Rising energy costs – which have underpinned the inflation epidemic this year and recession worries – were also on full display on Wednesday. Oil prices fluctuated after the European Union agreed to cut 90% of Russian oil, while reports said OPEC+ would suspend Russia’s participation in the current production deal.
Locally, Origin highlighted the chaos in the energy market as its shares plunged after the company lowered its profit forecast due to coal supply issues affecting Australia’s largest power station, its Eraring factory in New South Wales. Coal production problems at supplier Centennial Coal’s nearby Mandalong mine are expected to continue into next year.
“The recent under-delivery of coal at Eraring is resulting in lower plant production, additional replacement coal purchases at significantly higher prices, and is exacerbated by coal delivery constraints by rail” , said Origin.
Meanwhile, the local economy has grown enough to justify the series of rate hikes priced in by the market.
Betashares chief economist David Bassanese noted that the economy recorded stronger than expected first-quarter GDP growth of 0.8% “despite weather-related disruptions and the Omicron outbreak. – testimony to the strength of cashed-in Australian consumers”.
There are other silver linings EY chief economist Cherelle Murphy said.
“Mining profits reflected the recovery in Australia’s terms of trade, which rose 5.9%, mainly because export prices rose 9.6%.
“While revenues flow first to LNG, coal and iron ore producers who have benefited from limited supplies from other countries, these companies are hiring workers and raising wages to meet demand, and paying more for their inputs, which has positive effects. ”
Meanwhile, WeWork in Australia, ASX-listed coworking space operator Victory Offices, confirmed the closure of all its Sydney city locations and lost its chief financial officer.
Quote of the day:
“Nothing can change the fundamental flaw of this ultra-small ticket, buy now, pay later. You have to do these things very quickly and very precisely,” said former Humm chairman Andrew Abercrombie.
“And that’s where – everyone did it very quickly, but nobody did it very accurately, and that’s what kills every single one of these guys is the losses.”
Message of the day:
You may have missed: As Mike Cannon-Brookes goes after AGL’s doors, his former bidding partner, Canadian investment giant Brookfield, has already slipped word to the energy giant’s board, according to the Australian Financial Reviewin the Street Talk section. Watch this place.
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