Banks lead 0.5pc ASX jump on vaccine hope, as Afterpay cracks $90

Shares finished higher by 0.5pc after setting a five-month high, Afterpay surged 12pc and banks rose more than 4pc.

Working on a potential coronavirus vaccine. Picture: AFP

• Three AMP Capital execs quit
• Mall writedowns send Scentre to $3.6bn loss
• Fuel hit weighs on Ampol
• Afterpay, Xero set to join top 50

That’s all from the Trading Day blog for Tuesday, August 25. The local market finished higher by 0.5pc thanks to gains in banks and tech stocks, taking cues from Wall Street amid investor optimism over a coronavirus vaccine.

Locally, earnings season continued, with results released from Ampol, Ansell, Blackmores, Oil Search, Qube, Scentre and Seven West Media, among others.

Nick Evans 9.22pm: CIMIC target of a shareholder class action

Contracting CIMIC is the target of a shareholder class action over alleged failures of disclosure over its failed foray into the Middle East and the reporting of its controversial use of so-called reverse factoring on its financial accounts.

In a late announcement to the market on Tuesday night, CIMIC said a class action had been filed in the Federal Court this week on behalf of shareholders who bought CIMIC shares between 7 2018 February and 22 January 2020.

The action relates to “disclosures about CIMIC’s non-controlling 45 per cent investment in the Middle East as well as the reporting of CIMIC’s cash flows in the context of factoring arrangements”.

“CIMIC denies there is a proper basis for the claim and will defend the proceedings,” the company said.

In January CIMIC said it would abandon its business in the Middle East and take a $1.8bn write-down after being unable to recover debts owed from its foray into the region, which dates back more than a decade.

CIMIC said it would offload its non-controlling 45 per cent stake in the Dubai-based BIC Contracting joint venture, previously badged as Al Habtoor Leighton.

The company’s shares plunged 20 per cent on the announcement.

CIMIC has also been under sustained pressure over its use of supply chain financing arrangements, which critics argue allowed the company to push back payments to small suppliers and hide the extent of its trade debts on its balance sheet.

CIMIC shares closed down 12c to $22.29 on Tuesday.

John Stensholt 8.33pm: VGI Partners performance ‘unacceptable’

A remorseful Rob Luciano has described the performance of his VGI Partners during a disastrous March quarter as “unacceptable” and said the hedge fund had made three critical errors that saw profits plunge and performance fees slashed.

An introspective Luciano was grilled by analysts on Tuesday. The star Sydney hedge fund manager was asked if he and his team had lost focus in recent months, accused of being too “opaque” for financial advisers to understand and even whether VGI had spent too much on time and money on charitable donations.

Luciano could hardly argue, given he was delivering results for the first six months of 2020 that saw VGI’s performance fees spiral from $32.9m a year earlier to only about $100,000, and funds under management drop $700m in the March quarter alone to $2.9bn.

He did not try to hide his contrition over what he admitted had been a “cathartic” experience that saw VGI enter March in a strong position, only for Luciano’s team to completely misread the consequent market comeback, fuelled by central bank spending to try to negate the effects of COVID-19 around the world.

“We misread the macro and we misread the market signal,” the VGI executive chairman said of a performance record that saw VGI funds lose money for the 12 months. This compared with its unlisted master fund delivering a compound annual return of 13 per cent after fees since 2009.

“The events that have taken place over the course of this year, not only have they been tremendously humbling but they have been cathartic in nature … and certainly personally it has been a time for a lot of reflection and time for a lot of soul searching.”

Read more

7.26pm: Jack Ma’s Ant Group to IPO: Bloomberg

Bloomberg is reporting that billionaire Jack Ma’s Ant Group has filed for an IPO in Hong Kong and Shanghai. The landmark dual listing could top Saudi Aramco’s $US29bn debut, Bloomberg said.

4.42pm: Results drive winners, losers

The latest results releases have polarised investors, providing both the biggest winner and loser for the session.

Bingo Industries outperformed after touting a near 200 per cent profit increase. Shares in the waste management group lifted 13.5 per cent to $2.44.

Vitamin maker Blackmorescame under pressure, falling 5.6 per cent to $71.58 as it unveiled divestments and job cuts.

Seven West Media took a 16.1 per cent hit to 13c as it said the weak advertising market had wiped out its annual profit, whileScentre rose 4.5 per cent to $2.11 despite detailing a hit to its valuations from COVID-19.

Ampol slipped 4.4 per cent to $26.96 as its Lytton refinery slumped to a $59m loss.

But it was Nanosonic’s 25 per cent profit slump that hurt its shares the most – the stock falling 9.6 per cent to $6.21.

Here’s the biggest movers at the close:

4.12pm: Shares fade to 0.5pc gain

The local market climbed to the best levels since March intraday, but failed to hold on to the momentum by the close, finishing the day with a more moderate 0.5 per cent gain.

Optimism of progress toward a coronavirus vaccine helped offshore markets overnight and provided a strong lead for shares, pushing the market to heights of 6199.2 in the first hour.

At that level, the market was 13.4pc off its February high, in contrast to new records on the S&P 500 and Nasdaq overnight.

By the close, the ASX200 was up 32 points or 0.52 per cent to 6161.4 while the All Ords finished higher by 32 points or 0.50 per cent to 6332.

Hope in the market was at odds with the latest economic data, which showed further pressure on payroll jobs from Victoria’s lockdown, pulling the national figure down 1pc.

Bridget Carter 3.46pm: BHP hires UBS for coal sale, demerger

DataRoom | Resources giant BHP is understood to have hired UBS to work on the sale or demerger of its coal mines.

It comes after the group also called on the services of Goldman Sachs for the plan.

More to come

Lachlan Moffet Gray 3.07pm: Murray to join Future Fund

Former head of Australian equities at AMP Capital Genevieve Murray, who resigned this week, has been appointed head of listed equities at the Future Fund.

The appointment was announced shortly after news of her resignation from AMP broke, along with colleagues David Allen and Emily Woodland.

The Future Fund said Ms Murray was “strongly positioned to led our team and build on the strong foundations of our listed equities program”.

Ms Murray will report to deputy chief investment office David George.

“I am thrilled to welcome Genevieve to the Future Fund. Genevieve has extensive experiencespanning research, equities portfolio management and leadership roles,” Mr George said.

Ms Murray will take the position over from Megan Ford, who was made acting head of listed equities in March

David Swan 2.58pm: Xero soars after Waddle acquisition

New Zealand-based cloud accounting software outfit Xero soared to fresh heights on Tuesday after picking up invoicing start-up Waddle, in a deal worth up to $80m.

