ASX slips; ends the week higher

ASX higher for the week as SOHN speakers give their tips for investing.

The ASX appears set to close lower for the second day in a row.

• Ramsay unveils quarterly revenue boost
• Resimac flags bumper interim profit
• Lovisa grows footprint by 80 stores

That’s all from Trading Day. The ASX closed lower in the wake of losses on Wall Street and in London overnight. SOHN Conference speakers gave their tips for investing.

James Kirby 7.01pm: Growth stocks still the best bet

Whoa! Just a second! Investors tied to their home-based PCs for the last six months are getting very excited about a rebound.

And there has been a rebound: the outlook for shares, residential property and gold has improved. But we are nowhere near back to a passably functioning economy — local or global.

That’s why if you look at your investment portfolio or super returns for the last 12 months you will be doing well to have advanced or rebounded at all.

Our best guide to overall investment returns is the progress of super fund balanced options, as that’s where most people have most of their money.

So how are they doing? Well, according to SuperRatings, the returns for the median balanced option over the past 12 months is minus 0.8 per cent. For the year to date (to the end of October) it is worse at -2.5 per cent.

Much as we enjoy reporting on investment news in an accelerating news cycle you, the investor, have to strip out the noise. You can’t make serious judgments on super returns over, say, a month.

Rather we invest for the long term and over the long term investment returns are declining, despite the endless attention we give to the winners, from Amazon to Afterpay.

Let’s just take a moment to look at the past.

Read more

Lachlan Moffet Gray 5.34pm: Murray Goulburn former execs fined

Two former executives of the collapsed dairy co-operative Murray Goulburn have been fined and temporarily banned from running a company after the Federal Court found they broke the law by failing to inform investors that the company would not hit financial targets.

Justice David Beach on Friday ruled that in February 2016 former Murray Goulburn CFO Bradley Hingle and former managing director Gary Helou breached the Corporations Act’s continuous order regime when they forecast a full-year net profit after tax result of $63m while promising to pay farmers $5.60 per kg of milk solid.

By March the company knew it would not meet earlier guidance, and in April slashed the price they intended to pay farmers and downgraded profit. Mr Helou and Hingle also announced they would be leaving the company to the ASX.

In 2019 ASIC commenced actions against the pair alleging they breached the law by failing to disclose material relevant to forecasts announced to the market.

Justice Beach said by failing to disclose the relevant information, Murray Goulburn shares were artificially inflated and “as a consequence, the market operated on a false basis”.

“It is not to be doubted that conduct leading to such a market distortion is serious to say the least,” Justice Beach said.

Mr Helou was ordered to pay $30,000 in costs to ASIC and was disqualified from managing a company for three years – aside from his own small private companies – while Mr Hingle was ordered to pay $25,000 and was disqualified from managing a company for two years, but permitted to manage a fashion company named Tank Stream Pty Ltd.

Mr Henlou was previously ordered to pay a $200,000 fine to the ACCC for violating consumer law while Mr Hingle reached a settlement with the competition regulator, paying $50,000 in costs and agreeing to not work in the dairy industry for three years.

Two class actions directed at Murray Goulburn relating to the incident have previously been settled before trial.

Canadian dairy conglomerate Saputo acquired Murray Goulburn for $1.31bn in 2018.

4.45pm: ASX closes slightly lower

A solid intraday bounce in Australian shares left the market down only slightly at the close on Friday despite a selloff in global markets as worsening COVID and related lockdowns eclipsed the recent euphoria about the US election outcome and Pfizer’s vaccine breakthrough.

The ASX closed down 13.02 points, or 0.2 per cent, at 6405.2 points.

BHP lost 1.9 per cent to $35.77 after the Fair Work Commission quashed its enterprise agreements covering the company’s internal labour hire arm.

In financials, Westpac lost 0.2 per cent and Commonwealth Bank inched 0.1 per cent higher, while non-bank lender Resimac shot up 18 per cent after it flagged a bumper interim profit figure.

Biotech PolyNovo shot up 5.6 per cent to $3.04 after the US FDA approved the pivotal trial investigation device exemption, which allows the company to begin clinical trials.

Meanwhile Lovisa shot up 14.5 per cent after the accessories retailer announced it had acquired a European retail chain, with plans to rebrand 80 of its stores, spanning Germany, Switzerland, The Netherlands, Belgium, Austria and Luxembourg.

The Australian dollar was steady, trading around US72.32c by the close of the ASX session.

