Local market dips as ASX reports surge in capital raisings
A late rally had the ASX within an inch of positive ground, but drag from the major banks and miners ultimately pulled the index lower.
- Bank pullback cements ASX loss
- Mesoblast outperforms on drug trial
- ASIC’s warning for retail investors
- ASX capital raisings soar 185pc
- JB Hi-Fi: still no guidance
That’s all from the Trading Day blog for Wednesday, May 6. The ASX came back from losses as much as 1.1pc to finish lower by 0.4pc despite a pick up on world markets overnight on optimism about the easing of restrictions on economic activity.
The latest data from the ABS showed a jump in retail sales thanks to panic buying, a sentiment shared by retailer JB Hi-Fi who reported a sales surge for March. Elsewhere, the market operator said capital raising activity was 185pc higher last month than the same period last year, and ASIC has warned against high risk trading by retail investors.
Nick Evans 8.43pm: Rio backs green stimulus call
Rio Tinto chairman Simon Thompson has backed calls for a “massive” wave of green energy-focused stimulus measures to help global economies out of the coronavirus crisis.
The move comes as the company prepares to face down environmental activist groups at its Australian shareholder meeting on Thursday.
On Wednesday, Mr Thompson put his signature to a call for green energy-focused investment from the Energy Transitions Commission, a coalition of 40 global businesses including energy majors such as BP and Shell.
Glenda Korporaal 8.35pm: Rio backs green stimulus call
New equity raisings on the ASX from existing companies almost tripled to $13.3bn in April compared with the same time last year, as companies rushed to raise capital on fears of the impact of the COVID-19 crisis, according to figures released on Wednesday.
But ASX Ltd’s executive general manager of listings and issuer services, Max Cunningham, said the rush for new secondary capital raisings had slowed recently, as initial liquidity fears “abated somewhat” as the federal government outlined its plans to start reopening the economy.
The ASX has seen 130 new secondary equity raisings since mid-March, with eight deals raising more than $1bn.
Gerard Cockburn 8.13pm: Big W leads charge on open hours
Big W will be one of the first department stores to relax COVID-19 restrictions, signalling that a return to life after the lockdown could be on the horizon.
The discount retailer will extend trading hours to 9pm for one day a week, with its national store network opting to stay open later on the traditional late night shopping day of Thursday or Friday depending on the states.
The move comes just before an expected Mother’s Day sales lift, but Big W says the decision has been driven by customers wanting more flexible shopping times.
Big W commercial general manager Teresa Rendo said the Woolworths-owned retail chain has had a recent surge in sales and patron numbers, resulting in a need to extend trading hours to maintain ongoing social distancing rules. “What we have decided to this week is review our late-night trading hours for one weekday evening … and the reason we have done that is to give Australian shoppers more flexibility,” Ms Rendo told The Australian.
Its decision coincides with federal and state governments seeking to ease current restrictions, which could see a broader reopening of the retail sector.
Jared Lynch 7.50pm: ALS testing labs stands down 2300
Analytical testing company ALS is standing down more than 2300 workers as it moves to sandbag its balance sheet from the coronavirus and while it recovers from a coal-tainting scandal.
The company issued a statement to the ASX on Wednesday stating it had extended its bank debt facilities to navigate the COVID-19 pandemic. It now has liquidity of more than $650m, which it described as a “prudent buffer”.
“The balance sheet remains strong with the FY20 year-end leverage ratio expected to be broadly in line with previous reporting periods and well within existing debt covenants,” chief executive Raj Naran said.
ALS specialises in sampling, preparation and analysis of coal and coal-products such as anthracite and coke. Last month it was embroiled in a scandal involving staff issuing fake coal analysis certificates.
Glenda Korporaal 7.17pm: ‘No bailout on Chinese trade’
Businesses hit by a downturn in trade with China should not expect to be bailed out by the federal government, a new report to be released on Thursday by the Australia China Relations Institute (ACRI) warns.
“Australian companies with business models geared towards China need to understand that it is not the government’s responsibility to bail them out in the event of a downturn in the China market,” it says.
“To do so would lead to a moral hazard problem where businesses do not need to account fully for the risks they face.”
But the new report by the institute also warns the government against taking deliberate measures to force companies to cut back business with China.
James Kirby 7.05pm: Retail investors join the rollercoaster
The market regulator has taken the unusual step of warning investors to be careful trying to make “quick profits” from our rollercoaster stockmarkets.
But investors can’t be blamed for getting excited by the prospects constantly opening up on the ASX as Wall Street moves broadly higher.
The month of April saw the ASX lift 8.8 per cent, the biggest monthly jump in more than 20 years.
Who is to say May will not offer similar returns?
James Glynn 6.46pm: ATO tapped for more virus details
The slump in Australia’s economic growth due to COVID-19 has stunned forecasters, sparking calls for fresh data to better gauge the plunge in output amid a highly uncertain outlook.
The Reserve Bank estimates the economy will shrink by 10 per cent in the first half of 2020, with the unemployment rate doubling to 10 per cent. But the central bank has also admitted that the degree of uncertainty around the future has rarely been as high.
The Australian Bureau of Statistics has responded quickly to the need for more clarity on the economy by tapping the tax office for more real-time data on wages and payrolls, while also pushing banks for access to their vast stores of internal transactions data.
The Wall Street Journal
Mackenzie Scott 6.06pm: Commercial property sentiment ‘largely unscathed’
The early onset of coronavirus in Australia left commercial property sentiment largely unscathed through the first quarter, with only the hotel sector fielding a mass hit to confidence, according to NAB’s latest Commercial Property Survey.
Completed between late-February and late-March, the survey accounted for the closure of the international borders but predated the impact to the economy and business confidence brought about by stage three social distancing measures.
Sentiment towards the CBD hotel market plunged by 55 points in the first quarter to fall 38 points below the long term average. All other sectors held steady, with the office sector down 3 points and industrial property down 7 points, though both remained positive. Confidence in retail fell 2 points, but does not account for the shutdown of many physical retail stores through April.
5.35pm: Pretax loss for former NAB UK bank
The former National Australia Bank-owned UK bank which is now called Virgin Money UK on Wednesday reported a swing to pretax loss for the first half of fiscal 2020 and said that it had total impairment charges of £232m ($448m) mainly due to the coronavirus pandemic, among other reasons.
The UK-based financial services company, which still counts a large number of Australian shareholders, made a pretax loss for the six months ended March 31 of £7m compared with a pretax profit of £42m for the same period a year earlier, while its underlying pretax profit fell to £120m from £286m.