Xero will pay $31m in cash for Waddle, as well as subsequent earn-out payments worth up to $49m, for the software company.

“Waddle’s lending platform has the potential to enable a wide range of banks, fintechs and other lenders to better support small business financial needs,” Xero chief executive Steve Vamos said.

The transaction is expected to be completed before the end of the 2020 calendar year, and Xero anticipates the transaction, integration, and operating costs will have “minimal impact” on its FY21 earnings.

XRO hit new intraday highs of $101.24, the first time they have passed the $100 per share threshold, but last traded down 1.1pc to $97.37.

Follow the latest in tech at our live blog The Download

Lachlan Moffet Gray 2.45pm: Three resignations at AMP Capital

DataRoom | AMP Capital’s head of global equities and CIO David Allen, head of Australian equities Genevieve Murray and co-head of sustainable investment Emily Woodland have all handed in their resignation, AMP has confirmed to The Australian.

In a statement, AMP capital said the trio had left to pursue other opportunities, although Ms Murray and Ms Woodland would remain at the business for a few months to ensure a smooth transition.

“AMP Capital has announced changes in its listed equities team including the decision of Global Chief Investment Officer of Equities, David Allen, to leave AMP Capital to pursue opportunities outside the business,” the statement said.

“Head of Australian Equities Genevieve Murray and Head of Sustainable Investment Emily Woodland have also decided to leave to pursue other opportunities.

“Emily and Genevieve will remain with the business for the coming months to ensure a smooth transition for our clients.”

The Australian understands that Ms Murray has secured a new role outside of AMP.

“David, Genevieve and Emily each have played a key role in resetting AMP Capital’s listed equities business and creating strong foundations for growth. They leave with our best wishes,” the statement said.

Samantha Bailey 2.15pm: Pro-Pac swings to $6.6m profit

Shares in Pro-Pac edged higher on Tuesday after the packaging company, which is controlled by rich-lister Raphael Geminder, spruiked positive momentum for the first two months of the new financial year and unveiled a swing to full-year profit.

Pro-Pac booked a net profit after tax of $6.6m for the 12 months through June 30, compared to a $151.3m loss a year ago, and the company declared a final dividend of 4 cents a share after no dividend in 2019.

“I am proud of how the Pro-Pac team has continued to focus on our growth objectives and delivered a set of strong financial results despite the ongoing challenges of the COVID-19 pandemic,” chief executive Tim Welsh said.

Earnings before interest, tax, depreciation and amortisation lifted 15.4 per cent to $32.4m for the year while net debt was reduced by 44.4 per cent.

The company said revenue in its flexibles packaging business increased by $14m on the prior period, while revenue in its rigid division increased by $7.7m due to higher sales volume in food, beverage, personal care and household segments.

PPG shares last up 6.3pc to 17c.

Bridget Carter 2.01pm: Charter Hall eyes DJs retail portfolio

DataRoom | Charter Hall appears to be gathering further momentum when it comes to acquisitions, with the $5.71bn real estate group said to be in the mix to buy the David Jones retail properties.

The department store David Jones has been running a sale process for the sites where its central business district stores are located in Sydney and Melbourne through investment bank UBS.

Already, David Jones has netted $120m for one of its Melbourne sites on 299 Bourke St, but is also looking to divest the other premier retail trading site at 310 Bourke Street.

Charter Hall is lining up at a time that at least one other listed group and wealthy private family is believed to be in the mix for the properties that are expected to sell collectively for a price somewhere between $500m and $1bn.

One potential contender could be the property interests of Brett Blundy, who listed the Aventus Group, which owns large format retail stores, although analysts say he does not have a track record of being a central business district real estate buyer.

The process is well underway, with bidders assessing detailed information they received about the sites from UBS.

More to come

Read more: David Jones’ flagship stores on the block

1.55pm: Victoria stalling jobs recovery: RBC

The latest payrolls release shows ongoing job losses linked to Victoria’s restrictions, stalling the broader nationwide labour market recovery, says RBC.

Macro rates strategist Robert Thompson notes that the state’s job index fell 1.6pc over the reporting period, suggesting “recent job losses have possibly reached 100k”.

He says weakness in today’s release will likely flow through to the August labour force numbers, with risk that even with the extended stimulus, there is a slip in employment after several months of bounce back.

“Falling new-infection rates in VIC should prove a positive for the labour market when Victoria’s lockdown can start to be eased in the weeks and months ahead, but there’s already been a lot of damage done,” Mr Thompson writes.

“The ongoing hit to business confidence amid the renewed VIC lockdowns and the prospect of future unpredictable flare-ups remains a deep concern for businesses. We suspect that a relaxation on VIC lockdown restrictions will see a more drawn-out recovery in jobs than we saw through May and June.

“Pressure will remain on Commonwealth and State Government to “do more” to address soft demand and weak labour market conditions, and ultimately also on the RBA.”

Read more: RBA governor calls on states to boost spending

Bridget Carter 1.30pm: Hutton quits Goldmans for Westpac

DataRoom | Goldman Sachs Australia‘s first female partner and Australian head of securities, Nell Hutton, has departed the investment bank to take on a senior executive role at Westpac.

DataRoom understands that Ms Hutton will be appointed as the general manager of financial markets at Westpac Institutional Bank, replacing Anthony Masciantonio, who has held the role since 2014.

Ms Hutton joined Goldman Sachs in 1998 in London and worked as the executive director for derivatives and debt capital markets before relocating in Australia in 2006 to become co-head of derivative and superannuation strategies.

She has worked as the head of securities since 2018 and was made the first female partner at Goldman Sachs Australia that same year.

The appointment comes a month after Westpac recruited Deutsche Bank Australia CEO Anthony Miller as the chief of Westpac Institutional Bank, with Mr Miller due to start his new position later this year.

Eli Greenblat 1.26pm: Mosaic store closures ‘not a bluff’

Mosaic Brands chief executive Scott Evans has warned landlords should take him at his word that the retailer is looking to close as many as 500 of its 1400 store network, with his now public plans to walk away from hundreds of leases not a negotiating tactic but embedded in the new reality of the retail sector.

“This is not a bluff,’’ Mr Evans told The Australian on Tuesday.

He said some shopping centre landlords were still in denial of the massive shifts taking place, and that this would lead to store closures if rent deals were not done.

