of analysts at Goldman Sachs, which have reiterated their conviction buy rating with a trimmed price target of $41.70. It said: “Despite a noisy and softer 1Q23, we remain confident that WOW is the superior operator within AU supermarkets.”

Gold price falls

Gold miners such as Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a difficult end to the week after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.95% to US$1,634.60 an ounce. The precious metal came under pressure following hawkish commentary from the US Federal Reserve.

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

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More reading

• Why did the South32 share price melt more than the market today?
• Here are the top 10 ASX 200 shares today
• Why is the Rio Tinto share price faring worse than the ASX 200 today?
• How is the Qantas share price avoiding today’s carnage?
• Why Bravura, Domino’s, Lendlease, and Woolworths 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 positions in and has recommended CSL Ltd. 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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Are you interested in adding some ASX growth shares to your portfolio in November? If you are, you may want to look at the two listed below that have recently been named as buys.

Here’s what you need to know about them:

Allkem Ltd (ASX: AKE)

The first ASX growth share that could be a buy this month is Allkem.

Allkem is the lithium giant that owns a collection of quality projects across several product types. These operations include Olaroz, Mt Cattlin, and the Sal de Vida brine project.

Lithium certainly is a great commodity to be working with right now. With lithium prices at sky high levels and tipped to stay that way in the near term, Allkem appears well-positioned to deliver bumper earnings in the coming years. Particularly given management’s plan to grow its production 3x by 2026 and command a 10% share of global lithium production over the long term.

Macquarie is very positive on the company’s outlook and has an outperform rating and $21.00 price target on its shares.

Temple & Webster Group Ltd (ASX: TPW)

Another ASX growth share that has been named as a buy is Temple & Webster.

It is Australia’s leading pure-play online retailer of furniture and homewares.

Temple & Webster has been growing at a strong rate for a number of years thanks to the shift to online shopping. And with the shift in this category still in its early stages compared to other categories, the company appears well-placed to continue benefiting and growing strongly for some time to come.

Goldman Sachs expects that to be the case. In addition, the broker highlights that the category favours scale players, requires a specialised approach to e-commerce, and has higher barriers to entry. This all bodes well for Temple & Webster.

Goldman has a buy rating and $7.55 price target on the company’s shares.

The post 2 excellent ASX growth shares that analysts say are buys appeared first on The Motley Fool Australia.

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More reading

• Which ASX 200 mining shares managed to dig up gains in October?
• 3 ASX All Ords shares starting the week on fire
• Here are the 10 most shorted ASX shares
• Are non-producing ASX lithium companies now way over-priced?
• How I’d aim to find under-the-radar ASX shares that are pandemic-era bargains

Motley Fool contributor James Mickleboro has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. 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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This one ASX mining share has been up and down like a yo-yo today.

The WA1 Resources Ltd (ASX: WA1) share price finished 24.62% in the red after soaring higher in earlier trade.

This morning, WA1 Resources shares exploded out the blocks, soaring 46.73% from $1.99 to $2.92. For comparison, the S&P/ASX 200 Materials Index (ASX: XMJ) fell 2.96% today.

Let’s take a look at what went on with this ASX mining share today.

ASX mining share resumes trading

WA1 Resources shares soared a staggering 1,321% between market close on 21 October and 1 November.

On Tuesday, the company’s shares were placed on ice after exploding 60% earlier in the day. WA1 entered a trading halt voluntarily after receiving a price query from the ASX.

Today, WA1 Resources resumed trading after releasing its response to the ASX volume query after the market closed on Wednesday. The company confirmed it is in compliance with the listing rules.

In its response, the company pointed to “substantial recent media coverage” of the company’s discovery at the West Arunta project in Western Australia.

As announced by the company on 26 October, WA1 Resources has discovered a mineralised carbonatite system at the mine.

WA1 told the ASX assay results for six other drill holes at the project are due to be received next week. These results will be released following a comprehensive review by the company.

On 27 October, WA1 Resources released a corporate overview of the company, including the maiden drill program. The company’s mission is to “discover a tier one deposit in WA’s unexplored regions and create value for all stakeholders”.

WA1 Resources listed on the ASX on 8 February this year.

WA1 Resources share price snapshot

The WA1 Resources share price has soared 650% in the year to date. In the past month, the company’s shares have skyrocketed by 868%.

For perspective, the ASX 200 Materials Index has gained nearly 4% in the past year.