Regarding its impairments provisions, the company said £164m of the total charge was linked to the pandemic.
“While the outlook remains very uncertain and the range of potential outcomes is wide, Virgin Money enters this period of turbulence from a position of strength,” chief executive David Duffy said. The company has paused a program of branch closures and redundancies amid the pandemic so that cost savings will be lower in 2020, Mr Duffy said.
NAB spun off Clydesdale and Yorkshire bank in 2016 which later merged with Virgin Money in the UK.
Sarah Elks 5.21pm: Explosion stops work at Grosvenor coal mine
Five workers have been seriously injured after an explosion at Anglo American’s Grosvenor coal mine in Moranbah, in central Queensland, on Wednesday.
The workers have been taken to hospital.
Queensland’s resources sector has experienced a horror spate of deaths, with eight workers dying within 18 months in the state’s coal mines and quarries.
“Anglo American confirms that an incident at Grosvenor Mine has occurred this afternoon,” an Anglo spokeswoman said.
“Five people have been injured and transported to hospital. All of the injured people’s families have been contacted.”
“All remaining on-site personnel have been accounted for. The mine is in the process of being evacuated and operations stopped. Emergency response is currently underway.”
“The mines inspectorate has been contacted and Anglo American is working to ensure the injured people have the best available medical care.”
4.55pm: ANZ tips house prices to drop 10pc
Coronavirus has destroyed any hope of a housing market recovery this year, with prices and construction levels to fall well into 2021, according to ANZ.
The bank says sharp declines in income related to coronavirus and shutdown measures will drive house prices lower by 10pc to backtrack after a rise from mid-2019.
“Already, nearly a third of Australian households have reported a deterioration in their finances due to COVID-19. This collapse in income will create significant uncertainty for households and leave many unwilling to commit to buying or building a home,” senior economist Felicity Emmett writes.
She adds that reduced population growth, especially in Sydney and Melbourne, will also constrain demand but investor demand will be hit hardest.
“With the rental market under pressure from both reduced demand and increased supply, the incentive to invest in property will be low.”
COVID-19 derails the housing recovery. We now expect house prices to fall 10% on average across the capital cities over the next year or so #ausecon @felicity_emmett @adelaide_t pic.twitter.com/FqO5tunrFV
— ANZ_Research (@ANZ_Research) May 6, 2020
Bridget Carter 4.49pm: Abacus left out of National Storage raise
DataRoom | Abacus Property Group is understood to have been left out in the cold for the National Storage REIT equity raising.
The Australian listed property group has a 4.9 per cent interest in National Storage REIT, which was recently acquired by Abacus, itself a manager of storage assets.
It is thought that Abacus secured the shares in National Storage so that it would have a seat at the table should it once again become a takeover target.
But it is understood that while other institutional investors were offered stock after National Storage launched a $300m placement, Abacus was given a wide berth.
Part of the problem is thought to be fears of the group amassing a larger interest and asserting more influence should a suitor vie for the business.
4.39pm: Retail names mixed despite data boost
Retail sales for March was a key focus in Wednesday’s session as it printed slightly higher than expected with a record surge in food retailing thanks to stockpiling ahead of the coronavirus and higher food prices.
Electronics retailer JB Hi-Fi echoed the data from the ABS, reporting a sales surge in March as workers equipped themselves to work from home. Still, JB Hi-Fi skipped on providing any guidance but its shares added 3.4 per cent to $35.10.
Elsewhere in the retail space, Premier Investments fell by 1.5 per cent to $15.14, Myer slipped by 2.6 per cent but Kathmandu jumped by 10.2 per cent to 86.5c after yesterday announcing it was reopening some of its stores.
Shopping centre owner Vicinity warned the retail environment would be tough for the next 12 months. Its shares gave up 1.4 per cent to $1.37.
Fellow mall owner Scentre slipped by 2.3 per cent to $2.13 while Mirvac gave up 1.4 per cent to $2.18 and Stockland lost 1.1 per cent to $2.67.
Here’s the biggest movers at the close:
4.12pm: Bank pullback cements ASX loss
A late sprint higher put the local market within an inch of a daily gain, but shares ultimately succumbed to the negative momentum, pulling lower by 0.4 per cent.
Local weakness was despite a lift on Wall Street overnight, where investors focused on the easing of government isolation restrictions, and businesses returning to trade.
The benchmark ASX200 fell early in the session, hitting losses as much as 1.1 per cent but clawed back some ground to finish the day down 23 points or 0.42 per cent at 5384.6.
3.45pm: ASX in final sprint to flat finish
The local market is making a late dash higher – trimming losses to just 3 points ahead of the close.
At its worst, the market was down by 1.1pc, but now is lower by just 0.1pc.
Reversal in energy and consumer discretionary stocks is key in the uptick.
ASX200 last at 5401.6.
3.39pm: Oil prices build on Tuesday’s surge
Oil prices on Wednesday built on the previous day’s surge, boosted by signs of easing in the coronavirus that is allowing some countries to begin opening their economies, though traders are keeping an eye on brewing China-US tensions.
International benchmark Brent gained 0.45 per cent to $US31.11 a barrel, reversing early losses, having surged 14 per cent above $US30 on Tuesday for the first time since mid-April.
US marker West Texas Intermediate climbed 1.1 per cent to $US24.18 a barrel, after rising 20 per cent the previous day.
AFP
Gerard Cockburn 3.27pm: Macquarie to eke FY20 profit lift: BP
Bell Potter is tipping Macquarie Group’s full year results to be spared the financial woes caused by coronavirus, but flagged the pandemic could throw a curveball in the coming financial year.
Ahead of the release of the bank’s results on Friday, Bell Potter forecasts statutory net profit to eclipse its 2019 result by $7m, to a total NPAT figure of $2.99bn.
Bell Potter analyst, TS Lim says favourable forex movements and a satisfactory third quarter caused by strong annuity-style performance prompted the slight profit growth expectation.
However, he notes the guidance outlook is likely to see a shift in sentiment, with a profit hit from COVID-19 likely to be incurred in the next financial period.
“Financial year 2021 will obviously be more difficult and we expect Macquarie Group on result day to revert to crisis terminology such as ‘Challenging to repeat FY20 performance’,” Mr Lim said.
Bell Potter has reduced its 12-month target price for the group’s stock from $146 to $128 per share, but has retained a Buy rating.
Macquarie Group’s asset management and capital businesses are expected to feel the most impact from the economic downturn, while lower net interest income and reduced investment banking fees will likely drag down its liquidity position.
