ASX extends gains to new 9-month high, CBA sells BoCommLife stake
Stocks make 7th consecutive daily gain, hitting another nine-month intraday high on their way to the highest S&P/ASX 200 close since late February.
Welcome to the Trading Day blog for Wednesday, December 9. The ASX extended gains to close 0.6 per cent higher at 6728.5 - its highers close since late February. Overnight the Dow added 0.35 per cent, the S&P 500 added 0.4 per cent and the Nasdaq gained 0.5 per cent. Locally, Westpac released its monthly consumer sentiment survey.
4.44pm: ASX closes highest since Feb
Australia’s S&P/ASX 200 share index finished up 0.6pc at 6728.5 points - its highest daily close since February 26th - after hitting a 9-month intraday basis high of 6745.3.
While losing about 8 points in the closing single price auction, it was another solid rise for the index which has now risen 3.2 per cent in a 7 day winning streak so far this month.
On top of a record 10pc rise last month, it leaves the index rising rapidly since Australia’s world-leading fiscal stimulus in the budget and the start of quantitative easing by the RBA last month.
Coronavirus vaccine and US political developments have arguably lessened medium term economic risks, even as the pandemic has worsened in Europe and the US.
After the US market hit a record high amid encouraging regulatory developments for vaccines and signs of capitulation on fiscal stimulus from Republican leaders, S&P 500 futures rose 0.2pc in Asia after US Treasury Secretary Steven Mnuchin proposed a $US916bn ($1.24 trillion) stimulus package.
The Health care, Tech, Communications, Consumer Discretionary and Utilities sectors outperformed locally, with Healius up 7.4pc on encouraging revenue trends, while CSL rose 2.2pc and Afterpay rose 2.9pc.
Banks were mixed with CBA up 1.7pc and ANZ down 0.4pc, while iron ore miners rose on a new 7.5-year high for spot prices, with Fortescue up 1.6pc.
Westpac’s Consumer Sentiment index for November hit a decade high after hitting a 29-year low in April.
Bridget Carter 4.41pm: FiscalNote hires GS
DataRoom | FiscalNote has hired Goldman Sachs and Bell Potter to work alongside Macquarie Capital on a $1 billion-plus float in the New Year.
The privately held software, data and media company is based in Washington DC and was founded by Timothy Hwang, Gerald Yao and Jonathan Chen in 2013.
While the company largely operates in the United States, it has Australian investors and is not considered to be quite of a large enough size to list on the NASDAQ Composite closer to home.
FiscalNote provides software tools and platforms, data services and news and the Government Relationship Management service, its core revenue-generating product.
It counts blue chip companies among its customers ranging from McDonald’s through to John Deere.
Adeshola Ore 4.28pm: Woolies backs IR changes
The chief executive of Australia’s biggest supermarket retailer Woolworths says the federal government’s industrial relations package will encourage secure employment and certainty for employers.
The changes, which were unveiled today, have sparked backlash from unions and Labor who say it will cut workers’ take-home pay
Woolworths Group chief executive Brad Banducci said he welcomed the reform and its “overarching focus on job creation”.
“The federal government has taken a balanced and pragmatic approach with a range of targeted and incremental changes to improve the system for workers and employers alike,” he said in a statement.
“It’s particularly pleasing to see a mix of measures that will both encourage more permanent, secure employment for workers and provide greater certainty for employers”.
Mr Banducci said the changes to enterprise bargaining agreements would help businesses negotiate improved conditions with their workers.
“The fast-tracking of enterprise agreements will help ensure that conditions voted up by workers can flow through much quicker than they do today,” he said.
“On casual workers, we welcome the clarity provided on the definition of who it includes.”
4.25pm: Softbank heading private: report
SoftBank Group Corp. is looking at taking itself private by gradually buying back shares, Bloomberg reports, citing unnamed sources.
The new strategy would involves repurchasing outstanding shares until founder Masayoshi Son has a large enough holding that he can squeeze out the remaining minority shareholders, Bloomberg said.
Mr. Son owned a 25% stake in the company as of Sept. 30, a corporate filing shows.
Dow Jones
4.09pm: Vaccine a game-changer: Fauci
Anthony Fauci said a vaccine could diminish coronavirus as successfully as the polio vaccine did, enabling workers to return to offices and restaurants in the second half of 2021.
But hurdles exist, the U.S. government’s top infectious-disease expert said. They include people’s hesitancy to get vaccinated, a successful and swift vaccination program, and getting through a rise in Covid-19 cases that is now being fuelled in part by misinformation about the virus, Dr. Fauci said at The Wall Street Journal’s CEO Council Summit on Tuesday.
“There are a substantial proportion of people who do think this is not real, that it’s fake news, or it’s a hoax. This is extraordinary. I’ve never seen this before,” he said. Dr. Fauci added that he will convey the following to President-elect Joe Biden’s administration: “We have all got to be on the same page telling the American public we have to pull together. That, to me, is the most important thing.” Dr. Fauci and Deborah Birx, the White House coronavirus-response coordinator, who also spoke Tuesday at the summit, both reiterated their calls for people to adopt public-health measures to combat the spread of the virus.
Read more: Fauci calls coronavirus vaccine a game changer, decries misinformation
Dow Jones
Bridget Carter 3.55pm: FiscalNote hires GS, Bells for IPO
FiscalNote has hired Goldman Sachs and Bell Potter to work alongside Macquarie Capital on a $1 billion-plus float in the new year.
more to come
Eli Greenblat 3.45pm: Soul Patts eyes the right buys
Washington H Soul Pattinson chairman Robert Millner said the conglomerate still spies buying opportunities in Australian equities where some businesses can be bought at reasonable prices, however the investor is avoiding white hot segments of the market such as buy now pay later fintech plays.
Mr Millner said for the first time in its 117 year history Soul Pattinson had borrowed money to invest and its willingness to pounce on a good deal was reflected in its recent $550 million takeover offer for aged-care provider Regis Healthcare, with that industry unloved at the moment but reflecting attractive economic and demographic trends.
But the investment company would also be happy to take money off the table if the right offer came along, such as a partial sell down in its large shareholding in coal play New Hope announced to the market late Tuesday night that will raise around $75 million.