Perry Williams 3.58pm: China fight leaves Aussie coal going nowhere

Australia’s rocky trade relationship with China has taken another hit with data showing all of the 20 giant ships held up in the Chinese port of Jingtang contain Australian coal, with the majority stuck offshore since June.

Fifteen of the ships have been anchored since June at the northern Chinese port, one of the key hubs for Australia’s metallurgical coal used to make steel. The remaining six ships have been stuck for at least a month, according to shipping data analysed by Bloomberg.

The ships hold between 2m to 3m tonnes of coal and all of the vessels departed from Australian ports with nine from the BHP owned Hay Point Terminal in north Queensland, eight from Gladstone Port and the remaining four from Dalrymple Bay Coal Terminal.

With Will Glasgow

Read more: Australian coal stranded at Jingtang as China trade fight worsens

Alice Uribe 2.35pm: Morgans downgrades CBA on valuation

While CBA has a solid risk profile and a relatively high-quality retail business, Morgans still thinks that the Australian lender is expensive relative to its major bank peers.

One aspect of CBA’s 1Q 2021 trading update this week that Morgans found disappointing was the lender’s operating expenses, which were up 2pc from 2H 2020 on a run-rate basis, excluding customer remediation provision charges in 2H 2020.

CBA attributes the rise in expenses to increased investment spend and higher staff costs due to continued impacts from Covid-19. Morgans downgrades CBA to reduce from hold.

CBA falls 0.2pc to $72.95.

Dow Jones newswires

Damon Kitney 2.30pm: Crown’s lack of learning ‘breathtaking’: inquiry

The Commissioner heading an inquiry into Crown Resorts has lashed the board of the James Packer-backed company for its failure to learn from its past mistakes and taken aim at director Michael Johnston for a potential breach of director’s duties during Mr Packer’s sale of shares to Melco Resorts.

During final submissions to the inquiry on Friday morning by Mr Packer’s private company Consolidated Press Holdings, an animated Commissioner Patricia Bergin questioned why the Crown board failed to take notice of warning signs contained in adverse publicity against the company for more than a decade.

“It doesn’t seem the focus went inwards. The board is where the buck stops. They didn’t look backwards. They don’t like to look backwards in this organisation,” she said.

“The absurdity of not learning from your past is really breathtaking.”

08-10-20 - NSW Casino Inquiry - Commissioner Patricia Bergin. Supplied

Her comments came as the Crown board broke ranks for the first time, with former director and Macquarie Group executive Ben Brazil requesting through his lawyer on Friday he be excluded from any negative findings against the board by the inquiry.

In a special submission to the investigation into Crown, Mr Packer and CPH’s suitability to retain the licence for its Sydney casino scheduled to open next month, Mr Brazil’s lawyer reiterated the banker had “thumped the table” demanding a full inquiry into the arrest of Crown’s staff in China in 2016 before he left the board in early 2017. The review was abandoned by his fellow directors after his departure.

Read more: Crown Resorts board breaks ranks as criticism builds

2.15pm: Analysts cautious on Wesfarmers

Analysts are cautious on Wesfarmers despite a strong trading update on Thursday and the share price has faded after almost matching its record high.

While several brokers raised their price targets overnight, none have upgraded and the bears are digging in their heels.

UBS stayed Neutral and says a PE ratio of 26 times is more than pricing in near-term strength, albeit it sees few negative catalysts and a strong balance sheet with $257m cash.

Goldman Sachs is also Neutral and says thThe key issue will be how the retail sales trends evolve as households enjoy a relatively open and likely wet summer holiday season and into 2021 with the prospect of a vaccine-lead return to normal consumer behaviour.

Macquarie also stays Neutral even as it sees continued strength in Bunnings while travel and leisure is restricted. A COVID-19 vaccine could see sales normalise quickly as consumers revert to travel and services spend, Macquarie says.

Citi keeps a Sell rating but says Wesfarmers’ premium valuation reflects optionality around acquisitions or capital returns given the lowly geared balance sheet, and notes that it continues to benefit from strong consumer spending and improving housing outlook.

2.05pm: PolyNovo soars on FDA approval

Shares in biotech PolyNovo have surged after the US FDA approved the pivotal trial investigation device exemption, allowing the company to begin patient recruitment after it receives hospital approval.

The recruitment is expected to begin early next year and conclude around the end of 2023.

“This is a significant milestone for PolyNovo,” chief executive Paul Brennan said.

“We are excited to begin this trial as it will build significant clinical data and further demonstrate the ability of NovoSorb BTM to enhance clinical outcomes and improve patients lives.

“We greatly appreciate the ongoing support of BARDA with financial support and significant contribution of skill and expertise of their team.”

