Rudi’s View: Antipa, Computershare, IPH, Lynas, Macquarie, Rio Tinto & More

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            [3] => ((EDV))
            [4] => ((RIO))
            [5] => ((MQG))
            [6] => ((MPL))
            [7] => ((CGF))
            [8] => ((AMP))
            [9] => ((SUN))
            [10] => ((IAG))
            [11] => ((QBE))
            [12] => ((CPU))
            [13] => ((S32))
            [14] => ((STO))
            [15] => ((TCL))
            [16] => ((TLC))
            [17] => ((AMC))
            [18] => ((MGR))
            [19] => ((BSL))
            [20] => ((LYC))
            [21] => ((SOL))
            [22] => ((APE))
            [23] => ((ZIP))
            [24] => ((CMM))
            [25] => ((REH))
            [26] => ((RWC))
            [27] => ((IGO))
            [28] => ((BOE))
            [29] => ((ING))
            [30] => ((IPH))
            [31] => ((HMC))
            [32] => ((RSG))
            [33] => ((PNR))
            [34] => ((NXG))
            [35] => ((ABB))
            [36] => ((OBM))
            [37] => ((DMP))
            [38] => ((RMS))
            [39] => ((GMD))
            [40] => ((AZY))
            [41] => ((AAR))
            [42] => ((BTR))
            [43] => ((GHM))
            [44] => ((LM8))
            [45] => ((MAU))
            [46] => ((SMI))
            [47] => ((SX2))
            [48] => ((STM))
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            [6] => MPL
            [7] => CGF
            [8] => AMP
            [9] => SUN
            [10] => IAG
            [11] => QBE
            [12] => CPU
            [13] => S32
            [14] => STO
            [15] => TCL
            [16] => TLC
            [17] => AMC
            [18] => MGR
            [19] => BSL
            [20] => LYC
            [21] => SOL
            [22] => APE
            [23] => ZIP
            [24] => CMM
            [25] => REH
            [26] => RWC
            [27] => IGO
            [28] => BOE
            [29] => ING
            [30] => IPH
            [31] => HMC
            [32] => RSG
            [33] => PNR
            [34] => NXG
            [35] => ABB
            [36] => OBM
            [37] => DMP
            [38] => RMS
            [39] => GMD
            [40] => AZY
            [41] => AAR
            [42] => BTR
            [43] => GHM
            [44] => LM8
            [45] => MAU
            [46] => SMI
            [47] => SX2
            [48] => STM
        )

)

This story features JB HI-FI LIMITED, and other companies.
For more info SHARE ANALYSIS: JBH
The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

This week's updates on strategy and preferred stock picks.

By Rudi Filapek-Vandyck, Editor

Economists at the National Australia Bank (NAB) formulated it as follows: “For the RBA the appropriate stance will be to remain broadly around neutral, for now”.

Equity strategists at Morgan Stanley –Chris Nicol and Chris Raad, or simply Chris & Chris– had already been on the ticket for a prolonged pause in RBA policy action, even before Thursday’s local data releases triggered yet more pricing out of RBA rate cuts for the medium term.

The direct impact on the local equity market is there for everyone to witness with the ASX200 experiencing yet another downday on Thursday.

The Big Question remains what all this means for economic momentum as that might ultimately decide whether the RBA is truly done with rate cutting or whether it needs to start tightening instead before long.

Chris and Chris are still of the view the RBA’s pause will have a negative impact on dwelling construction and consumer spending, which will reverberate for local businesses still battling persistently high costs.

Their view is therefore that, with hindsight, the market’s previous exuberance regarding discretionary retailers and other consumer-related stocks, as well as for construction-related exposures, was simply over the top and this has been swiftly corrected throughout the weeks past.

Open up a price chart for discretionary retailers and that downward correction instantly shows itself.

Chris and Chris are of the view this year’s economic surprise on the back of RBA rate cuts already delivered is likely to now trigger a slowdown.

Not a big disaster, but a noticeable slowdown nevertheless. If this anticipation proves correct, the RBA will eventually start thinking about more rate cuts yet again.

But investors should not get overly excited at this stage. Such reversal is considered unlikely for the first half of 2026 and in the meantime the domestic economy will start exhibiting a patch of weakness.