Addressing shareholders on Wednesday at the company’s annual general meeting, Mr Millner said Soul Pattinson’s long term performance through economic upheavals and the current pandemic stood it out among hundreds of companies on the ASX.
“Washington H Soul Pattinson is now the only company in the top 500 listed companies in Australia to have increased its dividend every year for the last 20 years,” Mr Millner said.
“We are extremely proud of the fact that the company has never missed paying a dividend since listing in 1903. Despite difficult periods such as the GFC and COVID-19, we have been able to continue to grow the dividend paid to our shareholders.”
Speaking to The Australian after the AGM, Mr Millner said investors were living in uncharted territories given COVID-19, low interest rates and working from home but the equity market was something investors could get a return out of.
Joyce Moullakis 1.50pm: Regionals win in new bank rules
Regional banks will be the “real winners” from the banking regulator’s newly-proposed capital framework, according to analysis by Citigroup.
The analysts, led by Brendan Sproules, said among the major lenders Commonwealth Bank was a “relative winner” of the new capital rules, while ANZ was likely to be most impacted.
The Australian Prudential Regulation Authority on Tuesday proposed a new set of rules for the nation’s banks, designed to intensify competition, encourage billions of dollars in additional lending to small businesses and support lower-risk home lending.
But the rules see banks have to hold more capital against higher-risk loans, which could curb their appetite to lend to property investors and younger borrowers.
“APRA’s capital framework is not material to (the) sector’s investment thesis. A
neutral outcome for the sector overall with the regional banks likely to be seen as beneficiaries given the closing of the competitive gap and higher excess capital estimates,” Citigroup’s report said. “For the major banks, the return of dividends and the build of excess capital over the next three years remains on track. This announcement does ‘rule a line’ under
the need for further capital build for the sector.”
The analysis said CBA was well placed to navigate the APRA changes given it had the largest exposure to owner occupied and principal and interest paying mortgages. It highlighted ANZ as the most impacted given its large institutional lending and NZ exposures.
“However, the real winners are the regional banks with a 7 per cent reduction in risk-weighted assets (RWAs),” Citigroup said.
“Regional Banks CET 1 Target (common equity tier one) rises to about 9 per cent, including a board buffer. However, both BEN and BOQ were already pursuing these levels. An estimated 7 per cent reduction in RWAs is likely to lift market estimates of excess capital.”
Ben Wilmot 1.48pm: Amazon to back Melbourne tower recovery
US technology giant Amazon is backing the largest office development play since the coronavirus pandemic struck by anchoring a new $750m tower in the Melbourne CBD.
The Charter Hall Group has just announced its flagship office fund had agreed a pre-lease from a leading global technology company to anchor its new 555 Collins Street office project.
Although the US company is yet to put its name to the tower, it has been widely linked to the property.
While the pair have been locked in backroom talks for months, Charter Hall said it would now kick off construction works on the tower.
The “555” project will comprise one corner 48,000 square metre tower and a second tower of 32,000sq m, with the overall precinct fast-tracked by the Victorian government under its Building Recovery Taskforce earlier in the year.
Accommodating up to 7500 CBD workers, the buildings are being pitched as a future-proofed workplace and are a pointer to other major technology-driven towers driving a recovery, including the new Atlassian headquarters planned in Sydney.
Charter Hall confirmed Lendlease would build the tower following its completion of the “Wesley” at 130 Lonsdale Street, a 60,000sqm premium grade office tower finished in June.
Charter Hall CEO David Harrison said the major pre-commitment provided the momentum for the fund to proceed with construction and advance further leasing interest as it was developed and the market recovered.
Victorian Treasurer Tim Pallas said projects like 555 Collins Street would drive economic activity in the inner-city. It was one of a raft of major projects fast tracked by the Andrews Labor government in April to get building and development projects back up after the pandemic.
Ben Wilmot 1.31pm: Landmark Sydney hotels bought by Moelis
High-flying investment bank Moelis Australia has swooped on the adjoining Kinselas and Courthouse Hotels in Sydney’s Darlinghurst, in a $67m deal as the pace of pub buying in the city shows little sign of abating.
The asset manager and Merivale billionaire Justin Hemmes have led the buying spree in recent weeks as the city shrugs off the woes of the pandemic and the industry prepares for a summer comeback.
Moelis also pointed to longer term plans, saying it had created a consolidated hospitality precinct in Taylor Square at Darlinghurst.
The popular late night pubs will be acquired by the unlisted MA Taylor Square Fund which will be a standalone unlisted fund managed by Moelis, which also runs the Redcape operation which has been buying up gaming pubs.
MAHM CEO Dan Brady said both venues in their own right were quality freehold going concern assets that would benefit from the company’s broad expertise and the reopening of Sydney following the repealing of lockout laws in January.
“Located opposite the fine arts school and previous historic Courthouse, the consolidation of the properties into one large site presents unique development potential and the ability to create a hospitality precinct that aligns with the City of Sydney’s vision of revitalising Sydney’s nightlife and growing creative industries,” he said.
Kinselas Hotel was once owned by the Australian Pub Fund backed by ad man John Singleton and former Qantas boss Geoff Dixon, but they sold in 2017 to Sydney-based Universal Hotels.
12.48pm: Bank figures reveal shopping shift
Westpac bank said its merchant facilities directly processed a record 68 million transactions through the Black Friday and Cyber Monday sales (25-30 November), the highest number ever recorded, and up 5.7 per cent from the same period last year.
The sales add to signs that confidence is returning to the economy.
Westpac said its analysis of merchant trade data shows more people did their shopping on Black Friday this year (13 million transactions), than they did during the Boxing Day sales in 2019 (8 million transactions), showing a major shift in the way Australians do their shopping over the Christmas period.
On Black Friday the state with the highest number of transactions was NSW with 35pc
followed by Victoria (24pc), Queensland (20pc), Western Australia (10pc), South Australia
(7pc), ACT (2pc) and Northern Territory (1pc).
Westpac merchant facilities recorded a significant increase in people shopping at retail
outlets for electronics, home furnishings, appliances, toys and games, books, clothing and
many more.
Westpac’s managing director of cash management, Joanna White, said this year’s Black Friday
sales have given the Australian economy - particularly small and mid-sized business - a well needed cash injection ahead of Christmas”.