This ASX mining share has a market capitalisation of about $43.5 million based on today’s closing price.

The post Up 47% and down 25% in one day, what’s with this ASX mining share? appeared first on The Motley Fool Australia.

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More reading

• Why was this ASX mining share placed on ice after exploding 60% today? 
• 3 ASX mining shares going gangbusters on Thursday

Motley Fool contributor Monica O’Shea 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 Piedmont Lithium Inc (ASX: PLL) share price closed 4.59% lower today amid a broad sell-off across Australian and US markets.

Shares of the integrated lithium business closed trading for 93 cents each.

The materials sector was the worst performer on Thursday, with the S&P/ASX 200 Materials Index (ASX: XMJ) losing 2.96%.

Other ASX lithium shares were also not spared from the downturn. Here’s a quick look at how they performed:

• Pilbara Minerals Ltd (ASX: PLS) down 1.37%
• Mineral Resources Limited (ASX: MIN) down 3.12%
• Allkem Ltd (ASX: AKE) down 2.49%

The broader Australian market took a hit too, with the S&P/ASX 200 Index (ASX: XJO) losing 1.84%.

Of course, most of the damage here at home is also reflected in the slide of US markets overnight.

The Nasdaq Composite (NASDAQ: .IXIC) lost 3.36% and made a new five-day low. The S&P 500 Index (SP: .INX) lost a significant amount too, down 2.50%.

Markets are reeling amid comments made by Federal Reserve chairman Jerome Powell overnight. Let’s cover the highlights.

What did Powell say?

My Foolish colleague Bernd notes that while the 0.75% rate hike may have been expected and largely priced in, nobody could have anticipated that Powell would make such hawkish comments in a press conference after the Fed meeting took place.

He said inflation remains high and he has the expectation that interest rates will continue to rise to get it under control.

Powell said:

The level of rates that we estimated in September, the incoming data suggests that’s actually going to be higher. There is no sense that inflation is coming down… We’re exactly where we were a year ago.

The bigger picture, though, is that Powell also thinks the Fed’s chances of preventing a recession while getting inflation under control are becoming increasingly less likely.

When asked if he believes the chance of the Fed executing a ‘soft landing’ has been affected, Powell replied: “Has it narrowed? Yes. Is it still possible? Yes.”

Powell added:

The inflation picture has become more challenging over the course of this year, without a question. That narrows the path to a soft landing.

Piedmont Lithium share price snapshot

The Piedmont Lithium share price is now down 6% in the past two days after also falling 1.5% on Wednesday.

However, its shares are up 27% year to date. That’s a steep gain over the S&P/ASX 200 Index, which is down around 8% over the same period.

The company’s market capitalisation is around $1.55 billion.

The post Why did the Piedmont Lithium share price plunge on Thursday? appeared first on The Motley Fool Australia.

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More reading

• These were the best ASX lithium shares to buy in October
• 4 ASX lithium shares surging more than 10% today
• Guess which ASX lithium company is the biggest holder of Sayona Mining shares?
• Why Challenger, Novonix, Piedmont Lithium, and Woodside shares are racing higher
• 3 ASX lithium stocks leaping higher on big news

Motley Fool contributor Matthew Farley 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 South32 Ltd (ASX: S32) share price finished in the red alongside other ASX mining shares today after the United States interest rate decision caused the broader market to panic.

The South32 share price dived 3.16% to close Thursday’s session at $3.68.

The S&P/ASX 200 Materials (ASX: XMJ) was the worst-performing sector index today, down 2.96%.

The S&P/ASX 200 Index (ASX: XJO) fell 1.84%.

Let’s look at what happened.

South32 share price feels the heat

The fourth consecutive 0.75% increase in US interest rates isn’t great news for ASX mining shares.

Nor is the Fed Chair’s comment that “incoming data since our last meeting suggest that the ultimate level of interest rates will be higher than previously expected”. Mic drop.

US rates are now at their highest level since the global financial crisis in 2008.

What the US does in its economy tends to have a major flow-on effect on the rest of the world. That includes international commodity markets, many of which trade in US dollars.

The main metals that South32 mines are aluminium, manganese, nickel, and coal.

The first three are holding up okay but the price of coal has slipped 6.6% over the past week and 9.5% over the past month, according to Trading Economics data.