MQG last traded down 0.8pc to $99.41.
Bridget Carter 3.24pm: UK fund drops from Healius race
DataRoom | British private equity fund Permira is understood to have bowed out of the competition to buy the Healius medical centres, which is up for sale through investment banks Morgan Stanley and UBS.
Permira was exploring an acquisition of the business along with BGH Capital, while DataRoom now understands that Brookfield was weighing an acquisition of the business as of about two weeks ago.
Earlier, expectations were that the division could sell for about $500m.
Working as adviser for BGH is understood to be Macquarie Capital, but it remains unclear if it continues to pursue an acquisition, with the Australian private equity firm pursuing the collapsed airline Virgin Australia, while it also made a takeover bid for Village Roadshow at the beginning of the year.
Read more: Permira just what the doctor ordered
3.13pm: Don’t rule out AMP equity raise: CS
Credit Suisse analysts have flagged the risk of a credit raise from AMP alongside potential for its AMP Life to be held up by the regulators.
In a note to clients, Credit Suisse points out that the Life sale deadline of June 30 is approaching, and bandwidth of the regulator could be limited due to COVID-19.
“Arguably AMP can still transfer the Wealth Management business out of Life by this date and the deal doesn’t necessarily fall over, however may proceed on changed terms, potentially lower sale price,” analysts say.
They speculate that if the sale goes ahead, $1.2bn of capital could be returned to shareholders – but regardless a raising could not be ruled out.
“ … With ongoing investment market volatility impacting both earnings and capital, it may be prudent for AMP to raise $200m to $500m in equity, 5-10pc dilutive.”
The broker keeps AMP at Outperform, noting its 20pc P/E discount to the market on base earnings.
AMP last down 0.7pc at $1.39.
2.54pm: Mesoblast outperforms on drug trial
Shares in stem cell-focused Mesoblast have surged by more than 13 per cent after the first patients were dosed in a phase 2 trial to treat ventilated COVID-19 patients in the US.
Researchers have given the drug Remestemcel-L to the first of 300 COVID-19 patients with moderate to severe acute respiratory distress syndrome (ARDS) on ventilator support.
Shares in Mesoblast were trading higher by 11.4 per cent to $3.67 in afternoon trade – after a 75 per cent surge already this year.
Last month, the company claimed a breakthrough in its experimental therapy, said to have increased survival rates at one New York hospital while this trial will see the treatment scope extended across 30 sites.
“This rapid mobilisation of major medical centres across the United States reflects the urgent need to treat the very large numbers of people in hospital intensive care units suffering with COVID-19 ARDS and requiring ventilation. We expect quick enrolment in this trial to determine whether remestemcel-L can reduce mortality in these patients,” overseeing doctor Alan Moskowitz said in a statement.
Read more: Mesoblast claims coronavirus breakthrough
Bridget Carter 2.48pm: Downer laundries sale close
DataRoom | Downer is believed to be getting closer to selling the Spotless Laundries business, with a party – thought to be a private equity firm – closing in.
Earlier, the competition had narrowed to Anchorage Capital Partners, Adamantem Capital and global competitor Alsco.
However, Anchorage Capital Partners is understood to be now out of the contest, and sources say that it is believed a private equity group remains in final talks. This would suggest that Adamantem Capital is nearing a deal to buy the operation.
In its presentation for the Macquarie Australia Conference, Downer had said that the sales process for the business was progressing, while the sale of its mining services division through Macquarie Capital remained on hold.
DOW last traded down 1.7pc to $4.01.
Read more: Private equity ‘in the mix’ for Spotless Laundries
Ben Wilmot 2.33pm: Office tower owners face rent squeeze
Rents in office towers could plunge by up to a quarter if the commercial property market follows the pattern of previous recessions, a new analysis by Macquarie Equities has warned.
Property players had hoped that the fall out from the coronavirus could be contained to shopping malls but office landlords are also being buffeted.
Sector giant Dexus on Tuesday warned of tough conditions and The Australian has been told by commercial agencies that manage mid-size buildings that 65-75 per cent of tenants are asking for relief.
Listed trusts focus on larger towers, which often have anchor tenants that are unlikely to ask for rent cuts, whereas mid-size buildings have a wide range of small tenants, some of whom are either cutting space or moving out.
Macquarie said if global GDP growth falls by a forecast 8 per cent the domestic unemployment shock would be greater than in the GFC but should return to about 6 per cent within two years.
“When compared to other cycles, a positive is the extent of monetary and fiscal policy support which should be a partial offset for office markets,” Macquarie said.
Eli Greenblat 2.19pm: US firms join action against Treasury
A swarm of high powered US law firms are considering joining in on the feeding frenzy against Australian winemaker Treasury Wine Estates, with three US-based firms overnight calling for aggrieved Treasury Wine investors to contact them for the building of a possible shareholder class action against the company.
New York-based The Rosen Law Firm was the first to launch investigations over allegations Treasury Wine did not fully disclose its financial position to shareholders, especially as it related to issues plaguing its crucial Americas division.
Now, a Californian law firm called The Law Offices of Frank R Kruz, Howard G Smith of Pennsylvania and LA firm Schall Law have begun spruiking for shareholders to launch a further possible class action lawsuit.
All four US law firms are investigating claims on behalf of investors of Treasury Wine for what they state are violations of the securities laws.
Treasury Wine has stock traded on the OTC market in the US.
Read more: NY law firm eyes Treasury Wine class action
2.13pm: Iron ore pullback ahead: Citi
Recent strength in iron ore is set to fade in coming weeks, with spot prices set to fall to $US70 per tonne, according to Citi.
In a note, analysts led by Tracy Liao says a sell-off is likely this month as seasonal weakness in China steel demand sends prices lower and as seaborne supply is expected to recover.
She forecasts a surplus of more than 80 million tonnes in the second half, after a 17 million tonne deficit last half, “suggesting ample downside to the current $US80/t spot price”.
“The iron ore sell-off we have been forecasting has taken longer than anticipated owing mainly to lower-than-expected Brazilian supply so far this year. An iron ore sell-off will likely happen in May when sequential Chinese steel demand weakness is likely going to send steel
prices lower and take iron ore with it,” she writes.
2.01pm: Retail to provide little GDP boost: NAB
The March retail sales boost will do little to offset a collapse in spending elsewhere in the economy, according to NAB.
Economist Kaixin Owyong writes that the 0.7pc rise in real retail sales for the first quarter will contribute 0.1pp to first quarter GDP growth, but will be cold comfort as services spend, new car sales plummet.