12.20pm: Macquarie sees no issue with APRA
Macquarie Group says it is in talks with bank regulator APRA about the implications of proposals of a range of risk weightings for the entire banking industry and how this impacts Macquarie’s capital position. “While these proposals are subject to consultation through 1 April 2021 and finalisation by APRA, based on the current information available, it remains Macquarie’s expectation that it will have sufficient capital to accommodate likely additional regulatory CET 1 capital requirements as a result of the proposed changes,” Macquarie said in an update to ASX. Macquarie noted its group capital surplus was $9.4bn.
On Tuesday APRA outlined proposals for a new set of rules for the nation’s banks, designed to intensify competition, encourage billions of dollars in additional lending to small businesses and support lower-risk home lending. https://bit.ly/2VVKvwo
As part of the changes APRA said banks were not expected to stampede the market to raise more capital. Macquarie last traded at $140.17 a share, down 0.6 per cent.
Melissa Yeo 11.55am: Flat start for Cluey
Online education platform Cluey was flat in its ASX debut, after raising $30m in its IPO.
In the first hour of trade, shares were trading at $1.23, marginally aboveits IPO offer price of $1.20. The group, led by chief Mark Rohald, said the funds would support its student growth strategy and any potential acquisitions. At IPO the group, with ticker CLU, has a total enterprise value of approximately $100.7m and a market cap of $143.5m.
11.44am: ASX extends rise to 0.8pc
Australia’s S&P/ASX 200 share index hit a fresh nine-month high of 6742.5 after extending its intraday rise to 0.8pc as US futures remained perky.
US futures are buoyant after encouraging coronavirus vaccine news overnight and a US fiscal stimulus proposal from Treasury Secretary Steven Mnuchin after the US close.
While WTI crude oil futures haven’t lifted at all, S&P 500 futures have been up as much as 0.3pc on US stimulus hopes, even though a package like the $US906bn proposed by Mnuchin shouldn’t surprise.
Australia’s share market is well on its way to recording a 7th consecutive daily gain, its first since a 6.8pc rise during a seven-day winning streak ending October 13.
Traders will be looking to see if recent highs around 6713/14 now offer support for a potential rise to the next chart point around 6900.
Gains continue to be led by defensive and growth sectors including Health Care and Tech, albeit Consumer Discretionary is also outperforming.
Among standouts, Healius is up 5pc after encouraging revenue guidance, Ansell is up 4.7pc, Altium has risen 3pc and Amcor is up 2.8pc.
ASX200 last up 0.7pc at 6743
Ben Wilmot 11.36am: Stockland unloads four retirement villages
Diversified property group Stockland has sold four retirement villages to fund manager Prime Value Asset Management in an $89 disposal that showed a discount of about 10 per cent to their June book value.
Three of the villages are more than 30 years old, with the average age being 28 years, and the transaction will see Prime Value buy Cameron Close Retirement Village in Melbourne’s east, Bundoora Retirement Village and Latrobe Retirement Village in Melbourne’s north-east, and Long Island Retirement Village in Seaford. The four villages will be operated by Centennial Living following completion of the sale.
Stockland Communities CEO Andrew Whitson said the sale aligned with the company’s active capital recycling strategy, as the company focuses on reshaping its portfolio and looks at opportunities to reinvest in its land lease estates and across its broader business.
Prime Value manages about $1.5bn of investor funds across a range of equities, income securities, property and alternative assets. Centennial Living is an Australian retirement living operator, with strong experience in managing and operating retirement villages.
11.00am: Big stag profit for Aurumin
Another day, another big stag profit for an IPO.
Aurumin shares opened at $0.35 versus an IPO price of $0.15.
Shares in the gold explorer were last trading at $0.29.
Patrick Commins 10.50am: Sentiment has ‘fully recovered’
Consumer confidence surged again in December to reach a decade high, as Victoria’s reopening added further impetus to a rebound in sentiment that has far outpaced previous recessions.
Westpac-Melbourne Institute’s monthly confidence index jumped 4.1 per cent to 112 points, according to the latest survey, as households were buoyed by news the economy grew strongly over the three months to September and following a strong of positive news around a vaccine becoming available early next year.
Westpac chief economist Bill Evans said “after only eight months the evidence seems clear that sentiment has fully recovered from the COVID recession”.
The latest reading of consumer sentiment comes a day after NAB”s survey showed businesses were at their most confident since the start of 2018 – again, as Victoria’s reopening led to a “snapback” in the mood among the state’s corporate community. Economists see the strong gains in business and now consumer confidence as further evidence that the economy’s recovery will extend into the New Year, with analysts predicting growth of around 2 per cent in the December quarter.
10.41am: White House in new $US916bn stimulus plan
US Treasury Secretary Steven Mnuchin has unveiled a new $US916 billion pandemic aid proposal, aiming to break a months-long deadlock in Congress over additional aid to the coronavirus-ravaged US economy.
The proposal, slightly larger than a $US908 billion measure unveiled by a bipartisan group of senators last week, would include “money for state and local governments and robust liability protections for businesses, schools and universities,” Mr Mnuchin said in a statement.
Those elements all have been key sticking points in the negotiations between Democratic and Republican lawmakers.
Mr Mnuchin said he presented the proposal to Democratic House Speaker Nancy Pelosi on Tuesday evening, and also reviewed it with outgoing president Donald Trump and Republican Senate Majority Leader Mitch McConnell.
Democrats and Republicans in Congress along with the Trump administration have been unable to agree for months on a successor bill to the $US2.2 trillion CARES Act rescue package passed earlier this year to support the American economy.
That bill included loans and grants for small businesses, $US1200 payments to all Americans, and an expansion of the unemployment safety net, programs seen as preserving US jobs as the country struggled with the world’s largest coronavirus outbreak.
AFP
Adeshola Ore 10.35am: Tech giant move ‘sensible and fair’
The chief executive of one of Australia’s biggest media companies says the federal government’s news media bargaining code is in the best interests of all Australians.
The proposal, which the federal government unveiled on Tuesday, will force Google and Facebook to pay for news content and share data collection methods with media companies and public broadcasters.