PolyNovo shares last up 8 per cent at $3.03.

1.53pm: Bega wins peanut butter packaging dispute

Kraft Heinz loses its appeal over the "trade dress" of peanut butter labels now owned by Bega Cheese. Picture: supplied

Bega Cheese will be allowed to continue to use its current peanut butter packaging after the High Court dismissed an application for special leave to appeal by Kraft Heinz.

The dismissal means that the decision of the Full Court of the Federal Court of Australia handed down in April will stand.

“Bega Cheese looks forward to continuing to produce and supply our customers with our much-loved peanut butter products,” Bega said in a statement to the ASX.

“We are a proud Australian company and are proud to own Australia’s favourite peanut butter.”

Read more: Bega beats Kraft Heinz for peanut butter packaging

Patrick Commins 1.10pm: Unemployment already peaked: CBA

CBA says unemployment has peaked at around 7 per cent as it becomes increasingly evident that the unprecedented COVID-19 downturn is now being followed by an equally unprecedented economic recovery.

The bank’s head of Australian economics, Gareth Aird told the Australian that a slew of economic indicators, not least a seven-year high in consumer confidence, has sparked a massive rethink around the pace of the recovery.

“I think things are only going to get better, rather than worse,” Mr Aird said.

Economic activity in the second half of the year will be much more robust, with GDP expanding by 2 per cent in the September quarter and by 2.1 per cent over the final three months of 2020, the CBA forecasts show.

Crucially, that will help contain the peak of the unemployment rate at 7.1 per cent in this quarter - only marginally above the 6.9 per cent rate recorded in September - before falling to 6.6 per cent by the end of this year, and to 6.4 per cent in early 2020.

GDP in 2021 and 2022 will grow at a robust 4.2 per cent and 3.8 per cent, respectively.

Key to the rosier outlook is the incredible success in suppressing the virus, with no community transmission nationwide for days on end.

Mr Aird said in addition to consumer optimism, a rebound in business confidence, a turn in the housing market, and households’ “$100bn war chest of savings” will underline what is increasingly looking like a v-shaped recovery.

12.52pm: Costa appoints new CEO

Fruit and vegetable grower Costa Group has promoted chief operating officer Sean Hallahan to CEO after Harry Debney flagged his intention to retire from the role.

“Sean has been Costa’s Chief Operating Officer since October 2017 and we are delighted to have a person of Sean’s calibre and experience who brings a deep passion for our industry as well as over 20 years senior management and CEO experience in FMCG, including a background with growth oriented organisations with an emphasis on delivering high quality product categories with strong customer focus,” chairman Neil Chatfield said in a statement to the ASX.

Mr Hallahan will start the new role in March.

Outgoing Costa Group CEO Harry Debney. Picture: Aaron Francis

12.04pm: Stocks lower at midday

After briefly boucing off the intraday low in morning trade, the ASX is back down around 6393.4 or down 0.4 per cent at lunch, after Wall Street lost ground overnight on coronavirus concerns.

CBA is down 0.5 per cent and Westpac is 0.6 per cent lower. BHP is also weighing on the market, down 1.5 per cent, after it was forced to go back to the drawing board on a key labour model after the Fair Work Commission quashed its enterprise agreements.

Meanwhile Telstra is 1.5 per cent higher after announcing a major restructure yesterday.

Elsewhere, non-bank lender Resimac is 7.8 per cent higher after flagging a higher profit figure and accessories retailer Lovisa is trading up 11.6 per cent after announcing it had acquired a German retail chain and plans to rebrand at least 80 of its stores.

11.43am: What’s impressing analysts?

AusNet cut to Underperform: RBC

Brickworks cut to Sell: Morningstar

CBA cut to Reduce: Morgans

CBA raised to Hold: Jefferies

Fletcher Building cut to Sell: Morningstar

Fletcher Building cut to Neutral: JPMorgan

Flight Centre cut to Hold: Morningstar

GPT Group cut to Neutral: Macquarie

IDP Education raised to Add: Morgans

Macquarie Group Cut to Sell: Morningstar

Seek cut to Sell: Morningstar

Seven Group cut to Sell: Morningstar

Steadfast cut to Sell: Morningstar

Worley cut to Hold: Morningstar

11.35am: Tokyo open lower on Wall St losses

Tokyo stocks opened lower on Friday after rising for eight straight days, tracking losses on Wall Street amid concerns over spiking coronavirus cases.

The benchmark Nikkei 225 index was down 0.41 percent, or 103.74 points, to 25,417.41 in early trade, while the broader Topix index lost 0.60 percent, or 10.42 points, to 1,715.81.