“NAB forecasts Q1 GDP contracted 0.3pc ahead of a sharp 7pc fall in Q2,” she writes.
“Retail sales should rebound over the coming months with National Cabinet announcing detail on some relaxation of health restrictions on Friday, although the rebound will be restrained by massive job losses to date and the fact that the states and territories will relax measures according to their own timetable.”
Read more: Stockpiling rolls out the records
Aust Mar retail sales +8.5%mom driven by panic buying
— Shane Oliver (@ShaneOliverAMP) May 6, 2020
Food +24%mom & hhold goods +9%
But clothing -23%, dept stores -9%, cafes -23%
Mar qtr real retail sales just +0.7% (food prices up) so we still expect Q1 GDP to be negative
Expect a record fall in Apr retail sales#ausecon pic.twitter.com/jDdkoLMWTc
1.42pm: Bingo warns of Q4 revenue hit
Waste collector Bingo Industries says its third quarter performance was on track but a slow down in collections from hospitality groups and commercial offices will dent revenue in the quarter ahead.
In a presentation to the Macquarie conference, Bingo said approximately 40pc of its commercial and industrial revenue had been impacted by COVID-19 restrictions, but that a steep rebound was expected post-lifting of restrictions.
The group reassured investors its focus was heavily weighted toward post collections infrastructure and likely to benefit from fast tracked fiscal stimulus on infrastructure projects.
Still, the company said it was reducing capex and opex, including a 20pc reduction in corporate overhead costs.
“BINGO has invested significantly in its post-collections network of infrastructure assets and prior to COVID-19 expected above trend growth to continue into FY21 and beyond,” it said.
BIN last traded down 4.7pc to $2.19.
Gerard Cockburn 1.26pm: Flight Centre still a market leader: BP
Bell Potter is remaining positive on embattled travel group Flight Centre, saying it is likely to retain its market leading position once travel restrictions are lifted.
The brokerage has set a buy rating for FLT stock following the release of its trading update yesterday where it said it was reducing monthly operating cash costs to $65m from $227m.
Bell Potter retains a 12-month target price for FLT shares at $11.50 each. Its shares last traded down 2.74 per cent at $9.77.
“Our positive view on FLT is driven by the positive leverage FLT has to a rebound in travel bookings post COVID-19,” analyst Alex McLean writes.
“Despite short-term headwinds, we believe FLT is well placed to maintain its position of market leadership post crisis due to its strong supplier relationships, rich brand equity and long track record of growth.”
Bell Potter noted updated refunds and cancellation fee policies enacted by the company will be favourable in the eyes of consumers.
Read more: Flight Centre looks past the gloom
1.01pm: Shares bounce from daily lows
Shares are holding lower in lunch trade, even as energy stocks give up early gains.
At 1pm, the ASX200 is off by 36 points or 0.7 per cent to 5371.4 – after bouncing from lows of 5345.
Drag from financials continues to be the major contributor, though property stocks too are taking a hit.
National Storage is the worst performer – off by 6 per cent after completing a $300m placement to shore up its balance sheet.
Here’s the biggest movers at 1pm:
Gerard Cockburn 12.37pm: ALS developing COVID detecting kit
ALS Laboratories says it is in the final stages of developing its COVID-19 detecting kits, despite deferring planned capital expenditure and furloughing more than 15 per cent of its workforce.
In a filing to the ASX on Wednesday, the life science company indicated the development of its real-time polymerase chain reaction (PCR) coronavirus testing kits are in final stages of development.
ALS said testing currently relies on medical professionals collecting samples which have an approximate five hour turnaround time to determine if someone has contracted the disease, but it aims to get results in real-time.
While the company continues to assist in fighting the disease, it has taken financial measures to ease the pressure placed upon its capital position.
In the past month, 15 per cent of workers have been stood down, with the company also implementing salary and hiring freezes and suspending non-essential capital expenditure for the coming 2021 financial year.
ALQ last traded up 0.1pc at $6.81.
12.16pm: Bubs lifts on Coles supply deal
Goat milk maker Bubs has jumped by more than 8 per cent on Wednesday after announcing a new supply agreement with supermarket giant Coles.
The group’s organic “super premium” infant formula will be stocked in 482 Coles supermarkets from June, in addition to its goat milk formula and toddler snacks already stocked by the chain.
This deal, along with supply to Baby Bunting stores, are expected to “materially add to the company’s domestic revenues from Q4 FY20, with all opening orders to be dispatched in May”.
Chief Kristy Carr said the extension of the company’s range to organic cow’s milk was a key growth strategy.
BUB last traded up 8.4pc to 96.5c.
11.57am: Qantas cash burn needs to halve: Citi
Qantas weekly cash burn need to be halved by a further 50 per cent to reach its $40m goals, according to analysis from Citi.
The airline yesterday said it was targeting cash burn of $40m a week by the end of June as it navigates the coronavirus crisis, and said it had boosted liquidity with a loan of $550m against three of its Boeing 787-9s.
Citi’s Jakon Cakarnis says he calculates the group’s current burn rate at closer to $90m to $100m after a number of one-off items – with a reduction required of about 50pc.
“While Qantas’ Market Update provided a number of positives around the company’s liquidity position, the earnings outlook remains considerably uncertain,” Mr Cakarnis writes.
“In order to be more positive on the outlook Qantas we would need to see: i) the delivery of Qantas’ cash burn aspirations; ii) the resumption of flights in some capacity; and iii) a recovery in domestic business conditions and household income.”
Citi has a buy rating on the stock with a price target of $3.70.
QAN last down 2.5pc to $3.53.
Read more: Qantas burns $40m a week, boosts liquidity
11.39am: March retail trade rises 8.5pc
Retail turnover rose by 8.5 per cent in March, following a rise of 0.6pc in February, thanks in most part to unprecedented grocery demand ahead of the coronavirus lockdown.
In a release this morning, the ABS said food retailing was up by 24.1pc for the month, alongside a 16.6pc jump in other retailing and 9.1pc lift in household goods retailing.
Still, those gains were offset by a fall in restaurant and cafe spend – down 22.9 per cent – and clothing spend which dropped by 22.6pc.
“The March month saw both the strongest rise in food retailing, and the strongest fall in cafes, restaurants and takeaway food services, that we have seen in the history of the series,” director of quarterly economy surveys Ben James said.
AUDUSD is popping higher – last at US64.31c.