Seven West Media chief executive James Warburton said the Morrison government should be congratulated for the “pioneering and innovative” framework.
“It’s a sensible and fair proposal, as it should be. The revised code provides the concessions to the digital platforms that they have been asking for,” he said in a statement.
“There’s now no reason for Facebook or Google to be unwilling to negotiate fair agreements. Australians will be the winners under the code, with local media businesses that produce local news and content and support local jobs now provided with a pathway to a sustainable future.”
10.32am: Aged care remains attractive: Macquarie
Macquarie Equities David Bailey argues that the longer-term fundamentals for the residential aged care sector remain attractive despite a challenging operating environment recently due to COVID.
“Increased government funding represents potential upside, and recent corporate activity is an additional consideration,” he says.
He says Estia Health is best positioned and lifts his rating to Outperform from Neutral while staying Neutral on Japara and Regis.
Perry Williams 10.30am: Coleman exit ‘raises risks’ for Woodside
The exit of Woodside CEO Peter Coleman was a sudden announcement that surprised the market and has raised risks over the company’s strategy, Ord Minnett said.
The broker downgraded Woodside to hold from accumulate with uncertainty over the company’s Burrup Hub gas expansion plan in Western Australia given Mr Coleman looks likely to depart ahead of a final investment decision on the $16bn Scarborough gas project.
“The announcement does provide some uncertainty over Woodside’s development plans in the Burrup Hub. We would also question whether Woodside would consider other corporate activity during this transition period at a time when interests in the North West Shelf and Pluto joint ventures are changing,” Ord Minnett said.
Project execution also looks tricky given ongoing joint venture negotiations with the North West Shelf.
“Woodside management indicated on the conference call that Scarborough had been deliberately delayed last year in order to achieve better commercial terms. With several JV partners looking to sell out – notably Chevron selling out of the North West Shelf JV - negotiations over backfill are likely challenging. Furthermore, Woodside also plans to reduce its interest in assets such as Pluto Train 2 and, potentially, Scarborough.”
Citi described the timing of Mr Coleman’s exit, expected in the second half of 2021, as inconvenient given looming major decisions on Scarborough.
“We think this timing is inconvenient because a new CEO may not be afforded the opportunity to redirect the strategy before final investment decisions are taken. In fact, CEO Coleman will continue to progress the projects towards FID with key commercial decisions, such as a Scarborough-Pluto tolling agreement, expected to be concluded during 1H21,” Citi said.
Cliona O’Dowd 10.23am: Infratil bid ‘credible’
One of Infratil’s largest shareholders says the infrastructure investor should engage with AustralianSuper on its $5.1bn bid for the company.
“This is an indicative bid from a credible and well-funded bidder, at a solid premium to the pre-offer share price and analyst valuations,” the head of equities at Accident Compensation Corporation’s investment team, Blair Cooper, said.
“This meets the threshold to warrant Infratil constructively engaging to allow Australian Super to put forward its best offer,” he said.
Accident Compensation Corporation holds more than 5 per cent of Infratil.
Mr Cooper’s comments come after Infratil earlier rebuffed the $180bn super fund’s takeover offer, rejecting it as “materially undervaluing Infratil’s high quality and unique portfolio of assets on a control basis”.
10.21am: ASX at nine-month high as US futures rise
Australia’s share market jumped to a nine-month high in early trading after offshore gains on coronavirus vaccine developments and a rise in US futures on fiscal stimulus hopes.
The S&P/ASX 200 rose 0.6pc to a 6725.2 - its highest since February 26 - after breaking Monday’s high at 6714.7.
A sustained break of this level would target 6900 on the chart.
S&P 500 futures opened up 0.3pc after US Treasury Secretary Steven Mnuchin pitched a $US916bn ($1.24 trillion) stimulus deal to House leader Nancy Pelosi.
Australian share market gains were led by the Health Care, Tech, Consumer Staples sectors, with Real Estate, Energy, Financials and Industrials lagging behind.
Healius jumped 6pc after reporting strong revenue growth in October and November and plans for a $200m share buyback next year.
Iron ore miners including BHP, Rio Tinto and Fortescue rose 0.8-0.9pc after the spot price hit a 7.5-year high.
Perry Williams 10.05am: LNG price controls ‘could backfire’
A proposal by the Morrison government to introduce formal price controls for Australia’s big east coast LNG exporters could backfire significantly and damage international investment, consultancy EnergyQuest says.
A draft heads of agreement sent to Queensland’s three LNG producers has included reference to a pricing mechanism following sustained pressure from Australia’s big manufacturers for cuts to their gas costs, The Australian reported on Friday.
The move could have serious repercussions, EnergyQuest says.
“This kind of policy is more common in third-world countries. Given that most LNG is sold at oil-linked prices, which are generally higher than oil-linked prices, this could require LNG producers to subsidise domestic users. It could also mean that producers are required to sell below cost to domestic buyers,” EnergyQuest chief executive Graeme Bethune said.
“This policy could backfire significantly. It would likely impact on ongoing CSG drilling, with negative implications for east coast domestic gas supply. It could also have international repercussions, given the significant Chinese investment in east coast LNG. There have also been cases where domestic manufacturers with gas contracts at low prices have on-sold their gas to LNG producers.”
The competition regulator and major gas buyers say Australia’s big east coast LNG exporters have nothing to fear from the potential introduction of formal price controls, arguing the move is justified to ensure a fair price for domestic users.
Eli Greenblat 10.00am: Treasury downgraded after China hit
Goldman Sachs analyst Andrew McLennan has downgraded his earnings outlook for winemaker Treasury Wine Estates in the wake of the tariffs slapped on all Australian wines imported into China, and has lowered his price target for the stock to $8.60 from $9.30 previously.
In a note to clients on Wednesday, Mr McLennan said China’s decision to apply a temporary tariff on Australian bottled wine imports puts Treasury Wine’s short term earnings under significant risk as the company seeks to reallocate significant volumes to other
markets.
“While we assume the tariff is currently a temporary deposit applied in our forecasts for nine months, we also assume that Treasury Wine responds with a permanent shift in strategy towards a more balanced regional expansion program.”
