ASX to open higher despite Wall St falls
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Financial services software maker Iress will give its takeover suitor EQT more time to complete due diligence on the business.
The news comes a week after Australian private equity group BGH withdrew from its pursuit of Hansen Technologies in a deal valuing the tech group at $1.3 billion.
Financial services software maker Iress has extended due diligence for suitor EQT. Credit:Nic Walker
EQT is a global private equity firm which has lobbed a non-binding bid for Iress which would be worth $15.91 per share before franking credits. The firm had 30 days to complete due diligence, but Iress told investors this morning it would grant an additional 10 days of exclusive access to lift the lid on the business.
“The [Iress] board recommends that Iress shareholders take no action in relation to the proposal by EQT. There is no certainty that the proposal will result in a transaction,†Iress management said in a statement.
Shares closed down 3 per cent on Thursday to $13.99.
Hansen shares have dropped since BGH walked away and last traded at $5.58 valuing the group at $1.1 billion.
Skin tissue repair biotech Polynovo has lost its chief operating officer to CSL.
The $1.3 billion wound treatments maker told investors this morning that Anthony Kaye had resigned from his post. He had come across to Polynovo from CSL and would now be returning to the plasma giant “in a more senior positionâ€.
Return to sender: Biotech PolyNovo says its COO is returning to CSL. Credit:Chris Hopkins
Chief executive Paul Brennan said the firm was disappointed to see Kaye go but that the company was now in a “business as usual†position thanks to the structural changes he made during his tenure.
Polynovo shares are down 16 per cent over the past six months, closing at $2.03 on Thursday. The business posted losses up 9.8 per cent for 2021, to $4.6 million.
The $139 billion CSL reported this week that its CEO Paul Perreault will receive a total realised remuneration package worth $US45.3 million ($61.25 million) for steering the company through 2021. Long-term incentives which vested during the year make up the majority of these payments, coming in at $US42 million.
Westpac chief executive Peter King has underlined a deterioration in housing affordability, saying regulators should wait for lockdowns to end before assessing whether there was a need for lending curbs to be introduced.
As ultra-low interest rates continue to push up property prices, Mr King said a key question was whether the market would slow down on its own because houses had become so expensive for buyers.
Westpac has flagged a rise in housing affordability. Credit:Justin McManus
Facing a wide range of questions from a regular parliamentary inquiry on Thursday, Mr King also indicated the banking giant would be joining the stampede into the buy now, pay later (BNPL) sector, with an unspecified product planned for later this year.
Despite lockdowns hitting the economy hard this quarter, house prices have continued to climb briskly in recent months, albeit at a slower pace than earlier in the year.
Mr King said the bank’s preferred measure of housing affordability- the time it takes to save a deposit for an average house - was close to worst it has been in thirty years.
“It’s at the worst level it’s been for some time,†he said before the House of Representatives economics committee. “When we look at housing affordability at the moment it’s pretty stretched.â€
Mr King, who runs the country’s second largest mortgage lender, said the causes included the very low level of interest rates, alongside an imbalance between housing supply and demand.
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Stocks on Wall Street lost more ground Thursday after a small early gain faded, keeping the S&P 500 and the Nasdaq headed for their first weekly decline in three weeks.
The S&P 500 fell 0.5%, its fourth straight drop. Health care and technology companies were the biggest weights on the benchmark index, offsetting gains by banks and energy stocks.
The latest pullback came as investors continue to assess the pace of economic growth amid worries that the rapid spread of the coronavirus delta variant will dampen consumer confidence and spending.
Wall St finished the week lower.Credit:AP
“The economy seems to be slowing down a little bit and it’s hard to know how much is temporary because of the delta variant and how much is the new normal,†said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
The S&P 500 dropped 20.79 points to 4,493.28. The index is now within 1% of the all-time high it set last Thursday. The Dow Jones Industrial Average fell 151.69 points, or 0.4%, to 34,879.38 and the Nasdaq composite slid 38.38 points, or 0.3%, to 15,248.25.
Small company stocks fared better than the broader market. The Russell 2000 index gave up 0.60 points, or less than 0.1%, to 2,249.13.
Bond yields mostly fell. The yield on the 10-year Treasury note slipped to 1.30% from 1.33% late Wednesday.
The holiday-shortened week has given investors several reports, some conflicting, to review for clues on the direction of the economy.
The Labor Department said Thursday that the number of Americans seeking unemployment benefits fell last week to 310,000. At their current pace, weekly applications for benefits are edging toward their pre-pandemic figure of roughly 225,000.
The upbeat report follows others that show the jobs market is still struggling to recover. The Labor Department’s jobs survey for August was far weaker than economists expected, but the agency has also reported that employers are posting record job openings.
“The big question is whether the job market will get a lot stronger toward the end of this year into next year,†Zaccarelli said.
The Federal Reserve said Wednesday that its latest survey of the nation’s business conditions, dubbed the “Beige Book,†showed U.S. economic activity “downshifted†in July and August.
The central bank said the slowdown was largely attributable to a pullback in dining out, travel and tourism in most parts of the country, reflecting concerns about the spread of the highly contagious delta variant.
Fed officials have indicated they expect to dial back on stimulus measures by year’s end, and Treasury Secretary Janet Yellen has warned Congress that she will run out of maneuvering room to prevent the U.S. from breaching the government’s borrowing limit in October unless the debt ceiling is raised.
AP
ASX futures up 30 points or 0.4% to 7396 at 6.32am AEST
Hello and welcome to a rates-day edition of Markets Live.
All the major US markets closed lower overnight but the futures were up 30 points or 0.4% to 7396 at 6.32am.
Your editors today are Emma Koehn and Colin Kruger.
This blog is not intended as financial advice.
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