Daily Brief Australia: Orica Ltd, JB Hi-Fi Ltd, Iron Ore and more

In today’s briefing:

Australia: Last Look at Potential Passive Selling in February
EQD | JB Hi-Fi (JBH AU) Faces Volatile Trading After Earnings Announcement
Iron Ore Tracker (10-Feb-2025): Rangebound / Pounding the Table On Fenix Resources (FEX AU)

Australia: Last Look at Potential Passive Selling in February

There are 6 stocks in Australia that could be deleted from global passive portfolios later this month, though the probability of deletion varies across the stocks.
If deleted, passive trackers will need to sell between US$234m-330m in the stocks. Impact is high at between 7-23 days of ADV.
The potential deletions have underperformed the S&P/ASX 200 (AS51 INDEX) over nearly every time period from 1 week to 3 months. Shorts have increased on all stocks recently.

JB Hi-Fi Ltd (JBH AU) announced HY 2025 results this morning. Price increases 5.5% in early trading but gains were lost by noon.
Sales Up 9.8% to A$ 5.67m; EPS up 8.0% to A$ 2.611; interim dividend up A$ 0.12 to A$ 1.70. Results are in-line/slight beat.
Volatile trading can make for opportunities. Investors can speculate on a positive Post Announcement Earnings Drift (PEAD) or consider option strategies, as implied volatility remains elevated.

Goldman Sachs has upgraded its iron ore price forecast, highlighting rising near-term demand from China’s steel sector during the spring construction season and weather-related disruptions at Australian ports.
However, Goldman is bearish on iron ore for the second half (a consensus view), predicting a decline in China’s steel demand and the emergence of lower-cost supply.
We continue to pound the table on Fenix Resources (FEX AU). Read “Fenix Resources (FEX AU) Q2 FY25 Update: Close to Tripling Production.

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