He said Treasury Wine has detailed its strategic redirection post the tariff announcement, noting it will put earnings, cash flow and the balance sheet through a period of elevated pressure as the company adjusts the timing and flow of inventory across other
regions.
“We believe reduced vintage intake and delayed sales will require careful calibration to minimise pressure on cash and EBITS margins without leading to inventory obsolescence.”
Goldman Sachs has revised down group EBITS forecasts by 28.2 per cent and 14 per cent
respectively over 2021 and 2022.
“Our 12-month Target Price is revised to $8.60, and we maintain our ‘Neutral’ recommendation,” Mr McLennan said.
Earlier this month China announced a range of tariffs aimed at Australian imported wine, including those made by Treasury Wine and popular in China such as Penfolds, with a tariff of 169.3 per cent. Many other winemakers were hit with a tariff of more than 200 per cent.
9.56am: Citi boosts targets for miners
Citi has boosted its target prices for a heap of Australian miners after a mark-to-market exercise after recent commodity price gains.
“We believe there is not significant upside in 2021 from current levels – $US7500/t copper, $US2000 ali/t, $US115/t iron ore, $US1900/oz gold – but these prices are the highest in years and generally imply strong earnings and free cash flow, especially in iron ore,” says Citi’s Paul McTaggart. It follows a similar mark-to-market exercise in the iron ore space from Macquarie Equities on Tuesday.
While cutting Fortescue Metals to Neutral, Citi’s McTaggart has put through double-digit percentage price target increases for Alumina, BHP, Fortescue, Galaxy, Mount Gibson, Orocobre, Oz Minerals, and Western Areas.
His Rio Tinto target rose by 9pc and he also pushed up Pilbara Minerals’ target up a whopping 119pc.
David Swan 9.45am: Uber confims flying taxi sale
Ride share giant Uber has confirmed it will sell its flying taxi business Uber Elevate to California-based Joby Aviation for an undisclosed sum.
As The Australian previously reported, the sale marks a sharp pivot from the ride-sharing giant’s sky-high plans, first detailed in 2016, that featured Melbourne as the program’s first international city. Uber had promised a 19km journey from the CBD to Melbourne airport would take just 10 minutes, compared to up to an hour by car.
As part of the deal, Uber will invest $US75m into Joby Aviation. It invested $US50m into Joby earlier this year as part of Joby’s Series C funding round.
The deal means Joby will be able to use Uber’s app for “flying taxi” rides whenever they become available, which could be as soon as 2023.
“Advanced air mobility has the potential to be exponentially positive for the environment and future generations,” Uber chief executive Dara Khosrowshahi said in a statement.
The Australian has sought further comment on what the transaction means for Uber Elevate’s Melbourne plans. The deal comes one day after Uber agreed to sell its autonomous car division.
9.42am: Magellan records institutional outflow
Magellan Financial has reported its first institutional outflow of funds under management since May.
Total FUM rose $26m to $103bn in November, with net retail inflows of $174m and net institutional outflows of $148m. Excluded from the retail inflow calculation was $258m of distributions net of reinvestment in the month.
Eli Greenblat 9.40am: Coles, TWU in gig economy charter
Coles and the Transport Workers Union have signed a charter on standards in road transport and the gig economy focusing on safety, driver education and mental health.
The charter commits that Coles and the TWU will work collaboratively to ensure high standards on safety and fairness throughout the supply chain as a way to ensure positive health and safety outcomes.
In a statement on Wednesday, Coles said this includes a formal consultation process between the TWU and Coles to ensure an ongoing emphasis on safety and to establish mechanisms through which safety issues can be identified and addressed.
“Coles and the TWU will also work together on safe and fair outcomes for workers in the rapidly-growing gig economy,” Coles said.
It comes as the treatment and working conditions of gig economy workers becomes increasingly debated across the country. Amid a massive growth in people engaged in these types of work practices, some have fallen through the cracks between permanent, part time and casual employment definitions and outcomes.
9.33am: IGO in lithium buy, $766m raise
IGO confirms it has an agreement to buy a 49pc stake in Tianqi Lithium Energy Australia from Tianqi Lithium, via a subscription for news shares in Lithium Holdco.
The moves, flagged by The Australian’s DataRoom, will give IGO with a 24.99pc indirect interest in the Greenbushes Lithium Mining - the world’s biggest - and processing operation (Greenbushes) and a 49pc indirect interest in the Kwinana Lithium Hydroxide Plant in WA.
The price tag is $US1.4 billion ($1.9 billion). Lithium HoldCo will become the exclusive vehicle for all lithium related investments for IGO and Tianqi outside of China.
IGO intends to fund the transaction through a combination of $1,100 million new debt facilities, an equity raising of up to $766 million, and existing cash reserves of between $85 million and $149 million.
The raising comprises a $446m institutional placement and $320m entitlement offer at $4.60/share - a 10pc discount to its last traded share price.
Cliona O’Dowd 9.30am: Perpetual hails ‘growth opportunities’
Perpetual is a materially different business with improved growth prospects following the Trillium and Barrow Hanley transactions completed this year, according to Perpetual boss Rob Adams.
“We now have greater diversity - by business line, by geography, by asset sector and, importantly, by asset channel,” Mr Adams told shareholders at the company’s investor day on Wednesday.
“Through these transactions Perpetual now has a far greater array of positive growth opportunities,” he said.
Mr Adams also pointed to outperformance by the wealth manager’s Australian equities team in recent months, as he commented on the recent shift in the market toward value stocks.
“Since July 1 our Australian equities performance has improved materially. And it’s a relief to see this long run of growth winning over value possibly coming to an end.”
Trillium’s two Australian strategies, which it launched in the local market in August, have also seen “exceptional performance,” Mr Adams said.
Eli Greenblat 9.28am: Best & Less posts sales gains
The private equity-backed general merchandise retailer Best & Less, which includes the Postie chain in New Zealand, says it generated sales revenue in the year to November of $629m, with year-to-date like-for-like growth of 13.5 per cent.
Bought by Allegro Funds last year from the teetering Steinhoff International, Best & Less Group said its online sales for the 12 months are up 80 per cent to $57 million, representing 9.1 per cent of total sales.
Best & Less Group chief executive Rodney Orrock said the performance over the past year was a huge achievement for the team, particularly given the unforeseen challenges of COVID-19.
