ASX down 03 iron ore plunges to US93
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Pub baron and multi-billionaire Bruce Mathieson has poured himself a fresh pint of shares in hotels and drinks retailer Endeavour, telling investors yesterday afternoon that he was the proud owner of an additional $54 million in stock.
Mr Mathieson acquired 8.3 million shares in the business across three different days last week, adding to his already significant 14.6 per cent holding in the freshly demerged business.
Billionaire Bruce Mathieson is buying up on his pubs and pokies empire. Credit:Paul Jeffers.
Endeavour, which owns BWS, Dan Murphy’s and a range of pubs and hotels across the country, was once part of supermarket giant Woolworths. It was demerged earlier this year in a $10 billion float.
Mr Mathieson was a 25 per cent owner in Endeavour’s ALH Group prior to the demerger, with his stake in the hotels chain converting to a sizable parcel of shares in the new standalone entity.
His purchase comes as lockdowns in Sydney and Melbourne are on the path to easing, and could be a sign that the billionaire is hopeful for a strong rebound as Australians race back to bars and pubs to pour some pints of their own.
The ACCC has signed off on a deal between health fund Nib and its health services joint venture Honeysuckle Health to form a buying group for health insurers to collectively negotiate contracts with health providers.
The group will be allowed to operate with smaller insurers, on the proviso that bigger funds including Medibank, Bupa, HCF and HBF are not allowed to join.
Nib and Honeysuckle Health will be allowed to collectively negotiate contracts with health providers. Credit:Chris Hopkins
This arrangement will see the buying group negotiate on behalf of Nib and the other health fund members to broker contracts with medical centres and hospitals.
The buying group has been strongly criticised by some medical groups including the Australian Medical Association, who warn this type of buying group model will lead to a more US-style approach to healthcare where insurers have greater control over what kinds of treatments patients get.
However, Nib chief executive Mark Fitzgibbon has rebutted those suggestions, telling this masthead earlier this year that neither Nib nor Honeysuckle would ever restrict access to healthcare providers or challenge treatment decisions made by doctors.
The ACCC agreed the group is unlikely to lead to more US-style care. “The ACCC also noted that health insurers are currently engaged in the contracting practices proposed for the buying group, and that these practices are likely to continue even if the authorisation was not granted,†the watchdog said in a statement.
Nib shares opened 0.9 per cent lower to $6.70.
IGO has confirmed media reports that takeover talks with nickel miner Western Areas have progressed.
“While IGO does not comment on media speculation, the Company advises that discussions remain at an early stage with due diligence having commenced in recent days,†it tells the ASX.
IGO has proceeded to due diligence with Western Areas despite the interest of Andrew Forrest. Credit:Bloomberg
“IGO will progress due diligence over coming weeks, however there is no certainty that a definitive transaction
will result once this period of diligence is complete.â€
Western Areas, is not short of friends, of course.
Just 24 hours after IGO first confirmed talks last month, billionaire Andrew ‘Twiggy’ Forrest showed up as a substantial investor at Western Areas.
The Australian market has fallen 0.65 per cent at the open today after a rocky night on Wall Street and pervading fears over a real estate market crash in China.
At 10.12am the ASX200 had dropped 47 points to 7201, with nearly all sectors into the red. Financials and utilities saw the biggest falls, with both areas down 1 per cent. Consumer staples was the only sector to eke out a small 0.22 per cent gain.
The ASX was dragged down by iron ore prices and continued Evergrande uncertainty. Credit:Shutterstock
However, the market began to regain ground quickly, bouncing back to be down just 30 points, or 0.4 per cent, at 10.20am.
The fall continues a streak of consecutive falls in the ASX200 over the past three days, with the bourse down 3.4 per cent since Friday.
Individually, asset management business Janus Henderson was the biggest fall, down 4 per cent, followed by jobs website SEEK and buy now, pay later operator Zip.
Resource companies led the charge dragging the ASX back up, with Lynas, Regis and Champion Iron all gaining between 2 and 3 per cent.