That might not sound dramatic but the market has been in a lather over ASX coal shares for some time. The coal price is up almost 130% over the past year. It hit a historical peak of above US$430 per tonne in September. So, investors have been hyped.

But the coal price has since fallen. Maybe this downturn might have investors taking profits now?

We note that South32 is one of the highest-traded shares on the ASX 200 today.

South32 share price falling since May

The South32 share price is down 9.6% in the year to date.

As my Fool colleague Tristan reported this week, South32 shares are down 28% in five months.

The post Why did the South32 share price melt more than the market today? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why is the Rio Tinto share price faring worse than the ASX 200 today?
• How is the Qantas share price avoiding today’s carnage?
• Here are the 3 most traded ASX 200 shares on Thursday
• Why is the BetaShares Nasdaq 100 ETF taking a thrashing today?

Motley Fool contributor Bronwyn Allen 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) broke its winning streak in a dramatic way on Thursday. The index closed 1.84% lower at 6,857.9 points.

Its suffering came after the United States Federal Reserve upped interest rates by 0.75% to between 3.75% and 4% in an effort to tackle rampant inflation overnight. Also likely weighing on markets was chair Jerome Powell’s warning that future hikes are likely.  

Wall Street plummeted on the back of the news. The Dow Jones Industrial Average Index (DJX: .DJI) fell 1.6%, the S&P 500 Index (SP: .INX) tumbled 2.5%, and the Nasdaq Composite (NASDAQ: .IXIC) plunged 3.4%.

Back home, the S&P/ASX 200 Materials Index (ASX: XMJ) put out today’s worst performance, falling 3%.

Meanwhile, the S&P/ASX 200 Energy Index (ASX: XEJ) dumped 1.2% despite rising oil prices.

The Brent crude oil price lifted 1.6% to US$96.16 a barrel overnight, while the US Nymex crude oil price gained 1.8% to US$90 a barrel.

But not all was dire. The S&P/ASX 200 Communications Index (ASX: XTJ) was the only sector to close in the green, having gained 0.1%.

So, with all that in mind, which ASX 200 share took out today’s top spot? Keep reading to find out.

Top 10 ASX 200 shares countdown

The biggest gain on the ASX 200 today was posted by Perpetual Limited (ASX: PPT). Its share price rocketed 7% after the company rejected a $30 per share takeover bid, saying the offer undervalued it.

Today’s biggest gains were made by these shares:

ASX-listed company	Share price	Price change
Perpetual Limited (ASX: PPT)	$28.82	7.14%
New Hope Corporation Limited (ASX: NHC)	$6.09	5.91%
Downer EDI Ltd (ASX: DOW)	$4.81	5.25%
A2 Milk Company Ltd (ASX: A2M)	$5.49	4.17%
Telstra Corporation Ltd (ASX:TLS)	$3.94	1.29%
Computershare Limited (ASX: CPU)	$25.94	1.25%
Nanosonics Ltd (ASX: NAN)	$4.21	1.2%
Boral Limited (ASX: BLD)	$2.85	1.06%
Cromwell Property Group (ASX: CMW)	$0.695	0.72%
Medibank Private Ltd (ASX: MPL)	$2.90	0.69%

Our top 10 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

• Why is the Rio Tinto share price faring worse than the ASX 200 today?
• New Hope share price jumps on $300m buyback plans
• How is the Qantas share price avoiding today’s carnage?
• Here are the 3 most traded ASX 200 shares on Thursday
• Why A2 Milk, New Hope, Perpetual, and Talga shares are charging higher

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 Nanosonics Limited. The Motley Fool Australia has positions in and has recommended Nanosonics Limited and Telstra Corporation Limited. The Motley Fool Australia has recommended A2 Milk. 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 Materials Index (ASX: XMJ) fell 2.96% today, making it the worst-performing sector index. But two ASX lithium shares bucked the trend.

The S&P/ASX 200 Index (ASX: XJO) also had a tough day, down 1.84%

However, Galan Lithium Ltd (ASX: GLN) and Neometals Ltd (ASX: NMT) shares both finished in the green.

So why did these ASX lithium shares fare so well today?

Galan Lithium

Galan Lithium shares jumped 1.9% higher today to $1.61. Investors appeared to be maintaining momentum in the share following a positive update yesterday.

Galan has applied to scale up the piloting plant stage of its HMW project in Argentina. Galan is aiming to construct a 4 kilo-tonnes per annum lithium carbonate equivalent plant in the second half of 2023.