“While the business was experiencing strong sales before the pandemic, it has provided a strong tailwind as customers increasingly focused on value. We’re thrilled to be recognised as one of Australia’s top 10 most trustworthy brands during COVID times, and believe consumer demand for our proposition of ‘twice the quality at half the price’ is here to stay.”
Best & Less Group said it has 246 profitable stores and a fast growing and profitable online channel, which continues to increase its share of the $26 billion-plus apparel and footwear market on both sides of the Tasman.
Between 2017 and 2020, online sales have grown 50 per cent in terms of compound annual growth rate, as the business investment in digital initiatives including click and collect.
The local subsidiary of Steinhoff, Greenlit Brands, sold off a range of businesses including Best & Less and plus-sized women’s brands Postie to Allegro in 2019 as part of the clean up of the Steinhoff operations in the region.
9.20am: CBA set to get $886m from BoCommLife sale
Commonwealth Bank of Australia said China’s banking regulator had approved the sale of its stake in BoCommLife Insurance Company Ltd.
Australia’s largest bank said it expects to receive $886 million from the sale of its 38pc stake to MS&AD Insurance Group Holdings Inc.’s Mitsui Sumitomo Insurance Co. The lender expects the sale to complete by December 31.
Commonwealth Bank said it expects a total increase in unaudited post-tax statutory earnings related to the completion of the BoCommLife stake and other divestments of about $840 million. It will recognize the increase as a non-cash item in its 1H results for fiscal 2021, which are due February.
The transactions will generate a pro-forma increase to the bank’s Common Equity Tier 1 capital ratio of 29 basis points, it said.
Dow Jones
9.16am: Charter Hall trust raising $250m for buys
Charter Hall Long WALE REIT said it is raising $250 million to help fund the purchase of three properties in eastern and northern Australia.
Charter Hall Long WALE REIT said it has agreed to buy 76-78 Pitt Street in Sydney via a sale and leaseback to Telstra Corp for $281.5 million and will also buy a new Bunnings property to be developed in Caboolture, Queensland, for $28.1 million.
Charter Hall Long WALE REIT has also completed the acquisition of a 49.9pc interest in an Endeavour Group-leased pub in Darwin for $9.8 million.
New securities will be placed with institutional investors at a fixed price of $4.65 each, representing a 3.3pc discount to the stock’s closing price of $4.81 on Tuesday.
Dow Jones Newswires
9.08am: Syrah halted for raising
Syrah Resources has requested a trading halt ahead of a proposed capital raising.
8.57am: What’s impressing analysts?
Adore Beauty started at Neutral: $6.20 price target: UBS
Alumina price target raised 22pc to $2.20: Citi
Ansell raised to Hold: Morningstar
BHP price target raised 14pc to $45.70: Citi
Deterra cut to Sell: GS
Estia Health raised to Outperform: Macquarie
Fortescue cut to Neutral: price target raised 14pc to $21: Citi
Galaxy Resources price target raised 22pc to $2.50: Citi
Jumbo Interactive started at Neutral: $14.10 price target: UBS
St George Mining cut to Speculative Hold: Bell Potter
Mount Gibson price target raised 15pc to $1115: Citi
Orocobre price target raised 47pc to $2.50: Citi
OZ Minerals price target raised 25pc to $19.80: Citi
Pilbara Minerals price target raised 119pc to $0.70: Citi
Rio Tinto price target raised 9pc to $125: Citi
Western Areas cut to Neutral; price target raised 13pc to $2.65: Citi
Vital Harvest cut to Hold: Bell Potter
Woodside cut to Neutral: JPM
Zip Co raised to Hold: Morningstar
8.42am: ASX rally ‘has more fuel in the tank’
Australia’s share market should rise for a seventh consecutive day and may hit a fresh nine-month high.
Overnight futures relative to fair value suggest it will open up 0.4pc at 6714.5, near a nine-month high of 6714.7 it reached Monday.
The reaction to this chart point could have some bearing on whether the index tests support at 6500 or the next resistance level at 6900 in the short term.
The 20-year average performance of the index this month is a 2.6pc rise, yet the index is only up 1.2pc month to date.
November saw a record 10pc rise for the index. Still, history shows it normally keeps rising for a few months after such a massive gain.
“The huge cash balances still on the sidelines say this is not over, plus don’t forget what happens when all the money in ‘safe’ bonds gets switched from bonds to equities in 2021,” says Bell Potter’s Richard Coppleson.
“Make no mistake - this rally has plenty more fuel in the tank. With the vaccine and reopening of economies worldwide, green shoots that will appear across the globe in 2021.”
Iron ore miners should rise after the spot price rose 1.6pc to a 7.5 year high of $US149.95.
BHP ADRs equivalent close at $42.52 was 0.6pc above its close in Sydney.
Energy, Health care, Materials, Consumer Staples, Tech and Consumer Discretionary stocks outperformed on Wall Street.
Tianqi Lithium confirmed it plans a 49pc sale of its Australian unit, owner of the Greenbushes Lithium mine, to IGO for $US1.4bn ($1.9bn) cash.
8.15am: S&P 500, Nasdaq close at new records
US stocks rose in afternoon trade, pushing the S&P 500 and Nasdaq Composite to fresh records, amid a pair of positive steps toward combating the COVID-19 pandemic.
Health-care stocks rallied, alongside a turnaround of shares of technology companies amid news that the UK began administering doses of the vaccine developed by Pfizer and Germany’s BioNTech. Shares of Pfizer led the sector, rising 3.2 per cent to set a new 52-week high.
Signs that lawmakers remain committed to finalizing a new Covid-19 relief package also gave the stock market a boost. Bloomberg reported that Republican congressional leaders planned to talk with White House officials in an effort to advance the talks around a roughly $US900 billion COVID-19 aid deal. Tech stocks had been in the red prior to the report and steadily gained ground in the second half of the session.
Investors have been closely following the talks in hopes that Republicans and Democrats reach a deal on further stimulus. Without some sort of agreement, many worry that the nascent economic recovery is at risk as coronavirus infections, hospitalizations and deaths rise across the country, leaving a high-flying stock market exposed to a pullback.