“We could have said (we were closing) zero to 500 stores, which probably would have been easier to suggest we were bluffing but we do anticipate as we sit here today that it is more likely than less likely to be somewhere between 300 and 500 stores,’’ he told The Australian.

“What COVID-19 has done is accelerate the web for everybody and what was going to happen in the next three to five years is happening in the last six months.

“On that basis looking forward we believe that necessarily won’t change and therefore if we can’t agree to commercial terms with landlords we will have no option but to unfortunately exit a store.

“It is not our wish to exit stores but we can see already in numerous discussions that some landlords accept and understand what I will call ‘a new reality’ and some are in denial, which is understandable.”

MOZ shares last down 14.7pc to 58c.

Read more: Mosaic could shut up to 500 stores

1.14pm: Ansell execs go head-to-head for top job

Ansell chief executive Magnus Nicolin says the protective garment maker’s board is evaluating through mini board meetings and remote interviews the merits of two internal candidates to replace him.

Mr Nicolin, whose tenure was recently extended by six months through December 2021 because international travel restrictions made it hard to properly screen prospective successors, said the candidates are getting more airtime with the board to share their views on the issues and challenges facing the Australia-listed company.

The candidates are Ansell’s head of industrial global business Neil Salmon and head of healthcare global business Darryl Nazareth.

“I’ve said to both of them and the board that my mission is to make this a really hard decision for the board. I’m going to present them with two super qualified candidates: that’s the definition of success,” Mr Nicolin told Dow Jones Newswires in an interview.

Mr Salmon’s industrial unit lifted fiscal 2020 sales by 2.2pc on growth in chemical products, while annual sales at Mr Nazareth’s healthcare unit surged 13pc on unprecedented global demand for single-use and exam gloves amid the coronavirus pandemic.

Mr. Nicolin has been managing director and CEO of Ansell since 2010.

Dow Jones Newswires

1.01pm: Banks surge 4pc to help ASX higher

More than 4pc gains in the major banks are driving strength on the ASX at half time, alongside a rally in key tech names.

At 1pm, the ASX is up 29 points or 0.48 per cent to 6158.9 – after hitting a near-six month high of 6199.2 in early trade.

Banks are dominating today – Westpac up by 4pc as NAB adds 4.05pc, ANZ lifts by 3.2pc and Commonwealth Bank rises by 2pc.

Afterpay is doing some heavy lifting with a 5.6pc lift to $87.35, while Wesfarmers and Goodman Group are key drags with losses of 1.2pc and 1.9pc respectively.

Here’s the biggest movers at 1pm:

Samantha Bailey 12.43pm: Online spend lifts as overall trend slows

Online spending has lifted to new highs as consumers, especially in Victoria and also in NSW, shun physical retailers during the pandemic, according to CBA’s weekly card spending report.

The data, derived from the bank’s own customers, shows a lift in online spending, but annual spending growth is trending lower as in-store spend remains suppressed by restrictions and consumer fear of further outbreaks.

“State success in controlling COVID-19 will likely continue to dictate in-store spending patterns,” senior economist Kristina Clifton says. “In-store spending is strongest for Western Australia, Queensland and Tasmania, but Victorian in-store spending remains extremely weak.”

Still, household credit and debit card spending is higher by 5pc from the same time last year.

Further, the report finds that Victorian spend at pubs, bars and nightclubs remains very weak, no surprise given the strict lockdown measures, but aversion has partially spilled-over into NSW, with spend much weaker than QLD or WA.

12.21pm: Vaccine hopes lift travel names

Hope of progress in the quest for a coronavirus vaccine is lifting travel names on Tuesday, in line with their offshore rivals.

Overnight, it was reported that the Trump administration was considering bypassing normal US regulatory standards to fast-track an experimental coronavirus vaccine from the UK for use in America.

In addition, local figures continue to flatline, with 148 new cases in Victoria and three in NSW.

The optimism is helping Flight Centre shares to lift by 6.8pc and Qantas to lift by 2.2pc.

Webjet is up 5.3pc and Corporate Travel higher by 5.4pc.

12.01pm: US futures rise on US-China talk

S&P 500 futures rose as much as 0.5pc intraday in response to an apparent lessening of US-China trade tensions.

The US Trade Representative said US and Chinese trade negotiators discussed the phase-one trade deal and that both sides saw progress and were committed to its success.

The two countries addressed steps that China has taken as a part of the deal such as ensuring greater protection for intellectual property rights and removing impediments to American companies in the areas of financial services and agriculture, the USTR said in a statement.

Both sides agreed to create conditions to push forward the deal, the official Chinese news service Xinhua reported Tuesday.

Momentum is helping the ASX – last up 0.6pc.

11.56am: Treasury bond tender gets 4x bids

Results of the latest Treasury bond tender show demand for more than four times the $100m offer amount.

The November 2027 bonds were offered to the public and received 33 bids totalling $430m, of which 5 were accepted in full and further 1 in part.

The lowest yield accepted was -0.4425, and the highest accepted was -0.4325.

11.35am: Payroll jobs fall 1pc

Payroll jobs fell by 1pc for the month to August 8, with lockdown-linked lay-offs in Victoria weighing on the national figure.

According to the latest data from the ABS, payroll jobs fell 1pc nationally, and 2.8pc in Victoria – the result of some initial impact from the Stage 4 restrictions, though further detail will be garnered in the next release.

“Around 39 per cent of jobs lost in Victoria by mid-April had been regained by 27 June, but by early August this had reduced to 12 per cent,” head of labour statistics Bjorn Jarvis said.

Payroll jobs worked by people aged under 20 increased 1.5 per cent nationally in the month to 8 August, however, there was a 5.6 per cent decrease in Victoria.

11.27am: Low virus numbers stoke confidence

Consumer confidence clocked one of its largest weekly increases in the last three months, jumping by 4.6 per cent last week to 92.7 as coronavirus numbers moderated.

The increase in sentiment was broadbased, led by a 13.1pc jump in ‘current economic conditions’ not 25pc up over the past two weeks. ‘Future economic conditions’ meanwhile rose a more moderate 3.9pc, its third weekly gain.

“The substantial decline in active cases in Melbourne and continued low numbers in Sydney have raised hopes that the pandemic can be contained without a broadening of lockdowns beyond those already in place,” ANZ head of Australian Economics David Plank says.

“Although only one subcomponent is above the neutral level of 100, the gains made in the last two weeks have bought other subcomponents closer to that point, though ‘current economic conditions’ is still 38pc below the neutral level.”