AFP

11.32am: Gold miners lift on gold price rally

The gold miners are gaining ground in today’s session after gold prices lifted overnight as falls in equity prices prompted investors to flock to safe haven assets.

Newcrest is up nearly 3 per cent while Northern Star is trading up 5.5 per cent and Evolution Mining is 4.9 per cent higher.

11.30am: Energy stocks sink on lower oil prices

Energy is the worst performing sector in Friday’s trade on lower oil prices, after a surprise lift in US stockpiles last week.

“Expectations were likely anchored to a fall in US oil stockpiles after the American Petroleum Institute reported a 5.1 million barrel decline in US oil stockpiles for the week ending November 6,” said Commonwealth Bank commodities analyst Vivek Dhar said.

Demand concerns also helped push oil prices lower after the International Energy Agency cut its demand forecasts on new COVID-related lockdown measures.

Woodside is 0.9 per cent lower while Santos is down 2.3 per cent and Origin is 2.7 per cent lower.

Oil - Coronavirus pandemic

11.08am: CBA upgrades GDP forecasts

Commonwealth Bank economists have upgraded their GDP forecasts, saying that an unprecedented level of fiscal and monetary stimulus, coupled with an expected drawdown in accumulated savings and easing of COVID‑related restrictions, will support growth and job creation.

The bank now expects a fall in GDP of 3.3 per cent in 2020, followed by an increase in GDP of 4.2 per cent next year and 3.8 per cent in 2022.

The unemployment rate is expected to be 5.75 per cent at the end of 2021, 5 per cent at the end of 2022.

“There is plenty of evidence creeping into the data that signals strong outcomes next year are more likely than not,” the CBA economists said.

The latest economic forecasts from CBA Group#ausbiz #ausecon #markets #commsec @CommSec @CommBank pic.twitter.com/SJBNtyljGb

— CommSec (@CommSec) November 12, 2020

11am: Lovisa surges on Europe deal

Shares in Lovisa shot up nearly 20 per cent in early trade after the accessories retailer told the market that it had acquired a German retail chain in a €60m ($97.93m) deal, with plans to rebrand 80 of its stores, spanning Germany, Switzerland, The Netherlands, Belgium, Austria and Luxembourg.

Lovisa shares last up 15 per cent at $11.53.

10.35am: Superannuation funds continue to recover

Superannuation funds continue to bounce back, with the median balanced fund returning 0.5 per cent in October, according to SuperRatings.

Still, the median balanced super fund remains down 0.8 per cent of the 12 months through October, and members should be wary of further market volatility as the global pandemic is brought under control, SuperRatings said.

According to the research house, the median balanced option returned -2.5 per cent from January to October, but posted a strong recovery in the second half of the year.

“The super recovery is ongoing but has been faster and stronger than expected to date,” said SuperRatings executive director Kirby Rappell.

“There are clearly still significant risks and uncertainties, and we expect more market volatility heading into 2021, but overall members have reason to be reassured by the performance and resilience of funds’ portfolios this year.”

10.23am: ASX slips at the open

The ASX has slipped 0.39 per cent at the open to 6393.301 points after Wall Street lost ground overnight as the coronavirus worsens in the US.

BHP is down 1.7 per cent and Rio is 0.2 per cent lower.

The major banks are also lower, with CBA down 0.5 per cent and Westpac down 1.7 per cent.

Meanwhile non-bank lender Resimac has surged 13.2 per cent after the company flagged a firmly higher net profit after tax this morning.

Gold miners are among the best performers, Northern Star is up 3 per cent and Newcrest has gained 1.1 per cent.

9.34am: Ramsay unveils quarterly revenue boost

Private hospital operator Ramsay Health Care clocked a 1.5 per cent increase in total revenue for the first quarter, reflecting an increase in surgical admissions.

Still, the company stopped short of providing a full-year guidance, citing near-term uncertainties in the market.

“Ramsay’s operating results continued to be impacted by the COVID-19 pandemic in 1Q FY21,” managing director Craig McNally said.

“Surgical restrictions, regional outbreaks and lower demand for some services, combined with higher costs associated with operating in the current environment, have all impacted the results.

9.22am: Resimac flags bumper interim profit

Non-bank lender Resimac says first half net profit after tax is expected to be within the range of $48m and $53m, firmly up from $26.9m in the same period a year ago.

That reflected low 30 day BBSW resets, disciplined cost control, and growth in assets under management. As of 31 October, about 4.4 per cent of customers were in COVID payment deferrals, down from about 10 per cent of its customer base at June 30.