Stocks fell sharply overnight on Wall Street, partially due to fears Chinese property giant Evergrande could default on more than $400 billion in debt, throwing the country’s real estate market into turmoil.
Infrastructure group APA has lobbed a rival offer for AusNet valuing it at $10 billion, a day after the takeover target opened its books to Brookfield after receiving a $9.6 billion offer from the Canadian infrastructure investor.
APA told the ASX it has made a non-binding indicative proposal to the Board of AusNet to acquire the group by way of a scheme of arrangement for $2.60 per share in cash and shares.
“The proposal would bring together two high quality businesses and create a listed flagship Australian group with the scale and capability to accelerate the $20 billion growth in electricity transmission infrastructure needed to support the decarbonisation of Australia’s economy,†APA says.
Ausnet owns electricity distribution and infrastructure assets across the south-east.Credit:Paul Rovere
Brookfield’s $2.50 per share cash offer on Monday follows two previous unsuccessful attempts by Brookfield. In August, the Canadian suitor lobbed a $2.35 a share bid for AusNet and subsequently raised it to $2.45 a share.
The bidding war is another example of Australian infrastructure assets lighting up the radar of offshore investors, with US firm KKR leading a consortium of investors in securing the $5.2 billion takeover of Spark Infrastructure in August.
ASX-listed AusNet is the largest energy distributor in Victoria and is 31.1 per cent owned by Singapore Power, with State Grid Corporation of China also holding a 19.9 per cent stake. AusNet shares jumped 20 per cent to $2.36 on news of Brookfield’s offer.
On Monday, Morningstar analyst Adrian Atkins said it was likely both offshore shareholders and ASX investors would back the deal, which is at a significant premium to the current share price.
Mr Atkins said there was strong international interest in Australian infrastructure assets as global funds searched for opportunities in a low rate environment.
“There is just a lot of cash out there looking for a home,†he said.
AusNet owns power transmission and distribution assets serving 1.5 million customers in southeastern Victoria.
Mr Atkins said there was strong international interest in Australian infrastructure assets as global funds searched for opportunities in a low rate environment.
“There is just a lot of cash out there looking for a home,†he said.
AusNet owns power transmission and distribution assets serving 1.5 million customers in southeastern Victoria.
Minutes after general insurer IAG released a statement about its chief risk officer resigning, the Bank of Queensland said he was joining their ranks.
The former IAG CRO, David Watts, will join BoQ early next year.
IAG’s David Watts has resigned to join the Bank of Queensland team.Credit:Louie Douvis
“Mr Watts has deep experience in financial and non-financial risk management and has held CRO roles at several leading financial institutions in Australia and New Zealand,†the bank said.
“Current Chief Risk Officer Adam McAnalen will remain an executive within the Group and will be moving into a new role to lead key elements of the integration and transformation program. Mr McAnalen will remain as Group CRO ahead of a transition to Mr Watts.â€
BoQ also announced its chief product officer Chris Screen had been promoted to the group’s business banking executive role.
“Having provided valuable leadership of the Business Bank amid a challenging period impacted by Covid-19 disruption, Fiamma Morton has decided it is the right time to pursue other opportunities and will depart as Group Executive BOQ Business,†the bank said.
Fintech, booze and food are the three top performing sectors in Australia’s fledgling equity crowdfunding space.
Equity crowdfunding, which became legal in Australia just a few years ago thanks to investment law changes, lets publicly unlisted companies offer their users and fans a small slice of their business, often starting with parcels as small as $50.
The space raised just $46 million for companies in the 2021 financial year, but that is more than double the $20.4 million raised in 2020, according to a new industry paper released by fundraising platform Equitise today.
Its review of the sector also outlines the three top performing sectors for raising cash in this format. Since 2017, fintech businesses have raised $19.5 million, alcohol producers have banked $9.5 million and food operators have netted just over $6 million.
That’s still a drop in the ocean compared to the country’s multi-billion venture capital sector, but Equitise boss Johnny Wilkinson argues the number of startups looking to the crowd is continuing to increase.