ANZ-Roy Morgan Aus Consumer Confidence: Jumps more than 4% for the strongest gain in some time. Current economic conditions up 25% in the past two weeks, but still a way below neutral. Confidence is now above neutral in Perth & Adelaide. #ausretail @DavidPlank12 @roymorganonline pic.twitter.com/fW0tZFMb2g

— ANZ_Research (@ANZ_Research) August 24, 2020

Patrick Commins 11.20am: Super system records first net outflows

Australians pulled more money out of the superannuation system than they put in over the three months to June – the first quarterly drop in net contributions since the compulsory super regime began in the early 1990s.

Benefit payments surged by 77 per cent cent to $37.4bn in the second quarter of the year, new statistics from the Australian Prudential Regulation Authority reveal, driven by the spike in lump sum payments as savers rushed to take advantage of the Morrison government’s COVID-19 early release of super scheme.

Lump sum payments accounted for $26.8bn of benefits paid in the quarter, while pension payments totalled $10.7bn.

Net contributions – that is contributions and net benefit transfers less benefit payments – were -$2.3 million – the data showed.

More than 3 million Australians have ripped $31.7bn out of their retirement savings since the introduction of the early access scheme, which allows savers to make two withdrawals, each worth up to $10,000, from their super accounts. The scheme only asks applicants to self-certify that they need the money to help assist them through the COVID-19 recession.

As many workers run down their savings, Scott Morrison has said he is considering delaying or scrapping the lift in the compulsory rate from 9.5 per cent to 10 per cent in July next year.

Read more: Bigger second bite for early super withdrawals

11.02am: Bingo leads results rally

Shares have dulled some of their early lift, but remain higher by 0.65 per cent after the first hour, with significant lift from the major banks and Afterpay.

Results are in focus from Scentre, who posted a $3.6bn loss as its shopping centre valuations were carved, while Blackmores set out plans for further divestments and staff cuts. Bingo is the best performing after trebling its profit from the same time last year.

Here’s how today’s reporting companies are trading early:

COMPANY	% CHANGE	LAST TRADED
Bingo Industries	14.42	$2.46
Perenti	10.46	$1.32
Alumina	5.03	$1.67
Stockland	4.13	$3.78
Scentre Group	3.96	$2.10
Spark Infrastructure	2.26	$2.26
Oil Search	1.83	$3.05
Western Areas	1.65	$2.47
Ansell	0.6	$40.54
Blackmores	-2.51	$73.96
Ampol	-2.59	$27.47
Qube	-3.08	$2.83
Seven West Media	-16.18	$0.13

10.50am: Afterpay, Xero tipped to join top 50

Afterpay, Xero and Northern Star are poised to break into the prized top 50 index at the next rebalance, according to Morgan Stanley, at the expense of Oil Search, Vicinity Centres and Computershare.

And in the ASX 20 index, quantitative analyst Antony Conte sees Fortescue and Coles as the most likely inclusion candidates while Scentre and Suncorp are tipped to be dropped if a change were to occur.

In the S&P/ASX 100, Fisher & Paykel Healthcare remains the clear frontrunner to replace Virgin Money, while Flight Centre’s position in the index has deteriorated further, with Mineral Resources the likely replacement.

For the S&P/ASX 200 Index, he has swapped out Tyro Payments for Codan. Ramelius Resources, Zip Co, Auckland International Airport, AUB Group, Westgold Resources and Codan are potential inclusions.

Southern Cross Media, NIB Holdings, New Hope, McMillan Shakespeare, Orocobre, oOh!media and Avita Therapeutics are seen as those that are most likely to drop out.

S&P Dow Jones Indices is due to announce the results of the September quarterly index review on Friday, September 4, with all changes are effective close of trade on September 18.

Thes review includes the semi-annual S&P/ASX 300 Index review in addition to the quarterly S&P/ASX 20, 50, 100 and 200 reviews – effectively covering the entire float-adjusted S&P/ASX Indices.

Savvy hedge funds typically put a lot of effort into predicting and trading these changes as the effects on passive money flows can be substantial.

Lilly Vitorovich 10.32am: Seven ad warning sparks 20pc dive

Seven West Media shares are diving after the company warned that advertising market conditions remain “volatile and unpredictable” as clients keep a firm lid on ad spending during the coronavirus crisis, which has hit the media group’s annual earnings.

However, the Kerry Stokes-controlled company said the rate of decline has moderated since the fiscal fourth-quarter to the end of June.

The free-to-air television market dropped 15.8 per cent in July from a year earlier, with Seven recording revenue share at 39 per cent.

Chief executive James Warburton says the focus remains on transforming its commercial TV network and newspaper operations as it pushes ahead with the sale of more assets following three divestments that raised $150m.

Seven is looking to slash costs by $170m across the group, including the renegotiation of its AFL agreement at a lower level and for an extended term. Plus, it has benefited from an incremental $51m of temporary savings during the coronavirus crisis.

SWM shares down 19.4pc to 12.5c.

Cliona O’Dowd 10.27am: HUB24 posts record inflows of $5bn

HUB24 is targeting a more-than 60 per cent jump in funds under administration by mid-2022, after record net inflows of $4.95bn over fiscal 2020 helped push its total funds under administration to $17.4bn for the year.

For the 12 months through June, the investment and superannuation platform provider posted a net profit of $8.23m, up 15 per cent on the prior corresponding period as it increased market share and recorded higher fee income as transaction volumes rose through the COVID-19 crisis.

Platform revenue grew by 37 per cent to $74.3m, up from $54.1m the year prior, while platform direct expenses increased 36 per cent to $18.6m. Overall revenue increased 13 per cent to $112m.

“While administration fees were impacted by negative equity markets, market volatility drove high transaction volumes and brokerage fees and higher cash balances resulting in higher overall cash fee income,” the company said.

HUB24 managing director Andrew Alcock said the platform provider was well positioned for growth through the pandemic.

HUB last traded down 3.5pc to $15.02.

Ben Wilmot 10.19am: Valuation hits pull Stockland to $14m loss

Stockland has fallen to a $14m loss on the back of valuation hits from the coronavirus crisis as its investment portfolio was dented by $464m from declines in its shopping centres and a further $116m cut to its retirement portfolio.

But the company’s residential land business is holding up, generating a 2.5 per cent lift in Funds From Operations and an operating profit margin 19.9 per cent as demand for houses is now being supported by government stimulus packages.

Stockland settled 5,319 residential lots, including 607 townhomes and had about 4,300 contracts on hand at the end of July. But it was hit by a big jump in defaults due to the pandemic.