2Resimac CEO Scott McWilliam in his Sydney offices. Picture: John Feder

8.40am: Westpac customers urged to join class action

Law firm Slater and Gordon says that more than 368,000 Australians who were sold junk credit card and personal loan insurance by Westpac will today receive a court notice advising that they may be eligible to be part of Slater and Gordon’s consumer credit class action against the bank.

The law firm is representing customers who were sold credit card and personal loan insurance that was of little or no value, and that many customers would never have been eligible to claim against.

“We urge anyone who may have purchased credit card or personal loan insurance from Westpac to keep an eye out for this notice, and to sign up for the class action,” said Slater and Gordon practice group leader Andrew Paull.

“The Banking Royal Commission exposed the blatant misbehaviour of the big banks, ripping off unsuspecting and trusting customers; this class action will hopefully get back the money taken from them when pressured into buying worthless products.”

Slater and Gordon settled a similar class action in late 2019 that also alleged NAB customers had been miss-sold personal loan and credit card insurance, resulting in the compensation of 50,000 NAB customers

Similar notices for the ongoing ANZ and Commonwealth Bank class actions over junk insurance are expected to be sent out in coming months, Slater and Gordon said.

Eli Greenblat 8.35am: Lovisa grows European footprint by 80 stores

Accessories retailer Lovisa Holdings has announced the acquisition of the European retail store network of German wholesaler ‘beeline GmbH’, which is expected to add more than 80 stores to the Lovisa global store network across six European countries.

The beeline retail business currently operates 114 retail stores in seven countries selling fashion jewellery and accessories under the SIX and I AM brands. Lovisa will acquire the shares of the six retail trading entities of the beeline Group in Germany, Switzerland, The Netherlands, Belgium, Austria and Luxembourg, with all continuing stores to be rebranded to trade as Lovisa stores as part of the deal, worth €60m ($97.93m).

Lovisa has also entered into a put option agreement in relation to the acquisition of beeline France including a store network of 30 stores, providing beeline the option to sell the shares in beeline France to Lovisa following the completion of mandatory consultation with beeline France’s employee works council. The acquisition of each country is to be completed progressively from 1 March 2021 through to end May 2021. The combined cash requirement for fitout and inventory for the conversion of stores to Lovisa is expected to be less than €5 million, Lovisa said.

In a trading update, Lovisa said 24 stores in France remain closed and 39 of its stores in Britain are also closed as a result of government restrictions. In the remainder of its store network Lovisa has seen a continuation of the improved sales trend previously reported, with comparable store sales for the first 19 weeks of fiscal 2021 of down 9.2 per cent as a result of continued stronger performance from those markets that have been re-opened longest and with the least restrictions in place, with Australia and New Zealand continuing to be its best performing regions.

Lovisa store at Stockland Gladstone Shopping Centre. Picture: Mark Calleja

Angelica Snowden 8.30am: Promising results for UQ vaccine trials

An Australian-made coronavirus vaccine is showing promising early results, as it appears to be safe and effective among the elderly.

Early results from the University of Queensland vaccine trial show it led to development of virus neutralising antibodies in elderly patients, the Adelaide Advertiser reported.

It is also understood trials are ahead of schedule.

Health minister Greg Hunt is expected to tour the UQ laboratory today and provide an update on the vaccine.

“Their initial lead is that the vaccine through the phase 1 trials is proving to be safe and just as importantly it’s showing a positive response, which means it has got neutralising antibodies,” Mr Hunt said.

“Especially in the elderly. The elderly cohort is responding well,” he said.

The news came after Pfizer announced its vaccine candidate was 90 per cent effective and Australian authorities confirmed they would seek to fast track regulatory approvals of the drug in a bid to vaccinate five million people from March next year.

National Cabinet will meet today and discuss the rollout of a vaccine .

Read more: COVID-19 mink variant ‘won’t affect vaccines’, Anthony Fauci says

Bridget Carter 8.21am: Fantastic worth up to $669m

Fantastic Furniture is being valued at between $435 million and $669m on an enterprise value by Macquarie analysts ahead of its initial public offering.

The price equates to between 6.5 times and 10 times its earnings before interest and tax.

Fantastic Furniture, which is owned by Steinhoff International subsidiary Greenlit Brands, has plans to list through Macquarie Capital and Credit Suisse as early as this year.

It is forecast to generate $650.7m of sales for the 2021 financial year, up from $550.7m in the 2020 financial year to June.

Earnings before interest, tax, depreciation and amortisation is expected to be $76.7m, up from $61.7m in the 2020 financial year to June.