This, both strategists suspect, might well keep a lid over share prices for building- and consumer-related businesses for longer — maybe even for the market generally?

One caveat is recent consumer sentiment readings suggest less sensitivity than expected, but maybe the prospect of a prolonged pause hasn’t genuinely sunk in yet? Or are Chris and Chris too downbeat?

Sector analysts at Macquarie recently expressed their preferences for JB Hi-Fi ((JBH)), Harvey Norman ((HVN)) and Coles Group ((COL)), with an ongoing negative view on Endeavour Group ((EDV)).

Incidentally, the monthly NAB business survey showed business conditions are now running firmly above long-run average, supported by better trading conditions and higher profitability. Even capex intentions are now above average (employment is not).

With AI and technology stocks equally out of favour –adhered to some cyclicality being present in that sector too– it makes sense to both Morgan Stanley strategists to have plenty of portfolio exposure to energy and materials companies as global growth in 2026 should be well-supported through further Fed rate cuts and the likes of China issuing more stimulus.

Talking about materials, Rio Tinto ((RIO)) is organising its Capital Markets Day (i.e. presentations to analysts and investors) on December 4th in London and analysts at Barclays predict the event will prove positive for the share price.

Management is expected to announce more cost cutting (potentially -US$1bn over three years), portfolio restructuring (asset sales by any other name), moderated capex and growth ambitions in lithium, as well as potentially an asset swap with Chinalco which then allows the company to start share buybacks.

Rio Tinto is now the laggard vis a vis BHP Group and any signs of the gap closing should be well-received, Barclays suggests.

Returning to Australia and the RBA, UBS points out investor lending now makes up around two-fifths of total new housing loan commitments each quarter in Australia.

The strength in investor housing lending has come amid the decline in mortgage rates and also near record low rental vacancy rates.

As yet again revealed in the latest lending data, new housing lending continues to rise as home prices and housing demand have increased.

The value of new housing investor lending surged 17.6% q/q to record highs, with owner-occupier lending still up a strong 4.7% q/q.

First-home buyers made up one-fifth of new loan commitments in Q3 and UBS suggests activity will have been supported from October by the government’s expanded deposit guarantee.

An earlier strategy update by UBS shows more optimism than expressed by Chris and Chris, with UBS strategists of the view the impact from the three RBA rate cuts delivered in 2025 has not yet fully been transmitted to consumers in Australia.

UBS therefore does not anticipate the slowdown predicted, but instead argues recent years have proven RBA rate moves carry less impact.

No more rate cuts locally should thus not prevent the ASX from posting further gains, also because elsewhere (Federal Reserve) there’s still stimulus being injected.

Aussie Financials: Quality Of Earnings

New research by financial sector analysts at Morgan Stanley suggests there’s a connection between quality of earnings and multi-year shareholder returns.

Their closer scrutiny of domestic financials revealed statutory earnings have fallen short of underlying earnings to the tune of -11% over the past three years, and -15% over the past six years.

On that basis, the recommendation made is that investors should consider rotating into those financial companies with strong or improving earnings quality.

Quality is hereby defined as statutory earnings in line or close to underlying earnings, rather than at a significant gap.

Sometimes accountancy adjustments allow companies to report higher earnings than seems justified on an ‘underlying’ basis and while this may not necessarily matter in the short term, Morgan Stanley’s research suggests it does matter when that gap persists for longer.

Exhibit number one is Macquarie Group ((MQG)) whose shares have been re-rated in recent years and the suggestion is this is due to no difference between statutory and underlying. Literally: what you see is what you get as a shareholder.

The worst offenders, so to speak, have been Medibank Private ((MPL)) and Challenger ((CGF)) and in both cases the ‘gap’ is expected to close. In the case of Challenger, this will still be a multi-year process, the analysts predict (I won’t bore you with the finer details).

AMP ((AMP)) too should see its gap narrow further.

Morgan Stanley also believes better earnings quality has helped share prices for insurers Suncorp Group ((SUN)) and Insurance Australia Group ((IAG)) and it has started to impact positively for QBE Insurance ((QBE)).