The emergency-relief package is “necessary to help the businesses that are suffering right now,” said Gero Jung, chief economist at Mirabaud Asset Management. “There’s been a significant slowdown in labor market improvement so there is still some help needed. It is important; it affects market sentiment.”
The S&P 500 added 0.4 per cent, while the Nasdaq rose 0.5 per cent, putting both ahead of their records from Friday. The Dow Jones Industrial Average also traded higher, gaining 104 points to 30174, but remained just short of a new milestone.
Lawmakers had struggled Monday to resolve one of two big stumbling blocks remaining in their efforts to strike a deal on the emergency-spending program. Congressional leaders said they plan to pass a one-week extension of the government’s current funding to buy more time for negotiations on both bills.
Despite the rise in coronavirus cases, the U.S. stock market has managed to rally to new heights thanks to advances on the vaccine front, as well as brief signs of progress toward completing another economic aid package. The S&P 500 is up 15 per cent this year, with the most recent spurt of gains following news of Pfizer’s vaccine.
Investors remain bullish about next year, pinning their hopes for further gains on a rebound in corporate earnings, analysts have said. If COVID-19 cases reach a tipping point, analysts say they will have to revise their forecasts.
“There is this push and pull between how we’re so nearly there in terms of good news on the vaccine and seeing the end of this, versus another hit to economic output if the vaccine hasn’t happened yet when we get another rise in cases,” said Georgina Taylor, a multiasset fund manager at Invesco. “It is still a real concern for markets.”
Dow Jones Newswires
7.05am: ASX set to open higher
Australian stocks are poised to open higher, heading for a seventh straight day of gains, as world markets were mostly higher amid vaccine rollouts and US stimulus hopes.
At around 7am (AEDT) the SPI futures index was up 30 points, or 0.4 per cent.
Yesterday, Australian stocks managed to post a gain for the sixth day in a row.
The Australian dollar is down at US74.09.
Iron ore has risen again, by 1.6 per cent to near eight-year highs at $US149.95 a tonne.
Brent oil is up 0.1 per cent at $US48.84 a barrel.
6.55am: Musk says he’s moved to Texas
Tesla chief executive Elon Musk said he has moved to Texas, becoming one of the highest-profile executives yet to leave Silicon Valley during the coronavirus pandemic.
He said the move had been in the works for months and lamented California, saying the state had become complacent with its innovators and taken them for granted.
Mr. Musk made the comments during The Wall Street Journal’s CEO Council annual summit, in an interview with Editor in Chief Matt Murray.
Startup executives and employees have fled the San Francisco Bay Area for cheaper locales since the pandemic has led to remote working conditions. Last week, Hewlett Packard Enterprise, whose origins trace back to the founding of Silicon Valley, has said it plans to shift its headquarters to Texas. The exodus has led many tech leaders and industry watchers to question whether the geographic region is losing relevance as a tech hub.
Mr. Musk threatened to move Tesla’s operations out of California while sparring with authorities there in May, after local shelter-in-place orders required him to shut down his lone U.S. car factory as part of measures to slow the spread of the virus. He criticized local officials at the time as “breaking people’s freedoms” by imposing the curbs.
Dow Jones
6.48am: Infratil rejects AustralianSuper offer
New Zealand-based infrastructure investor Infratil has rejected a $5.1bn offer by AustralianSuper, saying it undervalues its assets.
Australia’s largest super fund, with $180bn in assets under management, on Tuesday said it had put forward a proposal to acquire all of dual-listed Infratil’s shares for a total value of $NZ7.43 ($7.04) per share.
The indicative, non-binding offer consists of $NZ5.79 per share in cash and an in-specie distribution of Trustpower shares to Infratil shareholders, meaning Infratil’s current holding in Trustpower, a New Zealand-based power company, would pass to its shareholders.
Alongside the cash component, Infratil shareholders would receive an in specie distribution of 0.2210 Trustpower shares per Infratil share.
Infratil confirmed the offer on Wednesday but rejected it as “materially undervaluing IFT’s high quality and unique portfolio of assets on a control basis”.
Infratil also pointed to conditions related to Foreign Investment Review Board and Overseas Investment Office approvals in Australia and New Zealand “and considers that there are other aspects of the proposal that are unattractive to IFT shareholders”.
“The IFT board will consider any proposal to maximise shareholder value, but given the significant deficiencies in the proposal, no further engagement is planned at this time.”
6.12am: Boeing hit by more cancelled MAX orders
Boeing received additional order cancellations for its 737 MAX jet in November, company data showed, even as the plane readies to resume commercial flights this month.
Boeing reported 63 net cancellations for the MAX last month, adding to the growing tally following two deadly crashes that caused the aircraft’s worldwide grounding.
US air regulators last month approved the MAX to return to service following upgrades, a move Brazil’s civil air regulator followed a week later.
AFP
6.10am: Slow recovery from Covid slump: World Bank
It will take two to three years for global output to return to pre-pandemic levels as many developing nations slowly climb out the coronavirus-induced slump with the help of vaccines, World Bank President David Malpass said.
While advanced economies are recovering more quickly than projected, many developing economies have lagged behind as tourism declined and remittances from their workers based in rich countries dried up, he said in an interview at The Wall Street Journal’s CEO Council summit.
And even in the developing world, the recovery has been uneven.
“ China is in recovery, and that helps its neighbors, so in Southeast Asia, there has been more of a recovery underway that extends to Japan,” Mr. Malpass said. “For other developing countries, advanced economies are the most important variable because that’s often where their markets are.”
The International Monetary Fund projected in October that the world economy would contract by 4.4pc this year, not as much as the 5.2pc drop it had forecast in June but still the most severe downturn since the Great Depression. World output will grow 5.2pc in 2021, down from an earlier estimate of 5.4pc. China will be the only major economy to grow this year, the IMF has projected.
Dow Jones
5.20am: US stocks wobble amid stimulus gridlock
Major US stock indexes fluctuated between small gains and losses, as lawmakers continued their haggling over the fine points of an economic package to combat the latest surge in COVID-19 cases.
In New York lunchtime trade the Dow Jones Industrial Average was up 0.4 per cent to 30187. The broader S&P 500 edged up 0.3 per cent, while despite weakness among technology stocks, the Nasdaq Composite was up 0.25 per cent.