“We saw a gradual recovery in May, with the market significantly buoyed by the government’s HomeBuilder program in June. Settlements are completing within similar time frames to pre-COVID-19 levels and the default rate in the fourth quarter was approximately 7 per cent and is expected to remain elevated reflecting the ongoing uncertainty presented by COVID-19,” the company said.

Stockland is benefiting from the current low interest rate environment, positive credit conditions and government stimulus are expected to continue to support the market.

Overall, Stockland’s Funds From Operations dropped by 8 per cent to $825m, largely due to COVID-19 impacts on operations and FFO per security fell by 7.2 per cent to 34.7 cents. The full year distribution per security was 24.1c and the distribution payout ratio was at 70 per cent, slightly below target range, and fully covered by operating cash flow.

SGP last traded up 3.6pc to $3.76.

A Stockland shopping centre in Wetherill Park. Picture: Mark Metcalfe/Getty Images.

10.11am: Shares lift to four-day highs

Shares are lifting to four-day highs early, spurred higher by optimism of a coronavirus vaccine which lifted offshore markets overnight.

At the open, the ASX200 is higher by 60 points or 0.98 per cent to 6189.5.

All sectors bar health and utilities are higher, led by strong gains in financials and further outperformance in tech names.

Afterpay is surging 6.4pc to new heights of $89.27 while the major banks are all up by between 2.3pc and 2.9pc.

Scentre is rising by 6.2pc despite significant writedowns at its half year results.

10.07am: Seven received $21m in JobKeeper subsidies

Kerry Stokes-backed Seven West Media received $21.3m of government JobKeeper subsidies over the period April to June 2020, according to a note on page 84 of the company’s annual report.

The detail comes as Seven West posts a net loss of $162.1m for the year to end-June mostly due to writedowns of television and newspaper assets and as well as some asset sales. This compares with a loss of $327.6m last year.

Seven says it continues to “right size” its cost base to adapt to a rapidly changing operating environment.

During the 2020 financial year $135m of gross cost out initiatives were delivered across the Seven business. These savings included the annualised benefit of the renegotiated AFL agreement, as well as cost savings from a 20 per cent reduction in headcount within the television business and a three-month salary reduction across staff.

Earnings pre-significant items of $98.7m fell 53.6 per cent.

10.01am: Virgin creditors max return just 13pc

Unsecured Virgin creditors will get back between 13pc of their investment under a “high” scenario and 9pc under a “low” scenario, according to Deloitte’s report to creditors, released this morning.

The timeline for returns is 6 to 9 months in the event the Bain deed of company arrangement proposal is approved by creditors; or 18 to 36 months in the event the sale is completed under an ASA, or in the event completion does not occur and asset realisations are made on a piecemeal basis in liquidation.

The airline collapsed in April, owing $6bn to its creditors, who range from mum and dad bondholders to aircraft lessors to service providers.

Read more: Virgin bondholders say: we’ll be back

Eli Greenblat 9.54am: Mosaic to shutter up to 500 stores

Mosaic Brands, whose retail outlets include Millers, Rockmans, Noni B and Katies, could shrink its bricks and mortar store footprint by almost one third as it becomes the latest retailer to pivot to online and walk away from store leases.

The fashion retailer is currently locked in a dispute with one of its landlords who blocked the group from its own stores last week after the two parties couldn’t agree to rent payments during the COVID-19 pandemic.

It comes as Mosaic Brands slumped to a full-year net loss of $170.36m after booking almost $100m in impairments in goodwill to its brands and $49m in provisions for rents.

The retailer said it is now focused on significantly cutting back its store footprint by between 300 and 500 stores over the next 12 to 24 months in the wake of COVID-19 and a strong performance by its online platforms.

It said on Tuesday that over the last 3 years it has progressively reduced its exposure to long-lease terms resulting in around 41 per cent of current leases either on holdover or expiring by December 2020.

“The retail rental market in Australia is not paused because of the pandemic – it is fundamentally changed for the future,’’ said Mosaic Brands chief executive Scott Evans.

“Some though not all landlords accept that reality, so while exact locations and numbers are to be determined, the Group anticipates potentially 300-500 store closures over the coming 12-24 months. Shuttered stores work for no one so we aim to minimise closures, but not on uncommercial terms.”

Mosaic Brands chief Scott Evans. Picture: Renee Nowytarger / The Australian.

Perry Williams 9.51am: Oil Search scraps dividend

Oil Search withdrew its first half dividend after slumping to a $US266m loss as the oil market crash and hefty writedowns on the value of its Papua New Guinea assets hit the gas producer.

The $US266m net loss for the six month period compared with a $US162m profit a year earlier and was a worst result than a $US208m loss forecast by RBC.

Its core profit after stripping out the one-off items dived 85 per cent to $US24.7m while a dividend was scrapped for the half after a 5c a share payout last year due to its slim profit, the uncertain near-term oil price outlook and the need to keep capital amid challenging market conditions. Oil Search’s board will reassess whether to pay a dividend ahead of its annual results in February.

“The unprecedented challenges due to COVID-19, the consequent disruption to the global economy and the precipitous decline in oil prices in the first half of 2020 have been catalysts for reassessing all areas of Oil Search’s business,” Oil Search managing director Keiran Wulff said.

9.39am: Charts signal ASX strength to come

A decisive break above the June peak in the S&P 500 provides some upside risk for Australian shares on Tuesday, which may continue before a key speech from Fed chair Jerome Powell’s at Jackson Hole on Friday.

Overnight futures suggest the S&P/ASX 200 will open up 0.6pc at 6167, slightly above its downward sloping 200-day moving average at 6153 and slightly below the six-month daily closing basis high 6167.6 set last week.

The expected opening rise would also leave the Australian market within striking distance of the June peak at 6198.6 points, which is equivalent to the 3393.53 level on the S&P 500 which was decisively broken last night.

The S&P 500 surged 1pc to a 6-month high of 3431.3, the Dow Jones index rose 1.4pc and the Nasdaq gained 0.6pc after weekend news that the Trump Administration was considering bypassing normal US regulatory standards to fast-track an experimental coronavirus vaccine from the UK.

Energy was the strongest sector as WTI crude rose 0.7pc to $US42.62 as US storms threatened supplies, but stocks that would benefit most from economic reopening – airlines, cruise lines – were the market leaders.

The Euro Stoxx 50 surged 2.2pc to 3331.74 despite Germany, France and Italy recording their highest COVID-19 infection rates since April-May, albeit with less deaths. But in Hong Kong, scientists confirmed the first case of coronavirus reinfection from a different strain of the virus from a 33-year old who had the virus in April.