The odd one out, it seems, is Computershare ((CPU)) for which the gap between statutory and underlying is expected to persist (the result of embedded accountancy practices).

This is why Morgan Stanley’s rating remains Underweight with a reduced target to $31.90, below the current share price.

Australia Lags Global Strength In Dividends

Capital Group reports global dividends rose by 6.2% (measured in USD) to US518.7bn in this year’s Q3 — a record for the quarter.

The adjusted core growth (excluding ‘specials’) was still 6.1% with 88% of companies lifting or keeping their payout steady.

Banks and insurers paid out the most, with the financial sector accounting for nearly half of the increase.

The news was not so great for shareholders in Australia where payouts retreated by -7.4% (core) placing the ASX near the bottom of global rankings for major markets year-to-date.

Banks are hardly increasing their dividends but energy and mining companies are mostly to blame. Outside of banks and resources, the remaining one-third of Australian companies managed core growth of 3.0%.

According to Capital Group, the decline in Australia’s topline rate was more severe than that in the core rate, mainly owing to the weaker Australian dollar compared to Q3 2024.

In the first nine months of the year, Australian negative core dividend growth was -9.0%, easily the weakest of any major market researched.

Separate research by Morgan Stanley has identified a number of companies whose dividend should at least grow in line with the market, but likely higher:

• AMP
• Coles Group
• Macquarie Group
• Rio Tinto
• South32 ((S32))
• Santos ((STO))
• Transurban ((TCL))
• The Lottery Corp ((TLC))

UBS Eyes Europe

Following on from Weekly Insights this week, below is an excerpt from UBS‘ latest strategy update for European equities:

“Our base case does not forecast European equities to outperform the US, but the balance of risks has shifted positively.

“If catalysts such as stronger-than-expected earnings, successful policy implementation, or accelerated AI adoption materialise, Europe could deliver persistent positive surprises.”

December Index Changes

If Morgan Stanley‘s forecasts prove correct, Australia’s Top 50 index will see yet more changes in December as Amcor ((AMC)), Mirvac Group ((MGR)) and BlueScope Steel ((BSL)) could well be replaced with Lynas Rare Earths ((LYC)), WH Soul Pattinson ((SOL)) and JB Hi-Fi.

For the ASX100, potential inclusion candidates have been identified in Eagers Automotive ((APE)), Zip Co ((ZIP)) and Capricorn Metals ((CMM)) with Reece ((REH)), Reliance Worldwide ((RWC)) and IGO Ltd ((IGO)) potentially demoted.

The ASX200 could well see Boss Energy ((BOE)) dropped, as well as Inghams Group ((ING)), IPH Ltd ((IPH)) and HMC Capital ((HMC)) with likely replacements seen in Resolute Mining ((RSG)), Pantoro Gold ((PNR)), NexGen Energy (Canada) ((NXG)) and Aussie Broadband ((ABB)).

Morgan Stanley also sees a possibility for Ora Banda Mining ((OBM)) to replace Domino’s Pizza ((DMP)).

Shaw On Gold

We remain bullish gold and note recent market volatility as a healthy correction. Such were the words included in this week’s gold sector update by Shaw and Partners.

Preferred exposures (core holdings) are:

• Ramelius Resources ((RMS))
• Genesis Minerals ((GMD))

Favoured developers for additional leverage:

• Antipa Minerals ((AZY))
• Astral Resources ((AAR))
• Brightstar Resources ((BTR))
• Golden Horse Minerals ((GHM))
• Lunnon Metals ((LM8))
• Magnetic Resources ((MAU))
• Santana Minerals ((SMI))
• Southern Cross Gold Consolidated ((SX2))
• Sunstone Metals ((STM))

Also read last week’s: https://fnarena.com/index.php/2025/11/06/rudis-view-amcor-charter-hall-challenger-goodman-woolworths-more/

Monday’s: https://fnarena.com/index.php/2025/11/12/rudis-view-new-trends-recurring-anxieties/

(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions.)  

P.S. I – All paying members at FNArena are being reminded they can set an email alert for my Rudi’s View stories. Go to My Alerts (top bar of the website) and tick the box in front of ‘Rudi’s View’. You will receive an email alert every time a new Rudi’s View story has been published on the website. 

P.S. II – If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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