Retail sales rose by a record 8.5% in March - slightly higher than the 8.2% estimate in the preliminary release - surpassing the GST-related rise in June 2000 #ausbiz pic.twitter.com/RVoU6MhSK3
— Callam Pickering (@CallamPickering) May 6, 2020
11.29am: ASIC’s warning for retail investors
Securities regulator ASIC has issued a warning to retail investors about high-risk trading strategies in the current environment including moving into speculative stocks, day trading and contracts for difference.
Indeed, ASIC says retail losses for CFDs were $234m across one week in March just using a sample of 12 CFD providers.
The comments come amid a period of extreme market volatility from the end of February as COVID-19 hammers the outlook for the global economy.
“Retail investors chasing quick profits by playing the market over the short term have traditionally performed poorly – in good times and bad – even in relatively stable, less volatile market conditions,” ASIC said in an analysis of losses.
An ASIC analysis of markets during the COVID-19 period revealed a substantial increase in retail activity across the securities market, as well as greater exposure to risk, ASIC said.
Among findings:
- Some retail investors were engaging in short term trading strategies unsuccessfully attempting to time price trends.
- There was a “concerning increase” in short-term and “day-trading” activity.
- During the analysis period, on more than two thirds of the days on which retail investors were net buyers, their share prices declined the following day. On days where retail investors were net sellers, their share prices more likely increased the next day.
In addition to the increased trading, there was a sharp increase in the number of new retail investors to the market – up by a factor of 3.4 times – as well as a marked increase in the number of reactivated dormant accounts as they rushed back into the market.
ASIC analysis of markets during the COVID-19 period has revealed a substantial increase in retail activity across the securities market, as well as greater exposure to risk. https://t.co/zQ2sKQiIGR pic.twitter.com/UdspXkuilc
— ASIC Media (@asicmedia) May 5, 2020
11.23am: ASX slips further in line with US futures
The local market is tracking a further decline in US futures – extending its losses to 0.9 per cent in the second hour of trade.
S&P futures had been trading positive to start the session, but have slowly slipped – last down 0.4pc after a 0.9pc gain overnight.
Locally, the major banks and miners are the biggest contributors to the weakness – Westpac is trading down 2pc and NAB by 2.8pc while buy now, pay later group Zip Money is a surprise outperformer with a 10pc jump.
11.10am: Myer class action dropped
A class action against department store Myer alleging misleading and deceptive conducts has been thrown out in a mutual agreement by both parties involved.
The chain had been defending an action brought by TPT Patrol as a trustee for the Amies Superannuation Fund in 2016 relating to shares bought on or after September 11, 2014 and March 19, 2015.
“Myer is pleased to announce that Myer and TPT Patrol have agreed that the proceeding be dismissed with each party bearing their own costs of the proceeding. The Federal Court has made orders to the above effect,” the company said this morning.
Read more: Myer sued over profit guidance
11.03am: Medibank loses 1pc of customers
Health insurer Medibank Private says a slightly more than 1 per cent of customers have suspended policies as a result of the COVID-19 pandemic, and it expects them to return.
Medibank provided the figure in a trading update amid a slumping economy and widespread job losses from the restrictions on movement aimed at slowing the spread of the coronavirus.
Many customers have deserted private health insurance providers in recent years due to what they claim are excessive costs.
Only 44.1 per cent of Australians have hospital cover, the lowest level since 2007, the Australian Prudential Regulation Authority says.
MPL last traded up 2.6pc to $2.73.
AAP
Leo Shanahan 10.44am: Foxtel to stream HBO content
Foxtel and WarnerMedia have signed a new multi-year content agreement for HBO and Warner Bros content in a big win for the Australian subscription television provider.
The new deal will cover programming from the Warner Bros, HBO, HBO Max and WarnerMedia networks for programs such as Game of Thrones, Succession, Big Little Lies.
Foxtel’s deal is a win for the subscription television service which maintained rights to the valued HBO content ahead of local rival Stan who had also been bidding for the content rights with the current deal due to run out in 2022.
It also means Foxtel (majority owned by News Corp publisher of The Australian) will maintain Australian rights to Warner Bros and HBO content rather than HBO Max going it alone through the US network’s own streaming service set to launch in the United States at the end of May.
Read more: Foxtel clinches HBO content deal
10.15am: Shares slip as heavyweights drag
Australian shares have bucked the overseas optimism of easing virus restrictions, slipping lower in opening trade thanks to drag from the major banks.
In early trade, the ASX200 is lower by 25 points or 0.47 per cent to 5381.8 – giving back some of the previous two-day rally. It comes as US futures slip into negative trade.
Energy stocks are outperforming – up by 1.1 per cent as US oil futures gain ground.
Gerard Cockburn 10.01am: Capital raisings soar 185pc for April
Capital raisings soared by 185 per cent in April, as public companies attempted to bolster their balance sheets against any hit from the coronavirus downturn.
The local exchange today reported its activity for the past month, showing $13.8bn was raised in April – largely in secondary capital raisings which totalled $13.67bn, a 275 per cent surge on the previous year.
That’s no surprise considering the month included NAB’s $3.5bn raise, Ramsay’s $1.4bn raise and Lendlease’s $1.15bn raise.
But the volatility has been bad news for initial public offerings, they fell by 92 per cent over the period, with only $97m of primary capital added.
The share market saw five companies delist over April. Total ASX entity listings stand at 2208, a decline of 3 per cent compared the same period in 2019.
But the wild market ructions have provided a boost to trading activity, with average daily trades up by 27 per cent compared to the same period last year – and value of trades at $6.8bn up 57pc.
Eli Greenblat 9.55am: Myer starts staggered reopening
There are further signs of retailers coming back to life with the nation’s biggest department store Myer announcing the planned reopening of five Queensland stores (Chermside, Carindale, North Lakes, Townsville and Toowoomba) from this Friday, which is in line with the easing of stay at home measures by the Queensland Government.
Myer said stores in other states will remain closed, but it will closely monitor government measures and advice, including that of National Cabinet, with a view to progressively reopening remaining stores.
It said the reopening of stores will occur on a staged basis, taking into account government measures and conditions across the different states, particularly in relation to the easing of restrictions.
A Myer spokesman said: “Our priority continues to be the health and wellbeing of our customers and team members and to assist and support governments in limiting the spread of COVID-19.
“In line with the easing of restrictions in Queensland, we look forward to trialling the opening of five Queensland stores, providing our customers with great brands at great value, in a safe shopping environment.”
9.38am: ASX likely steady as economies reopen
Shares are set for a steady open after a lift on global markets overnight on reports of more countries and companies winding back containment measures and reopening.
Starbucks move to reopen 85 per cent of its stores by the end of the week was well received in particular, giving hope that the worst of the economic trough may be over.