Outdoors retailer Kathmandu has leant heavily on its recently acquired surf retail division Rip Curl for its full-year results today, with the Torquay-based business driving almost all of the company’s growth for fiscal 2021.
Sales across the group, which includes Rip Curl, the eponymous Kathmandu brand and footwear brand Oboz, rose 15.1 per cent to $NZ922.8 million ($891 million) across the year, with earnings before interest and tax jumping nearly 50 per cent to $NZ92.2 million.
Black is out in Kathmandu’s new winter range.
A full 12 month contribution from Rip Curl, which the business acquired in late 2019, underpinned this result. The division was responsible for $NZ490 million in sales and $NZ56.9 in earnings, the latter of which was up a massive 1252 per cent on the prior year.
The company said the acquisition had outperformed expectations, and allowed Kathmandu to declare a final dividend of 3 cents per share, payable December 15.
Kathmandu itself saw sales plummet, however, down 17 per cent to $NZ354 million and earnings nearly halved to $NZ26.3 million. The division was heavily affected by the pandemic and associated lockdowns through much of 2021.
Those lockdowns have continued to batter the business, with Rip Curl sales down 12.8 per cent in the six weeks to September 12, and Kathmandu sales down 19.9 per cent.
Supply chain issues are also stymieing the retailer’s stock levels, with reduced factory capacity and freight congestion leading to delays and increased costs. Due to this, the company expects its first half profit for fiscal 2022 to be below the prior half.
Wall Street’s main indexes tumbled on Monday, as concerns about the pace of a global recovery hit economy-linked stocks at the start of a week in which the Federal Reserve will decide on potentially tapering its pandemic-era stimulus.
The S&P 500 fell 75.26 points, or 1.7%, to 4,357.73, it’s biggest drop since May. At one point, the benchmark index was down 2.9%, the biggest decline since last October. The S&P 500 was coming off two weeks of losses and is on track for its first monthly decline since January. The S&P 500 has gone an unusually long time without a pullback of 5% or more.
All the major US markets closed lower overnight.Credit:AP
The Dow Jones Industrial Average fell 614.41 points, or 1.8%, to 33,970.47. The blue-chip index was briefly down 971 points. The Nasdaq fell 330.06 points, or 2.2%, to 14,713.90. The Hang Seng, Hong Kong’s main index, dropped 3.3% for its biggest loss since July. European markets fell about 2%.
“What’s happened here is that the list of risks has finally become too big to ignore,†said Michael Arone, chief investment strategist at State Street Global Advisors. “There’s just a lot of uncertainty at a seasonally challenging time for markets.â€
The banking sub-index shed 2.9%, tracking U.S. Treasury yields as investors flocked to the safety of bonds on worries about the default of Chinese property developer Evergrande.
Wall Street’s main indexes have been hurt this month by fears of potentially higher corporate tax rates denting earnings and have shrugged off signs inflation might have peaked. The benchmark S&P 500 is on track to snap a seven-month gaining streak.
All eyes on Wednesday will be on the Fed’s policy meeting, where the central bank is expected to lay the groundwork for a tapering, although the consensus is for an actual announcement to be delayed until the November or December meetings.
“Markets have been priced to perfection for a long time and in this September lull that seems to be quite seasonal throughout history, markets are dealing with the thing they hate most â€" uncertainty,†said David Bahnsen, chief investment officer, The Bahnsen Group in Newport Beach, California.
“There is uncertainty around geopolitics, public health policy, tax and spending legislation, but this market has experienced almost no downside volatility for a long time and a pullback was long overdue.
Strategists at Morgan Stanley said they expected a 10% correction in the S&P 500 as the Fed starts to unwind its monetary support, adding that signs of stalling economic growth could deepen it to 20%.
The CBOE volatility index, known as Wall Street’s fear gauge, hit its highest level in a month.
AP and Reuters
S&P/ASX 200 Index futures dropped 1.4% to 7,118 as of 6:59 a.m. Sydney time. Futures relative to fair value suggest early decline of 1.4%. U.S. stocks fell, although the S&P 500 pared losses late in the session, amid a global rout sparked by China real estate angst and Federal Reserve tapering.
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