Net profit for fiscal 2021 is expected to be $47.6m, up from $38.5m for the 2020 financial year.

The retailer has 81 stores nationally and generated 29 per cent of its sales during the 2020 financial year from online, when shoppers stayed home since March due to the Covid-19 pandemic.

Founded in 1989, selling outdoor furniture at Parklea Markets in Sydney before opening its first store in 1991, Fantastic Furniture sources furniture from third party suppliers.

It was listed in 1999 before being purchased by Greenlit and delisted in 2016.

Storeman Ian Smith loads the new Fantastic store in Townsville with stock.

Bridget Carter 8.17am: Macquarie values HWL Ebsworth

DataRoom |

Analysts at Macquarie Capital believe law firm HWL Ebsworth is worth between $534.9m and $917m including debt.

This equates to between 7 and 12 times its earnings before interest, tax, depreciation and amortisation.

The company‘s forecasted earnings for the 2021 financial year is $76.4m. The research is being released ahead of plans by the company to list on the Australian Securities Exchange.

More to come

8.12am: ASX set for a fall

Australia’s share market is set to fall for the second day in a row, marking its first two-day fall in two weeks.

Overnight S&P/ASX 200 futures fell 0.6% to 6393 after bigger-than-expected falls on Wall Street overnight as the coronavirus pandemic worsened and vaccine euphoria faded.

The S&P 500 fell 1.4% - twice what was indicated by futures when the Australian market closed yesterday - while the Nasdaq lost 0.7%.

Value continued to underperform with the Russell 1000 Value index down 1.7% while the growth index fell 0.8% growth.

But the recent move to value is “different” and it’s “only a matter of timing before the street goes all-in on a massive buying splurge,” says Axi’s Stephen Innes.

Lower policy uncertainty under Biden and low rates in this scenario would point to more supportive valuations and the S&P 500 towards 3900 by year-end.

“Toss in a vaccine or three into the equation, and the negative from the current wave of COVID, no matter how bad this wave is, will eventually be overpowered by the positive of vaccine optimism because the recent surge is temporary.

In contrast, the end of COVID-19 will be permanent.”

8.11am: 3P gets new $200m offer

Education player 3P Learning is expected to jump after it received a $200m non-binding takeover indicative proposal on Thursday night from Indian-backed education company Think and Learn Private Ltd, which operates under the bank name BYJU. The takeover is pitched at $1.45 a share, compared to 3P Learnings’ Thursday close of $1.20 a share. The takeover offer would give 3P a valuation of $202m. The move comes as 3P Learning is target of a separate merger proposal from privately held IXL Australia. The IXL bid, by way of a scheme of arrangement, is pitched at $1.35 a share.

“The (BYJU) Indicative Proposal is subject to a number of conditions including completion of satisfactory confirmatory due diligence within a 4-week period, a unanimous recommendation from the 3PL Board and entry into a scheme implementation agreement,” 3P said.

“The Indicative Proposal was unsolicited and prior to receipt of the Indicative Proposal, 3PL had not engaged in any way with BYJU. The Board of 3PL will immediately review and assess the Indicative Proposal,” 3P said.

3P Learning chief executive Rebekah OÕFlaherty. Picture: Britta Campion

Bridget Carter 7.40am: Nuix finalises IPO terms

DataRoom | Forensic software company Nuix has finalised the terms for its initial public offering, with the company to raise $975.3m. Its market value will be $1.8117m and its enterprise value $1.7446bn.

Shares will be sold at $5.31 each. The price equates to nine times the company’s revenue on an enterprise value basis and 27.4 times it’s earnings before interest, tax,

depreciation and amortisation.

Read more: Nuix finalising $1.8bn IPO

7.10am: G20 mulls COVID debt framework

G20 nations are expected to agree Friday on a framework that should unlock restructuring of official debt of dozens of poor countries ravaged by the coronavirus pandemic, according to a French finance ministry source.

G20 nations last month agreed a six-month extension to a debt suspension initiative, but there have been growing calls to go further as spending needs to fight the pandemic and the economic crisis it has triggered mean many nations can no longer service their debts.

The wealthy countries’ club will agree Friday to study on a case-by-case basis requests to reschedule, reduce and even forgive debts, the French finance ministry source said.

“The framework that will be approved Friday by G20 finance ministers fixes the common principles for the 20 members of the Paris Club as well as five member countries of the G20: China, India, Saudi Arabia, South Africa and Turkey,” said the source.

Seventy-three countries are eligible to have their debt restructured, including 38 in sub-Saharan Africa.