Commenting on the news, Galan managing director JP Vargas de la Vega said:

The scaling to semi-commercial pilot plant testing delivers significant ancillary and de-risking benefits, including the construction of larger ponds which are similar to those planned to be utilised during HMW’s full-scale production stage

The Galan share price climbed 1.94% on Wednesday following the update. This ASX lithium share is now up more than 30% in the past month.

Neometals

Neometals shares climbed 3.13% today to $1.16.

The ASX lithium share’s battery materials business units include lithium-ion battery recycling, vanadium recovery, and lithium chemicals.

Neometals has developed a process to produce lithium hydroxide from lithium chloride using electrolysis through a 70% owned subsidiary.

However, today’s news relates to the Barrambie titanium and vanadium project in Western Australia. Neometals informed the market of a successful commercial-scale smelting trial. Barrambie mineral concentrate blended with commercial ilmenites produced +90% titanium dioxide chloride slag.

Commenting on the news, Neometals managing director Chris Reed said:

The ability to produce chloride-grade titanium slag from simple gravity concentrate from Barrambie is the key technical milestone for the next stage of project development.

Despite today’s gains, the Neometals share price is down more than 3% in the past month.

The post 2 ASX lithium shares that defied today’s sell-off to climb higher appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX All Ords lithium share is getting a boost today despite burning through nearly $10m
• 4 ASX lithium shares surging more than 10% today
• Galan Lithium share price rockets 28% on ‘game changing’ update
• Guess which ASX lithium share is on ice with a ‘significant resource update’ incoming

Motley Fool contributor Monica O’Shea 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 Wesfarmers Ltd (ASX: WES) share price has come under pressure on Thursday with the rest of the market.

In afternoon trade, the conglomerate’s shares are down 3.5% to $45.15.

This means the Wesfarmers share price is now down almost 25% since the start of the year.

Is the Wesfarmers share price weakness a buying opportunity?

While the weakness in the Wesfarmers share price this year has been disappointing for shareholders, it could be a buying opportunity for the rest of us.

That’s the view of a couple of brokers, which see plenty of value in its shares at the current level.

For example, a note out of UBS last week reveals that its analysts have a buy rating and $55.00 price target on its shares. This implies potential upside of 22% for investors over the next 12 months.

The broker notes that trading conditions are very positive for Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) business at present thanks to strong customer demand and favourable commodity prices.

Who else is bullish?

Elsewhere, analysts at Morgans have an add rating and slightly higher price target of $55.60 on its shares. This suggests potential upside of 23% for investors between now and this time next year for the Wesfarmers share price.

It is also worth noting that Morgans has the company on its best ideas list. These are the shares the broker thinks offer the highest risk-adjusted returns over a 12-month timeframe. They are also supported by a higher-than-average level of confidence. The broker commented:

WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Kmart and Officeworks. The company is run by a highly regarded management team and the balance sheet is healthy. While COVID-related staff shortages are proving to be a challenge, the core Bunnings division (>60% of group EBIT) remains a solid performer as consumers continue to invest in their homes. We see the pullback in the share price as a good entry point for longer term investors.

The post Should you buy the dip in the Wesfarmers share price? appeared first on The Motley Fool Australia.

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More reading

• Up 6% in October, is this factor why the Wesfarmers share price performed?
• Amazon stock just tanked. Could this be a canary in the coal mine for ASX 200 retail shares?
• Why I think the Wesfarmers share price is a buy after this week’s AGM
• How I’d build a portfolio by investing in top ASX shares now
• 22 high-yield ASX dividend shares Wilsons is targeting

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 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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The Rio Tinto Limited (ASX: RIO) share price is tumbling as the broader market reacts to the United States Federal Reserve raising interest rates by another 0.75%.

Rio Tinto shares are down 2.46% to $90.35 at the time of writing, while the S&P/ASX 200 Index (ASX: XJO) is down 1.73%.

The S&P/ASX 200 Materials (ASX: XMJ) is the worst-performing sector index today, down 2.8%.

Rio shares aren’t alone in the turmoil. Fellow big players among the ASX iron ore shares are also down.

The Fortescue Metals Group Limited (ASX: FMG) share price is 2.7% in the red at $15.30. The BHP Group Ltd (ASX: BHP) share price is down 3% to $38.05.

Let’s take a look at what’s happening.

ASX resources shares hit by triple whammy

So, there are three elements likely weighing on ASX resources stocks like Rio Tinto today.