US non-manufacturing ISM data came in slightly better than expected but did little to jolt the US rally, similar to the lack of movement locally after the RBA kept its policy settings steady and broadening its eligible collateral to include investment grade corporate bonds.
Australian retail sales are to be released later today, though previous flash measures provided by the ABS mean the data will provide little surprise.
ASX last at 5407.1.
9.28am: What’s on the broker radar?
- Charter Hall Social Infrastructure raised to Buy – Canaccord
- Collins Foods raised to Buy – UBS
- James Hardie GDRs cut to Underperform – Jefferies
- NRW Holdings cut to Market-weight – Jefferies
- Orica raised to Buy – Citi
- Qantas raised to Positive – Evans and Partners
9.19am: National Storage completes $300m placement
National Storage will this morning return to trade after completing a $300m placement.
In a statement, the storage group said funds would be used to “replenish investment capacity and provide additional funding flexibility for continued growth”.
Shares were offered at $1.57 apiece, representing a 7.1pc discount to the stock’s last closing price of $1.69.
According to The Australian’s DataRoom, private equity groups Blackstone and Warburg Pincus had offered to take a stake in the company ahead of its placement.
Read more: National Storage unpacks private equity offer
9.12am: Vicinity sheds light on virus blow
Shopping centre owner Vicinity says only half of the stores at its centres are currently open, representing 65pc of its gross lettable area, and it continues to negotiate with retailers for rent relief.
In an update to the market, Vicinity said March sales had been markedly lower than the same time last year, with specialty store and mini major sales lower by 31.1pc while supermarkets felt the boost of panic buying – its sales up by 22.2pc.
It said it had reduced centre trading hours, excluding essential retailers, and had reduced the working hours of 70 per cent of its workforce in a bid to cut down costs.
Chief Grant Kelley said the group was following government guidelines when it came to rent relief.
“We continue to negotiate in good faith with all retailers whose businesses have experienced a downturn as a result of COVID-19, and will accelerate temporary arrangements to assist them through this situation,” he said.
“Inevitably, our income at this time is being impacted negatively, however we agree with the Federal Government’s sentiment that landlords and tenants have a shared responsibility to tackle the challenges brought about by these unprecedented times.”
8.56am: Magellan lifts FUM
Magellan has grown its funds under management thanks to a jump in net institutional inflows.
The Hamish Douglass-led fund posted total funds under management of $96.973bn at the end of April, up from $93.991bn at the end of March.
Institutional inflows accounted for $643m of the increase, while retail inflows lifted by $175m.
Jared Lynch 8.48am: CSL working on COVID immunity booster
Australia’s biggest health company CSL has confirmed it will immediately begin development of plasma-derived therapy to treat people suffering potentially lethal complications from coronavirus at its Broadmeadows’ factory.
The treatment involves extracting antibodies from the plasma of people who have recovered from COVID-19 and developing that into a hyperimmune immunoglobulin medicine to help coronavirus-infected patients, who have become seriously ill and in need of ventilation.
It is hoped the therapy will boost the immune system of COVID-19 patients, helping them combat the virus, which has killed more than 257,000 people and infected 3.7 million others worldwide.
CSL last traded at $305.72.
Read more: CSL ramps up COVID treatment
8.30am: JB Hi-Fi: still no guidance
JB Hi-Fi has reported a surge in sales in March as Australia prepared for coronavirus restrictions, but says uncertainty means it’s still not appropriate to provide full-year guidance.
JB Hi-Fi and The Good Guys retail stores, online and commercial businesses have largely remained open in Australia, and the group says it has seen strong sales growth in Australia continue into April and early May.
“Performance across both brands has remained strong with elevated sales growth driven by homemaker and freestanding stores and a significant acceleration in online,” it said in an update.
JB Hi-Fi says third quarter annual sales growth in Australia hit 11.6 per cent, while The Good Guys was up 13.9 per cent.
The group withdrew its full-year guidance in March.
“Given the ongoing disruption to customer shopping patterns and the uncertainty as the group enters the important end of financial year trading period, the group continues to consider it appropriate to not provide FY20 guidance at this time.”
8.00am: Qatar Airways warns of job losses
Qatar Airways has warned its employees of “substantial” redundancies amid a collapse in demand for air travel caused by the coronavirus, according to an internal memo.
The Gulf airline, which flew to more than 170 destinations, including Australia, with 234 aircraft as of March, has been hit by airport closures and travel bans imposed to contain the spread of COVID-19.
The International Air Transport Association warned last month that air traffic in the Middle East and North Africa would plummet by more than half this year.
“The truth is, we simply cannot sustain the current staff numbers and will need to make a substantial number of jobs redundant – inclusive of cabin crew,” Qatar Airways chief executive Abkar al-Baker wrote in a memo to cabin crew.
The note did not specify how many of its more than 30,000 staff were at risk of redundancy, although the airline has had to slash its passenger services to just 35 destinations.
“The unparalleled impact on our industry has caused significant challenges for all airlines and we must act decisively to protect the future of our business,” the airline said in a statement.
“As a result, Qatar Airways can confirm that the airline will make a number of roles redundant due to the impact of COVID-19. Any job loss is regrettable and we will be working closely with all affected employees to offer our full support during this difficult time.”
AFP
7.25am: Oil prices extend rebound
Oil prices extended their recent recovery, lifted by hopes for a bounce in fuel consumption with economies hard hit by the coronavirus pandemic slowly reopening for business.
Futures that will deliver US crude in June gained 20 per cent to $US24.56 a barrel, climbing for the fifth consecutive session. The price of the June contract has nearly doubled during that stretch, continuing a period of outsize volatility.
Recent gains have paused a weekslong crash that was mainly driven by worries about North America’s main hub for oil storage running out of space. On April 20, US crude futures for delivery the following month fell below $0 a barrel for the first time in oil market history, effectively meaning holders were paying buyers to take crude off their hands.
Brent crude, the benchmark for international energy markets, rose 14pc to a three-week high of $US30.97 a barrel.
Oil prices are receiving a boost on two fronts. Demand for products such as gasoline and diesel is ticking up as parts of the U.S. and Europe relax restrictions on movement and the Chinese economy recovers. At the same time, the production of crude oil has dropped.
Dow Jones
7.20am: ASX set to dip at the open
Investors could be lacking direction when the ASX opens for trade, despite US indices finishing higher overnight.
The benchmark SPI 200 futures contract was down 11 points, or 0.2 per cent, to 5,405.0 points at 7am (AEST), indicating a subdued start to trading.