“It is a historic deal because it is the first time that countries have agreed on a common framework” beyond the Paris Club, where China is not a member although Beijing “is by far the top lender” in the world, added the source.

The Paris Club unites industrial countries which had previously been the main countries to provide loans to developing nations.

But China has over the past two decades financed many projects in developing nations, including as part of its Belt and Road Initiative to build infrastructure to further expand trade.

The inclusion of China and other countries in debt reduction is important. For example, “before, the Paris Club would accord reductions while China or Saudi Arabia would continue to get paid or take as payment assets -- such as ports -- in exchange for settling the debt,” said the source.

Another advance is that the deal will compel private lenders to participate.

AFP

6.19am: BoC sees weak recovery

The Bank of Canada’s second-in-command says weak business investment will weigh heavily on the country’s economic recovery from the pandemic-induced downturn.

Senior Deputy Governor Carolyn Wilkins said in prepared remarks for a speech on Thursday that less demand and heightened uncertainty will make it harder for firms to invest and force some to close down completely. She said weaker capital accumulation was the biggest factor in the central bank’s decision to sharply lower its estimate of Canada’s potential output, or what the economy can produce if it’s operating at full capacity.

Slow productivity gains and a rise in the number of discouraged workers will also weigh on potential output, Ms. Wilkins said.

“This adds up to a situation where Canada is likely to exit the pandemic with a lower profile for potential output,” she said. “That means a significantly diminished ability to generate goods, services and incomes on a sustainable basis.” Ms. Wilkins said Canada should try to boost productivity, which has lagged in recent years, as a means for improving potential growth. She added Canada’s economic recovery is underway, but the pandemic is still in “full throttle,” leading to considerable challenges for policy makers.

Dow Jones

6.17am: US virus cases hit new record

New coronavirus cases in the U.S. climbed to another record, topping 100,000 for the ninth day in a row, as hospitals faced increasing numbers of Covid-19 patients.

The U.S. reported more than 144,000 new cases for Wednesday, up about 4,000 from the day before, according to data compiled by Johns Hopkins University. The total number of confirmed cases nationwide topped 10.4 million.

Coronavirus cases were on the rise across the country. Indiana’s single day number was above 5,000 for the first time, according to Johns Hopkins. Other states recording all-time highs included Illinois, North Carolina, Colorado, Kentucky, Arkansas, Idaho, New Mexico and West Virginia.

As the virus spreads, hospitals face a surge of Covid-19 patients. Hospitalizations due to the illness rose to a record 65,368 for Wednesday, according to the Covid Tracking Project.

Intensive-care units are also coming under pressure. As of Wednesday, there were 12,518 Covid-19 patients in ICUs, the highest number since May 5.The U.S. death toll approached 242,000 as nearly 2,000 new fatalities were reported--the most since May 6, according to Johns Hopkins.

Dow Jones

People wait in line to get tested for Covid-19 in Newark, New Jersey. Picture: AFP

6.07am: Virus fears hit US stocks

U.S. stocks fell Thursday amid a pickup in Covid-19 hospitalizations and renewed talks of lockdowns and restrictions to curb the virus’s spread.

Investors sold stocks across the board in afternoon trading, pushing major equity indexes further into the red. Banks and energy firms led the market lower, but all 11 major S&P 500 sectors were down in recent trading.

The S&P 500 was down 1.3%, while the Dow Jones Industrial Average shed roughly 387 points. The Nasdaq Composite was also below the flatline after tech stocks turned negative, dragging the benchmark down 0.7%.

The euphoria that had swept most stocks higher earlier this week after Pfizer and its German partner BioNTech said their Covid-19 vaccine was highly effective in combating the virus appeared to be fading.

The U.S. on Wednesday recorded its highest number of hospitalizations since the start of the pandemic and new cases have topped 100,000 for nine straight days. Although most health experts and even Wall Street agree a vaccine is likely the fastest path toward overcoming the pandemic, they have questioned when the vaccine may become available for widespread use.

Left with few options, lawmakers are again considering lockdowns and other restrictions to keep the virus in check, stirring some consternation among investors who worry that the curbs will hobble the economy. New York Gov. Andrew Cuomo on Wednesday said most bars, restaurants and gyms would have to close at 10 p.m. and cautioned that rising infection levels may prompt more restrictions.

Dow Jones

5.45am: Xi pulled Ant IPO

Chinese President Xi Jinping personally made the decision to halt the initial public offering of Ant Group, which would have been the world’s biggest, after controlling shareholder Jack Ma infuriated government leaders, according to Chinese officials with knowledge of the matter.