Keep in mind today that a number of major companies including Wesfarmers, Domino’s Pizza, Santos and Coca-Cola trade ex-dividend.

Eli Greenblat 9.32am: Treasury defends China export business

Treasury Wine Estates chairman Paul Rayner has defended the winemaker’s export business in China in the wake of the Chinese Government launching an anti-dumping investigation into Australian wine, saying the China market remained a priority and it would co-operate with government officials through the process.

“At the time of preparing this Annual Report, TWE had been advised that the Chinese Ministry of Commerce had initiated an anti-dumping investigation into Australian wine exports into China,” Mr Rayner wrote in the group’s annual report released Tuesday.

“This decision matters deeply to our business and the industry, both in Australia and China. We remain committed to China as a priority market and will continue to invest in our local operating model, team and our relationships with customers and consumers to enhance the wine category and grow our contribution to China.

“We will work cooperatively with the Chinese and Australian governments at all levels to resolve the situation.”

Elsewhere, the former chief executive of Treasury Wine Estates, Michael Clarke, took home total remuneration of $7.83m in fiscal 2020, down from $11.387m in 2019.

Mr Clarke stepped down as CEO in July, replaced by chief operating officer Tim Ford. According to the report Mr Clarke had salary of $2.6m, roughly in line with 2019, while in 2019 he also had a cash incentive of $2.6m which was not repeated in 2020.

Chairman Mr Rayner received total remuneration of just over $546,000 in 2020, up from $532,838 in 2019.

Read more: Outlook darkens for Treasury Wine

Lachlan Moffet Gray 9.27am: Bingo Industries profit soars 200pc

Waste management and recycling company Bingo Industries has posted a threefold increase in their full-year profit when compared to 2019 due to cost base management and a slower than expected decline in construction activity

Full year net profit after tax was $66 million, a 196 per cent increase on 2019’s result of $22.3m, while EBITDA was $152.1m, compared to $108m in 2018.

A final dividend of 1.5 cents a share was declared, bringing the total dividend to 3.7 cents, just two cents below the 2019 total dividend.

The result comes after the company withdrew official guidance in March, expecting the coronavirus shutdown measures to impact commercial and industrial waste volumes, which represented 15 per cent of the group’s revenue in the first half of FY2020.

However, Bingo managing director and CEO Daniel Tartak said the lockdown’s impacts on the business was not as large as anticipated.

“We initially experienced a drop in total collections and post-collections volumes in April as restrictions were introduced,” Mr Tartak said.

“Our Commercial and Industrial revenue was down approximately 20 per cent against the first nine months of FY20 as hospitality, entertainment and office activity slowed due to government-mandated restrictions and had recovered to an overall decline of 13 per cent by June 2020.

“Our building and demolition collections operations were significantly less affected as construction programs continued to operate.”

Eli Greenblat 9.22am: Lion calls off dairy sale

Beverages and dairy group Lion has ended the planned sale process of its dairy business to Chinese company China Mengniu Dairy Company.

Lion has agreed to sell its Lion Dairy & Drinks arm to Mengniu for $600m but the deal had been thrown into doubt after Mengniu said it was unlikely to secure approval from the Foreign Investment Review Board process

“Given this approval is unlikely to be forthcoming at this time, Lion and Mengniu Dairy have mutually agreed to cease the current sale process,” Lion said in a statement.

“We are disappointed with this outcome and will now consider pathways forward in relation to the Lion Dairy & Drinks business.”

9.14am: Blackmores plans divestments as profit dives

Vitamin maker Blackmores will sell its Global Therapeutics business as part of a its turnaround plan which includes cutting its headcount by 10 per cent, as its full year profit dives by 66pc.

Handing down its results this morning, Blackmores said the divestment of its powdered supplements arm was due to be complete next month, and discussions were underway for the sale of its Global Therapeutics Chinese herbal medicine unit – bought in 2016 for $23m.

The group said its full year revenue was down 3pc on the prior year to $568m, while underlying full year net profit was down 66pc to $18.1m.

Blackmores aid it would not pay a final dividend, noting that while its cash position was strong, “the continued uncertainty in the current global climate underpins this decision”.

“Despite the additional cost variances which will arise from our first full year of Braeside manufacturing ownership, we anticipate full year profit growth in FY21,” it said.

“This profit growth will come predominantly from the second half of the fiscal year, but given the many uncertainties associated with COVID-19 we are not providing full year profit outlook for FY21.”

Read more: Non-core assets up for sale at Blackmores

Blackmores profit fell by 66pc for the full year. Picture: AAP Image/Joel Carrett.

Nick Evans 9.08am: Alumina earning slump 60pc

Alumina earnings slumped 60 per cent in the first half of the year as the global pandemic hit the sector, booking a half-year net profit of $US90.5m.

But the associated crash in alumina prices helped the company’s struggling Portland aluminium smelter to a thin $US12.7m profit, before interest, tax, depreciation and amortisation, a $US32.2m reversal from the first half of 2019.

Alumina released its first-half financial results on Tuesday, saying its major asset – a 40 per cent share of Alcoa World Alumina and Chemical (AWAC) – had performed well despite the impact of the coronavirus crisis.

Alumina booked a net profit after tax of $US90.5m, after AWAC revenue tumbled 24 per cent on the back of the coronavirus’ impact to the global economy, to $US2.15bn.

9.06am: What’s on the broker radar?

• Aspen Group reinstated Buy – Moelis
• Aventus Group raised to Buy – UBS
• BWX raised to Buy – Moelis
• Fortescue cut to Underperform – Credit Suisse
• Fortescue raised to Neutral, price target raised 50pc to $17.50 – Citi
• G8 Education raised to Buy – Canaccord
• Infomedia cut to Hold – EL & C Baillieu
• NIB raised to Outperform – Macquarie
• oOh!media cut to Neutral – JP Morgan
• oOh!media price target raised 16pc to $1.45 – Macquarie
• Origin Energy raised to Buy – Morningstar
• PTB Group raised to Add – Morgans
• PWR Holdings rated new Buy – Moelis
• Reliance Worldwide price target raised 11pc to $3.65 – UBS
• Somnomed raised to Add – Morgans
• Super Retail Group price target raised 10pc to $11.90 – Citi

Ben Wilmot 8.54am: Scentre crashes to $3.6bn interim loss

Scentre Group, owner of the local Westfield empire, has crashed to a $3.61bn first half loss as it was slugged by heavy writedowns on its mall portfolio.