Wall Street’s main indexes finished higher after healthcare stocks rallied, oil prices surged and a number of countries and US states eased coronavirus-induced restrictions in an attempt to revive their economies.
However stocks pulled back sharply late in the session after US Federal Reserve vice chair Richard Clarida made downbeat comments about the depth of the economic contraction.
On the home front, the Australian Bureau of Statistics will today publish its retail trade figures for March, shedding more light on Australians’ reaction to the coronavirus crisis.
The S&P/ASX200 benchmark index finished Tuesday up 87.3 points, or 1.64 per cent, to 5,407.1, while the All Ordinaries index gained 88.6 points, or 1.64 per cent, to 5,478.1.
One Australian dollar was this morning buying US64.30 cents, down from US64.46 cents on Tuesday’s close.
AAP
6.35am: Disney income falls
Walt Disney laid bare for investors just how badly the company has been ravaged by the novel coronavirus that has shut down its film and TV productions and closed its theme parks around the world.
The world’s largest entertainment company said it lost $US1.4 billion due to the pandemic in the three months ended March 28.
Overall operating income for the company fell 37 per cent to $US2.4 billion. Revenue for the quarter rose 21 per cent to $US18 billion.
The ramifications of the pandemic will likely be even more pronounced in the current quarter, since only the final few weeks of the company’s second fiscal quarter were hit by widespread shutdowns beyond those that started earlier in Asia. Analysts have downgraded Disney stock, eyeing a future defined by the highly contagious virus, even as stay-at-home orders are lifted and businesses reopen.
In the quarter reported Tuesday, the pandemic’s primary impact was on the theme-parks division, since international operations like Shanghai Disney Resort closed before the mid-March closures of Disneyland and Walt Disney World in the US.
Operating income at the division that includes Disney parks fell 58 per cent in the quarter to $US639 million. Revenue fell 10 per cent to $US5.5 billion.
Disney said it estimates the coronavirus eliminated about $1 billion in operating income for the division in the quarter.
Dow Jones Newswires
6.10am: US stocks close higher
Wall Street finished trading higher amid optimism about the easing of restrictions on economic activity in parts of the US and Europe.
The Dow Jones Industrial Average ended up 0.6 per cent. The S&P 500 added 0.9 per cent and the Nasdaq Composite advanced 1.1 per cent.
After rising 1.6 per cent on Tuesday, Australian stocks are tipped to dip at the open. At 6am (AEST) the SPI futures index was down 17 points, or 0.3 per cent.
California detailed initial steps to ease restrictions that have been in place for weeks to try to stop the spread of the coronavirus pandemic. Other states including Florida also began allowing businesses to reopen or laid out plans to do so.
The moves give “investors more confidence that we’re at the worst point in the downturn and that things should start to improve,” said Lee Hardman, currency analyst at MUFG Bank.
Still, Mr. Hardman cautioned that a fresh surge in cases could derail investors’ confidence and lead to a far more protracted economic recovery.
Other analysts said it would take some time to understand how effectively various countries are able to reopen businesses without risking a pick-up in infections.
Among individual stocks, Starbucks jumped 2.1pc after the coffee giant said it plans to reopen more than 85pc of its US company-operated stores by the end of this week.
Elsewhere, the pan-continental Stoxx Europe 600 rose 2.1pc, led higher by German and French stocks.
In Asia, Hong Kong’s Hang Seng index closed up 1.1pc, while stock markets in mainland China, Japan and South Korea were closed for holidays.
Dow Jones Newswires
6.00am: Macquarie loses in US bankruptcy case
The bankruptcy judge overseeing Pace Industries chapter 11 reorganisation rejected a big shareholder’s bid to get the diecast manufacturer’s bankruptcy case dismissed.
Judge Mary Walrath in U.S. Bankruptcy Court in Wilmington, Delaware, on Tuesday ruled against Australian investment bank Macquarie Group, which paid $US37 million for a majority of the preferred stock in Pace owner KPI Intermediate Holdings Inc. in 2018.
Pace and KPI, as well as several other affiliates, filed for chapter 11 last month with plans to hand their assets over to bondholders owed more than $US230 million. The companies said the novel coronavirus had disrupted supply chains and forced the closure of plants and the lay-offs of most employees. Pace customers have included Harley-Davidson Inc. and Whirlpool Corp.
Macquarie, which owns 62pc of KPI Intermediate shares, said it made that investment after being assured by language in an incorporation document stating that holders of a majority of those shares had to approve any bankruptcy filing. Macquarie said it didn’t consent to the bankruptcy and that the company’s directors “wilfully ignored” limits on their authority.
Dow Jones
5.47am: Airbnb laying off 1900
Airbnb is laying off 25pc of its workforce as it confronts a steep decline in global travel due to the new coronavirus.
In a letter to employees, CEO Brian Chesky said the company is letting 1900 of its 7500 workers go and cutting businesses that don’t directly support home- sharing, like its investments in hotels and movie production. “We are collectively living through the most harrowing crisis of our lifetime,” Chesky wrote. He said Airbnb expects its revenue to drop by more than half this year.
Chesky said departing employees will receive at least 14 weeks of their base pay. US employees will continue to receive health care coverage for a year; in other countries, employees will keep their health coverage through the end of this year.
Chesky said travel will eventually return, but will look different. Airbnb expects travellers will want options that are closer to home and more affordable, for example. The company is scaling back its investments in luxury properties as a result.
Airbnb also recently announced a new cleaning protocol that it’s asking hosts to adhere to in order to make travellers feel more secure.
AP
5.43am: ECB firm after German bond ruling
The European Central Bank stood firm after Germany’s top court questioned its massive bond-buying stimulus scheme, vowing to do “everything necessary” to fulfil its mandate of ensuring price stability.
In a shock ruling, Germany’s Constitutional Court gave the ECB three months to clarify key elements of its support to the eurozone, but stopped short of overturning its crisis-era “quantitative easing” (QE) bond-buying scheme altogether.
Germany’s Bundesbank central bank will however be barred from participating in QE after the deadline unless the ECB can show its government debt purchases are not “disproportionate”, judges in Karlsruhe said.
The court also raised an unprecedented challenge to the Court of Justice of the European Union (CJEU), labelling its earlier ruling rubberstamping the QE scheme “not comprehensible” and declaring it not legally binding.
The ECB said it “takes note” of the Karlsruhe judgment, after its 25-member governing council held a telephone conference to discuss its response.
