Blog Post Title One

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The stuff you need to know about the day in business, markets and startups
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The S&P/ASX200 is lower today, dropping 45 points or 0.6% to 7,326 and crossing below its 125-day moving average.

The RBA ditched its bond yield target and its previously hallowed 2024 rates guidance.

The financial and mining sectors dragged, Whitehaven Coal (WHC) and IGO Limited (IGO), both scuttled by 9.1%

The Top 200 company index has now lost 1.6% over the last five days, and sits 4% below its 12 month high.

Annette's Angle

Market sentiment was building that the RBA had lost control of monetary policy.  Today’s statement did little to clear the air.

Leaving the cash rate at ten basis points and formally abandoning yield curve control - no longer targeting the April 2024 bond - surprised no-one. The latter made clear last week when no bond purchases were announced despite soaring rates.

Then it got interesting.  

Maintaining QE (bond purchases) at the same rate of $4 billion per month until February 2022 was arguably a dovish surprise. Secondly, in a modest push-back to aggressive market pricing of cash rate increases, the Bank is “prepared to be patient”.

That combination took some steam out of the Australian dollar and briefly lifted the ASX200.

At the time of writing, the Governor is in a last minute Q&A webinar - the icing on the “poor communication” cake - as no notice of the event was given aside from the postscript in today’s statement.

And where are the global forces, such as commodity prices, other central bank actions and China’s policy shifts. Seems we have to wait for Friday’s Statement on Monetary Policy for that.




What I'm Watching
Akshay Bhaskar,
Equites Analyst at Shares in Value
ASX: MLD

R
obust. Outlook + Modest Valuation + 6 % Dividend Yield makes it a perfect blend.

The importance of dividend income cannot be understated in a low-interest rate environment. However, it is extremely crucial to look for companies that have stable cash flows underpinning their distributions.

Maca (ASX: MLD) is one such top notch company. Maca is one of Australia’s leading diversified contracting groups, with operations spanning across Australia and internationally. They are essentially a partner to the mining and resources sector, specialising in a wide array of activities – thereby adding diversity. 

Maca’s business has significant tailwinds, and the company has been delivering both - operationally and financially. The firm has consistently grown its revenues and earnings and given the robust outlook; it is expected to keep this trajectory going.

Maca already comes with $3.1 billion of work-in-hand in their pipeline across all business segments. This outlook coupled with extremely modest valuations and a staggering 6% fully franked dividend yield should put Maca on top of the Wishlist as far as dividend stocks go.

Are you looking for high yield and reliable dividend stocks? Click here to download our Top 3 Dividend Stocks to Buy

All of the content we create at ausbiz we provide free to our subscribers, but we couldn't do that without the support of our commercial partners. This article is provided by Shares in Value (AFSR 001283429).

Today's Top 3

Jun Bei's off to the races with these three buys

Jun Bei Liu from Tribeca Investment Partners says her tipping thesis at the races is just like choosing stocks, stick with the quality companies that have a proven track record of performance. Check out which stocks she's backing.

The RBA's "astonishing" rates back down 

The RBA has scrapped its yield curve control policy, but it will keep purchasing the April 2024 bond at its current rate of $4B a week until at least mid-February. The cash rate remains at a historic low of 0.10%, but the bank has backed away from its hard rhetoric around a 2024 liftoff. Listen to our panel of experts' take on what comes next and why.  

Turn your portfolio green in more ways than one with these three stock picks

When investing in green energy, David Franklyn from Argonaut Funds Management says investors often look at the players in the lithium, copper and nickel space. But he says rare earths will also be the key focus over the next 10 years. David tell us what to look for. 

Stock of the day

Netwealth (NWL)

Netwealth (NWL) is proposing a merger with Praemium (PPS) in a deal worth $785 million. 

Praemium's board saying though that the proposal undervalues the business and is not in the best interest of shareholders.

Gary Glover from Novus Capital says the dance starts now, and it's a good time to do it when your PE ratio is at 70 times. However, he thinks Netwealth itself is pretty fully priced at these levels and the stock is showing a topping pattern. 

Howard Coleman from TeamInvest says while Netwealth's high P/E is a niggling point, he reckons it won't even be earnings per share accretive in the first year. 

Get the lowdown on which way, will Netwealth pay...
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