The company’s profit reversal was driven by write downs on its shopping centres which carved $4.08bn off its property valuations after the first nationwide lockdown then further the blow from Victoria’s stage four lockdown.

Scentre said that in the first half it generated operating earnings of $361m and Funds From Operations of $362m.

The company also took an expected credit charge of $232m related to the financial impact of the COVID-19 pandemic.

During the half Scentre had a gross cash flow of just over $1bn and a net cash surplus of $261m.

In the virus-hit first half the group collected 70 per cent of gross rental billings and for the month of June and July gross rental buildings were more than 80 per cent.

The company is making progress in collecting rent owed during the first lockdown and said that it made agreements with 2438 of its 3600 retailers, including 1620 for small businesses.

8.37am: Ampol swings to a loss

Ampol fell to a deep half-year loss, after border closures collapsed demand for jet fuel and stay-at-home restrictions squeezed gasoline sales volumes.

Ampol, formerly known as Caltex Australia Ltd., reported a net loss of $626 million in the six months through June, compared to a $155 million profit a year earlier. The company reports on a historical cost basis.

On a replacement cost-of-sales basis----which strips out the impact of movements in oil prices by restating the cost of sales using the replacement cost of goods sold — Ampol’s profit was 11pc lower at $120 million.

Ampol took the decision to bring forward and extend a turnaround of its Lytton refinery to May after conditions were badly hurt by the contraction in global fuel demand as a result of the pandemic. This month the company said it would restart the Lytton facility in September, although analysts believe the plant won’t run at full capacity and Ampol wants more options than relying solely on imported products.

“Ampol has performed well in extremely challenging market conditions, with sustained weakness in refining margins, retail fuel volumes and severe demand destruction caused by a range of factors, including restrictions imposed by governments in response to COVID-19 impacting many parts of our business,” said Matt Halliday, who was made permanent chief executive on June 29. He had been acting as CEO since early March.

Directors of the company declared an interim dividend of 25 cents a share, below a payout of 32 cents a year earlier. That represented a payout ratio of 52pc.

Dow Jones Newswires

8.30am: Qube profit slumps 56pc

Logistics company Qube has posted a 56pc fall in full year net profit to $87.5m.

Revenue rose 3pc to $1.9bn.

Qube declared a final dividend of 2.3c per share.

Jared Lynch 7.40am: Ansell lifts profit on PPE surge

Protective glove maker Ansell has recorded a 42.1 per cent surge in full year profit to $US158.7m ($221.52) as it triples the size of its single use gloves business to cater for soaring demand from the COVID-19 pandemic.

Use of personal protective equipment (PPE) has increased significantly during the pandemic to shield people from the highly infectious virus, with masks now mandatory in Victoria and many other parts of the world.

Ansell, which describes itself as the “global leader in the PPE sector” said it had increased its single use gloves threefold during the pandemic through a series of acquisitions.

The demand for PPE and other safety wear fuelled a 7.7 per cent revenue rise to $US1.613.7bn, with chief executive Magnus Nicolin saying Ansell had “strengthen its position” in the protective clothing sector.

“A comparison with our experience during the global financial crisis in 2009 underlines how Ansell has evolved over the last ten years. At that time, the company was much more dependent on mechanical glove categories and other traditional products,” Mr Nicolin said.

“The extraordinary demand for supply this year has been in exam/single use which we have

tripled in size following several acquisitions in recent years as well as life science and body protection, neither of which formed part of our portfolio ten years ago.

“A number of our products are being used in the fight against COVID-19, particularly our exam and single use gloves along with chemical protective clothing which have been tested and certified to recognised standards for protection from infective agents.”

Ansell will pay a full year dividend of US50c, representing a 7 per cent rise on 2019, on September 17.

6.25am: ASX to rise after new Wall St records

Australian stocks are tipped to open higher after gains on Wall Street, where the S&P 500 and the Nasdaq both set new records.

At about 6am (AEST) the SPI futures index was up 40 points, or 0.7 per cent.

Yesterday, shares fought back from early losses as consumer-related stocks rose to fresh heights, helping the ASX to rise 0.3 per cent, its first gain in three days.

The Australian dollar was higher at US71.61.

Spot iron ore is down 1.7 per cent to $US124.45.

6.20am: Wall St up on potential coronavirus treatment

US stocks advanced, giving the S&P 500 another record, as investors’ optimism was buoyed by a potential treatment for coronavirus.

The S&P 500 rose 1 per cent, after closing at a new high. The Dow Jones Industrial Average climbed 1.4 per cent, or 378 points, and the technology-heavy Nasdaq Composite Index rose 0.6 per cent.

The Food and Drug Administration on Sunday said it authorised use of convalescent plasma, the antibody-rich blood component taken from recovered COVID-19 patients, for the treatment of serious coronavirus cases. The emergency-use authorisation falls short of a full approval, FDA Commissioner Stephen Hahn said, adding that the agency will evaluate more evidence.

“Any news that’s positive on the virus is going to drive markets higher, “ said Seema Shah, chief strategist at Principal Global Investors. “However, any news on a vaccine or treatment has to be treated with scepticism, given the process it has to go through before it’s used by the general population.”

The S&P 500’s sharp rally since the spring suggests investors are betting the worst of the economic pain is past and that corporate earnings, the most reliable driver of stock prices, will begin climbing again next year.

On Monday, the rebound boosted some of the hardest-hit industries, including airlines, cruise companies and retailers, all of which are still down by double digits this year.

Investors and economists continue to weigh data on new coronavirus infections in a bid to determine how sustainable any economic recovery may prove. The number of new cases in the US declined Sunday from a day before, reaching its lowest level in more than two months and notching a ninth straight day with fewer than 50,000 new cases.

Overseas, the pan-continental Stoxx Europe 600 climbed 1.6 per cent.

In Asia, shares in Tencent Holdings rose 5.8 per cent in Hong Kong following media reports that the U.S. officials had privately reassured American companies that they could continue to work with its popular social media app WeChat, analysts said.

Dow Jones Newswires

5.50am: TikTok challenges US ban

Chinese-owned TikTok sued the US government in federal court, asserting that it protects its users’ data and challenging President Trump’s executive order that would effectively ban the video-sharing app if it doesn’t find an American buyer for its US operations.

In the lawsuit, filed in federal court for the Central District of California, TikTok lawyers said that the company has “taken extraordinary measures to protect the privacy and security of TikTok’s U.S. user data” and that it has explained those efforts to the federal government during a recent national security review.