“The Governing Council remains fully committed to doing everything necessary within its mandate” to maintain price stability in the eurozone and ensure its monetary policy action filters through to the real economy, it said.
AFP
5.38am: Stocks cheer virus progress
Equities rallied as investors cheered a further easing of lockdowns in some countries, which offset fears of a renewed trade war between China and the United States.
Oil also rose as the economic outlook seemed to brighten with the markets’ peak-to-trough fall now less than half what it was earlier in the crisis.
With signs that the spread of coronavirus is easing, governments in Europe and parts of Asia-Pacific as well as some US states have begun to allow businesses to reopen.
“Markets have reacted to the fact that it seems that there is a little light at the end of the tunnel,” Scope Markets analyst James Hughes said.
“Lockdown easing in the likes of Spain and Italy has led to many looking at timelines for many aspects of life reopening,” he said.
Markets took an optimistic view with Frankfurt closing up 2.5 per cent and London ending not far behind. On Wall Street, the Dow Jones index had added 1.7 per cent some two hours into the session.
With oil posting double-digit percentage gains, British energy giant BP rose six per cent in its slipstream to 318.90 pence while Royal Dutch Shell B shares added 5.06 per cent to close at 1,283.40 pence.
Hong Kong closed higher on news that some restrictions would be lifted in the city, outweighing data showing its economy suffered its worst contraction on record in the first quarter.
AFP
5.35am: Brussels sees threat to EU law
The EU insisted European law trumps that of member states, after a ruling by Germany’s top court called into question stimulus measures planned by the European Central Bank.
The German ruling came with particularly harsh criticism of the EU’s highest court, which the judges on Germany’s Constitutional Court said had rubber-stamped ECB policy with sloppy argumentation.
Analysts warned that the ECB-led recovery plan for the 19-member eurozone could come under threat if German and EU judges battle it out in the midst of the coronavirus pandemic.
“Notwithstanding the analysis of the decision of the German constitutional court today, we reaffirm the primacy of EU law,” said Eric Mamer, spokesman for the European Commission, the bloc’s executive.
He spoke after the German court gave the ECB three months to clarify a key element of the ECB’s support to the eurozone but stopped short – for now – of overturning its debt crisis-era “quantitative easing” (QE) bond-buying scheme altogether.
The court ruled that Germany’s central bank would be barred from participating in QE beginning this summer unless the ECB “demonstrates in a comprehensible and substantiated manner” that its policies are legal, the ruling said.
AFP
5.33am: Fiat Chrysler swings to loss
Fiat Chrysler Automobiles reported a first-quarter net loss of 1.7 billion euros ($US1.84 billion) due to a steep decline in car sales triggered by the coronavirus pandemic, and said the impact on the second-quarter would be even more severe.
The Italian-American carmaker has withdrawn full-year earnings forecasts due to the volatility of the economic crisis provoked the virus, which includes stalled production and shuttered dealerships. But it said that an internal stress-test indicates it could survive a 50pc reduction in volumes by slashing costs and cash burn.
The first-quarter loss compared with earnings of 619 million euros during the same period of 2019. Revenues sank 16pc to 20.5 billion euros as global shipments slumped 21pc to 818,000 with production suspended in all regions and global demand collapsing. CEO Mike Manley said the company expects a net loss and “significant” negative cash flows” in the second quarter.
AP
5.30am: US services sector contracts
The US service sector plunged into contraction territory for the first time in a decade last month as the pandemic forced shutdowns and lay-offs nationwide.
The Institute for Supply Management said Tuesday that its service-sector index fell to 41.8 in April, compared with a March reading of 52.5. Any reading below 50 signals that the service sector, where the majority of Americans work, is in a contraction.
It was the first time the services index has been in contraction since December 2009 and it was the lowest reading since March of that year with the nation mired in the Great Recession.
AP
5.26am: Virgin Atlantic to cut 3000 jobs
Virgin Atlantic will cut over 3000 jobs – around a third of staff – after the coronavirus put airlines under “unprecedented pressure”, the British carrier part-owned by tycoon Richard Branson announced.
With the virus having decimated international air travel over the past two months, Virgin said it was obliged to make the cuts to preserve its financial future and added it was in talks with the government about potential support.
The announcements come around two weeks after Branson warned that Virgin Atlantic would collapse unless it received financial aid from the UK government to weather the coronavirus crisis. Virgin is reportedly seeking £500 million ($US612 million, 564 million euros) in state help.
AFP
5.24am: US trade deficit widens
US exports plunged nearly 10 per cent in March, driving an increase in the trade deficit to $US44.4 billion as the coronavirus pandemic took hold, the Commerce Department reported Tuesday.
Imports also fell, but only by 6.2 per cent, as transportation and shipping began to close down worldwide.
“The declines in March exports and imports were, in part, due to the impact of COVID-19, as many businesses were operating at limited capacity or ceased operations completely, and the movement of travellers across borders was restricted,” the report said.
AFP
5.20am: German court puts squeeze on ECB
Germany’s top court demanded clarification of a key element of the European Central Bank’s support to the eurozone economy, but stopped short of overturning its 2.6-trillion-euro “quantitative easing” (QE) bond-buying scheme altogether.
Germany’s Bundesbank central bank will be barred from participating in QE in three months’ time unless the ECB “demonstrates in a comprehensible and substantiated manner that the monetary policy objectives pursued by the ECB are not disproportionate,” the Constitutional Court (BVG) in Karlsruhe said in a landmark ruling.
The court also raised an unprecedented challenge to the Court of Justice of the European Union (CJEU), labelling its earlier ruling rubberstamping the QE scheme “not comprehensible” and declaring it not legally binding.
But presiding judge Andreas Vosskuhle said the ECB’s new 750-billion-euro ($US813 billion) “Pandemic Emergency Purchase Programme” (PEPP) launched to fight the impact of the coronavirus was not directly affected.
AFP
ASX 200 rises 0.5pc to record close; Origin down
A strong day for Aussie shares as the ASX 200 rises 0.5 per cent to a record high close at 8532.3. Origin cuts APLNG guidance. Citi upgrades BlueScope. Rinehart lifts Lynas stake. Broker upgrade for Zip. Lendlease selling Capella. US probing if DeepSeek used Nvidia chips. Trump advisors hunt for deals as Canada, Mexico tariffs loom.
ASX soars to record high on tech, rate cut hopes
The sharemarket has jumped to a record high of 8515.7 points, amid positive leads from Wall Street after big tech reports and Reserve Bank rate cut hopes. DeepSeek will not derail Microsoft’s $US80bn AI investment this year. Zip and MinRes drop.