The rebuke was the culmination of years of tense relations between China’s most celebrated entrepreneur and a government uneasy about his influence and the rapid growth of the digital-payments behemoth he controlled.

Mr. Xi, for his part, has displayed a diminishing tolerance for big private businesses that have amassed capital and influence – and are perceived to have challenged both his rule and the stability craved by factions in the country’s newly assertive Communist Party.

In a speech on Oct. 24, days before the financial-technology giant was set to go public, Mr. Ma cited Mr. Xi’s words in what top government officials saw as an effort to burnish his own image and tarnish that of regulators, these people said.

At the event in Shanghai, Mr. Ma, the country’s richest man, quoted Mr. Xi saying, “Success does not have to come from me.” As a result, the tech executive said, he wanted to help solve China’s financial problems through innovation. Mr. Ma bluntly criticised the government’s increasingly tight financial regulation for holding back technology development, part of a long-running battle between Ant and its overseers.

Mr. Xi, who read government reports about the speech, and other senior leaders were furious, according to the officials familiar with the decision-making. Mr. Xi ordered Chinese regulators to investigate and all but shut down Ant’s initial public offering, the officials said, setting in motion a series of events that led to the deal’s suspension on Nov. 3. Investors around the world already had committed to paying more than $34 billion for Ant’s shares. It isn’t clear whether it was Mr. Xi or another government official who first suggested the shutdown.

Read more: China’s President Xi Jinping pulled plug on Jack Ma’s Ant IPO

Dow Jones

Xi Jing Ping ands Jack Ma hated one another.

5.32am: France outbreak worsens

The number of people in hospital care for COVID-19 in France is now higher than previous peaks in April, Prime Minister Jean Castex said on Thursday.

There were now more than 32,000 Covid patients in hospitals, he told a news briefing, adding that a new Covid case was admitted to hospital every 30 seconds and one into intensive care every three minutes.

AFP

5.20am: Big fall in US jobless benefits

New applications for US jobless benefits plunged by 48,000 last week, a far bigger drop than analysts were expecting, taking the level down to 709,000, the Labor Department reported Thursday.

That decline pushed the weekly level to its lowest point since mid-March, at the start of the pandemic, and took the four-week average through November 7 down to 755,250, seasonally adjusted, a drop of 33,250 from the prior week, according to the data.

Economists have been warning that recent improvements in labor markets could stall amid rising Covid-19 cases and the fallout from the pain inflicted by the pandemic, which has led to tens of thousands of layoffs by corporations, including airlines, as well as shutdowns of smaller businesses unable to survive any longer.

But the improvement was more than four times the decline analysts projected, though it occurred during the week of the fraught US presidential elections marked by the days-long vote counts.

Nancy Vanden Houten of Oxford Economics warned that the “positive trend continues to be partly offset by the rise in the number of unemployed individuals who have exhausted those benefits, evidence of more long-lasting labor market scarring.” The data still paint a fairly grim picture of the jobs outlook, as the weekly total was more than three times higher than the same week of 2019.

There were still nearly 300,000 people receiving benefits last week under the special program offered during the pandemic to workers who otherwise would not qualify for help.

Through October 24, more than 21 million people were still receiving some form of unemployment benefit, and many of those are special programs that are set to expire.

AFP

5.18am: Britain rebounds in Q3

Britain’s economy enjoyed a record third-quarter rebound from its deepest ever recession, data showed Thursday, but experts predict another slump after fresh coronavirus restrictions were introduced to curb the pandemic.

Gross domestic product (GDP) expanded by 15.5 percent in the July-September period, after an initial coronavirus lockdown was eased, the Office for National Statistics said in a statement.

Activity bounced back after shrinking by almost a fifth in the second quarter on the back of the first lockdown.

But the economy is still grappling with the virus fallout, according to the data, which was published one day after Britain’s Covid-19 death toll passed the grim milestone of 50,000 -- the highest in Europe.

Growth slowed in September with a month-on-month expansion of just 1.1 percent, after the end of the government’s restaurant discount scheme for the devastated hospitality sector.

Output was also hit after more localised measures to control the virus were imposed in parts of northern and central England, as well as in Scotland and Wales.

- Fourth-quarter gloom -

England-wide restrictions, which began last week, are set to spark another slump in the current fourth quarter or three months to December, analysts warn.

“There seems little doubt that a renewed national lockdown will cause the economy to contract again in the fourth quarter,” said EY economist Howard Archer, who is forecasting a 4.0-percent drop.

The impact is however far less severe because the new measures “are less restrictive than those introduced in March”, he noted.

AFP