“By banning TikTok with no notice or opportunity to be heard (whether before or after the fact), the executive order violates the due process protections of the Fifth Amendment,” the complaint says.

U.S. officials say they are concerned that TikTok, owned by Beijing-based ByteDance Ltd., could pass on data it collects from Americans streaming videos to China’s authoritarian government. TikTok has said it hasn’t been asked to share data with the Chinese government and wouldn’t do so if asked.

TikTok’s platform, filled with goofy user-made dance and music videos, has been downloaded more than 180 million times in the U.S., according to market research firm Sensor Tower.

Earlier this month, Mr. Trump issued an order calling on TikTok’s Chinese owner to divest itself of the video-sharing app’s U.S. operations, setting a 90-day deadline for the transaction to be completed.

Donald Trump, with the TikTok logo. Picture: AFP

Dow Jones

5.45am: American Airlines deploys new anti-COVID spray

American Airlines said it will be spraying its aeroplane interiors with a long-lasting product specifically designed to guard against the coronavirus as it tries to coax passengers back into flying.

The Texas-based carrier said in a statement it will begin using SurfaceWise2, a newly approved antiviral surface coating aimed specifically at killing the virus causing COVID-19.

“In the coming months, American will begin using SurfaceWise2 for electrostatic spraying on surfaces inside its aircraft with plans to use the product throughout its entire fleet, including those in its American Eagle regional partners,” the carrier said.

The United States has seen a plunge in air travel since the coronavirus pandemic struck in mid-March, and airlines have been trying to encourage people to fly again by announcing enhanced cleaning regimes and mandating masks on-board.

AFP

5.40am: European markets surge on vaccine hopes

European stock markets surged on hopes for a coronavirus treatment, while the euro gained against the dollar on continued deadlock over a new US stimulus deal, dealers said.

Looking ahead to a key meeting of central bankers this week, traders sent London’s benchmark FTSE 100 index rallying by 1.7 per cent while major eurozone indices were more than 2.0-per cent higher at the close.

In New York, the Dow Jones index was 1.0 per cent higher in midday trading. On Sunday, US authorities announced that doctors could use blood plasma from recovered coronavirus patients as a treatment against the disease that has killed more than 176,000 in the US.

The move by the Food and Drug Administration comes as President Donald Trump faces intense pressure to curb the contagion that has hobbled the world’s largest economy and clouded his once-promising prospects for re-election in November.

“European markets have kicked off the week in style, with the FDA’s decision to approve the convalescent plasma coronavirus treatment raising hopes that we could see a vaccine fast-tracked before long,” said Joshua Mahony, senior market analyst at IG trading group.

For OANDA analyst Craig Erlam, “markets don’t need much on the vaccine front to get excited. Any positive reports tend to get a big response.”

Hong Kong’s main stock index led gains across Asia, rallying 1.7 per cent with traders cheered by a pledge from China’s banking regulator that it would continue to back the city as a financial hub, after concerns were raised following the imposition of a new security law last month.

Investors will this week be looking for “more clarity” on monetary policy from a virtual gathering of central bankers in Jackson Hole, Wyoming, Ben Emons of Medley Global Advisors said.

Policymakers have already provided a wall of cash to support the global economy during the pandemic, but Federal Reserve chief Jerome Powell’s Thursday speech remains a top attraction.

AFP

5.32am: Total in LNG security deal

French energy giant Total said it had signed a security agreement with Mozambique to protect a major gas project in a restive northern province.

The new memorandum of understanding allows for a so-called Joint Task Force to “ensure the security” of Mozambique’s liquefied natural gas (LNG) project activities across Total’s area of operation in Cabo Delgado province.

Cabo Delgado has been the scene of a jihadist insurgency since 2017 that has killed more than 1,500 people and displaced 250,000 others.

The insurgency has complicated a huge investment project to develop offshore gas reserves, and Mozambican troops along with private security companies have so far struggled to resolve the unrest.

AFP

5.30am: Facebook to pay France back taxes

US social media giant Facebook agreed with the French government to pay 106 million euros ($US125 million) in back taxes for its French operations over a decade-long period from 2009, and to pay 50 per cent more tax in the current year.

“We take our tax obligations seriously, pay the taxes we owe in all the markets in which we operate and work closely with tax administrations around the world to ensure compliance with all applicable tax laws and resolve any disputes,” a Facebook France spokesman said in a statement.

The payment by American digital giants of tax on revenues in the country in which they are accrued has been the subject of a longstanding conflict between France and the United States. Many have their EU headquarters in low-tax-regime countries.

AFP

5.25am: Tesco creates 16,000 jobs

Tesco will create 16,000 permanent UK jobs to meet a surge in online demand for groceries triggered by the coronavirus pandemic, the British supermarket giant said Monday.

Britain’s biggest retailer added in a statement that it expects “the majority” of jobs to be filled by temporary staff drafted in during the pandemic to cope with soaring home food deliveries during the country’s lockdown.

“Since the start of the pandemic, our colleagues have helped us to more than double our online capacity, safely serving nearly 1.5 million customers every week and prioritising vulnerable customers to ensure they get the food they need,” said Jason Tarry, chief executive for Tesco UK and Ireland.

“These new roles will help us continue to meet online demand for the long term, and will create permanent employment opportunities for 16,000 people across the UK,” he added in a statement.

The new permanent positions are in addition to around 4,000 full-time jobs created by Tesco during the pandemic.

Some 47,000 temporary staff joined Tesco at the peak of the coronavirus, most of whom have reached the end of their contracts.

Monday’s announcement came after major UK companies announced thousands of job cuts in recent weeks, notably across the aviation and retail sectors, owing to effects of the coronavirus outbreak.

Tesco is creating thousands of permanent UK jobs to meet soaring online demand for groceries. Picture: AFP

AFP

5.20am: Germany launches first ‘green’ bonds

Germany has announced details of its first “green” bond placing, tapping financial markets to fund environmental projects for the first time.

The finance ministry said it would raise up to 11 billion euros ($US13 billion) in 2020 to support climate-related projects.

The first issue in September of a 10-year bond, or Bund, will have a minimum of four billion euros in volume.

The German government announced late last year that it would launch the bonds in the second half of 2020 as part of its efforts to combat climate change.

The country earmarked 54 billion euros in spending to 2023 as part of a climate package that includes introducing a carbon tax to cut greenhouse gases by 55 per cent by 2030 compared with 1990 levels.

AFP