First of all, the whole market isn’t liking the fourth consecutive 0.75% increase in US interest rates.

US rates are now at their highest level since the global financial crisis in 2008.

The ASX 200 also isn’t reacting well to US Fed chair Jerome Powell saying interest rates may go higher than expected.

In his statement, Powell said: “… incoming data since our last meeting suggest that the ultimate level of interest rates will be higher than previously expected”.

The second hit to resources stocks relates to the continuing fall in the iron ore price.

It went below US$80 per tonne this week for the first time since April 2020. The iron ore price has fallen by almost 17% in the past month alone, according to Trading Economics data.

The commodity’s value is dropping on fears of a global recession and lowering demand from China.

The third hit comes in the form of downgraded earnings estimates for iron ore miners from broker Citi.

According to reporting in The Australian, Citi has reduced its earnings estimate for iron ore miners. This is in response to Citi’s global commodities team cutting its forecasts for the iron ore price.

Previously, the Citi commodities team had been forecasting an average price of US$110 per tonne in 2023. It has now reduced its outlook to an average of US$95 per tonne.

The broker also tips the spot price to fall to US$70 per tonne in the December quarter.

Citi’s Paul McTaggart said:

The recent heavy sell-off in iron ore has seen prices fall to their lowest levels since 2020, as sentiment deteriorated post China’s 20th Communist Party Congress.

We’ve become more cautious on iron ore over the next six months reflecting the disappointing policy environment post the Congress.

In our base case, we expect some existing policy support could take effect under the new China leadership with the expectations that there would be better coordination within different government levels to improve overall executions. However, we are likely only going to see this happens after the March quarter.

… mining share prices have retreated as iron ore has moved lower. That said, we now see iron ore cost curve support and China’s imports of iron ore from non-major suppliers have contracted back to historic lows.

If our baseline economic forecasts prove correct, we now have an attractive entry point for key stocks.

Citi says the Rio Tinto share price is a buy

Citi has retained its buy rating on Rio but has cut its CY23 earnings per share (EPS) estimate by 16%.

The Rio Tinto share price is currently down 9.4% in the year to date.

The post Why is the Rio Tinto share price faring worse than the ASX 200 today? appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in BHP Billiton Limited and Fortescue Metals Group 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 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 New Hope Corporation Limited (ASX: NHC) share price has avoided the market selloff on Thursday.

In afternoon trade, the coal miner’s shares are up over 6% to $6.10.

This means the New Hope share price is now up almost 170% since the start of the year.

Why is the New Hope share price racing higher?

Investors have been scrambling to buy the company’s shares today after it announced an on-market share buyback.

Incredibly, despite rising by almost 170% in 2022, the company’s board and management teams believe the New Hope share price still “does not accurately reflect the underlying value of the Company’s assets.”

In light of this and after taking into account the company’s future expected operating and cash flow requirements, the board has unanimously approved an on-market buyback of ordinary shares for up to $300 million. This buyback is scheduled to commence on or around 17 November 2022 and be completed within 12 months.

New Hope believes the buyback represents an opportunity to enhance the value of the remaining shares on issue, as well as provide an opportunity to improve the liquidity of the stock.

New Hope chair, Robert Millner, commented:

The Company expects its strong cash generation to continue as demand for high energy and lower emission thermal coal outstrips ongoing tight supply. The Board has carefully considered how to return surplus capital to shareholders, in addition to the record fully franked dividends declared at the full year results.

We believe that the Buy-Back will benefit all our shareholders as it will reduce the number of shares on issue, thereby supporting the Company’s return on equity, earnings per share and dividend per share, for all shareholders who continue to hold shares in New Hope Corporation.

What’s next?

New Hope may not stop at this buyback when it comes to capital management.

The release notes that the company will continue to assess various options to return capital to shareholders.

Though, the exact nature, amount, and timing of any further capital returns beyond this buyback will depend upon market conditions and its capital outlook.

The post New Hope share price jumps on $300m buyback plans appeared first on The Motley Fool Australia.

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More reading

• Why A2 Milk, New Hope, Perpetual, and Talga shares are charging higher
• 5 ASX shares that have crushed the market this year
• If CBA is right, ASX 200 coal shares should keep the good times rolling
• If I’d spent $5,000 buying this ASX 200 coal share a year ago, here’s what I would have now
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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 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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