Analysts said investors appeared to tamp down their buying of stocks over the past two trading sessions, putting a recent rally in equities on hold that has pushed the S&P 500 up about 10 per cent since the end of September. The problem, analysts say, is that a multiweek spike in COVID-19 infections and hospitalisations has diminished investors’ prospects of a quick economic recovery.
With cases rising across nearly every state in the US, several economists and investors say fresh fiscal stimulus from Congress is needed to keep the economy afloat.
“The lack of corporate news near term, combined with a focus on stimulus talks and Covid cases could make near-term moves higher more difficult,” said Lindsey Bell, chief investment strategist at Ally Invest.
Lawmakers struggled to resolve one of two big stumbling blocks remaining in their efforts to strike a deal on the emergency-spending program. Congressional leaders said they plan to pass a one-week extension of the government’s current funding to buy more time for negotiations on both bills.
Despite the rise in coronavirus cases, the US stock market has managed to rally to new heights thanks to advances on the vaccine front, as well as brief signs of progress toward completing another economic aid package.
Investors remain bullish about next year, pinning their hopes for further gains on a rebound in corporate earnings, analysts have said. If COVID-19 cases reach a tipping point, analysts say they will have to revise their forecasts.
Tesla, meanwhile, fell 2.4pc in recent trading after saying it would sell up to $US5 billion of shares over time. Shares of Uber declined about 0.2pc after the ride-hailing service sold its self-driving car business to a rival.
Overseas, the pan-continental Stoxx Europe 600 ticked down 0.1pc as investors waited for developments on the Brexit trade-talks.
Across Asia, most major benchmarks closed down. The Shanghai Composite Index declined 0.2pc and Hong Kong’s Hang Seng Index slipped 0.8pc.
Dow Jones Newswires
5.05am: UK begins vaccine rollout
The UK became the first Western country to start distributing a COVID-19 vaccine to its population, rolling out a mass inoculation program that could provide a template for other countries, including the US, of the practicalities and potential pitfalls of vaccinating at speed and scale.
Less than a week after Britain granted emergency-use authorisation for the two-dose vaccine developed by Pfizer Inc. and Germany’s BioNTech SE, the first people began to receive it across the UK on Tuesday.
Those over 80 years old, nursing-home workers and other high-risk healthcare staff were front of the line: a group estimated to number six million. The rollout is being paid for by the U.K.’s state-funded National Health Service and modelled on its annual flu-vaccination campaign.
Ninety-year-old Maggie Keenan was the first to receive the initial dose as part of the program, according to the NHS.
“It’s history and the best thing that’s ever happened. If I can do it, so can you,” she said at University Hospitals Coventry and Warwickshire, central England, wearing in a mask and a Merry Christmas T-shirt.
Dow Jones
5.00am: Markets await Brexit, stimulus developments
Equities turned in a mixed performance in cautious trade amid vaccine rollouts and US stimulus hopes.
The pound slumped for a second day running with post-Brexit trade talks on a knife-edge.
And the yen dipped against the dollar after Japan’s government approved more than $US700 billion in fresh stimulus to fund projects from anti-coronavirus measures to green tech.
Meanwhile the euro climbed on data showing German investor confidence rebounded in December, buoyed by hopes that vaccines -- expected to win approval for general use in the EU imminently -- could help end the coronavirus pandemic.
In Europe, the “major indices are mixed as uncertainty is circulating with respect the UK-EU trade situation,” said market analyst David Madden at CMC Markets UK.
Both London and Frankfurt ended the day with the slightest of gains, while Paris dipped.
Britain on Tuesday made a gesture of good faith by withdraw controversial elements of a legislative package concerning the future border in Ireland.
Madden said “that should help create an environment for a potential deal to brokered.”
British Prime Minister Boris Johnson was preparing to travel to Brussels later this week for talks. With the two sides divided over fishing rights, rules for fair trade and an enforcement mechanism for regulatory standards, there is a growing fear a deal will not be done before the December 31 deadline.
“Risk appetite is struggling to find direction amid Brexit headlines, rising COVID-19 case counts, and possible further US sanctions on China on the one hand and hopes for US fiscal stimulus and US vaccine approval,” said Axi strategist Stephen Innes.
“Investors are pinning their hopes on the ultimate holiday stocking stuffer, which is the capacity for (US) stimulus overwhelming a near-term downturn.”
Analysts meanwhile said that the next leg-up for equities would be news that US lawmakers had finally reached an agreement on a new rescue package for the battered economy.
Democrats have largely thrown their support behind a bipartisan proposal worth $US908 billion while there is optimism Republicans will eventually come on board.
AFP
4.58am: Goldman moves to buy 100pc of China JV
Goldman Sachs moved to acquire the remaining stake in a China securities joint venture as it eyes further growth in the world’s second biggest economy.
The US investment bank said it reached agreement with its Chinese partner to acquire another 49 per cent of the 17-year-old association.
Beijing previously limited foreign firms to minority status, but the “phase one” trade deal President Donald Trump signed early this year opened the door to financial firms to take control of their operations.
“We are pleased to announce that the firm has commenced the formal process of acquiring 100 per cent of our China joint venture, Goldman Sachs Gao Hua (GSGH),” Goldman executives said in a message to employees.
“The process has been initiated with regulators and we have signed a definitive agreement with our joint venture partner to acquire all of the outstanding shares in GSGH that we do not already own.”
The step signals the latest opening of China to Wall Street heavyweights, who have long sought a greater presence in China.
JPMorgan Chase was granted a majority stake in its China trading venture in December 2019, followed in March by similar shifts at Goldman and Morgan Stanley.
The new entity will be called Goldman Sachs (China) Securities Company Limited, according to the letter from Chief Executive David Solomon and two other senior executives.
AFP
4.55am: Israeli magnate to face corruption trial
French-Israeli diamond magnate Beny Steinmetz will go on trial in Geneva next month over alleged corruption linked to mining deals in Guinea, Swiss prosecutors and his lawyer said.
A Geneva prosecutor indicted Steinmetz in August last year on charges of corrupting public officials and forging documents in a bid to win Guinea mining rights.
The trial had been expected to take place back in March, but the COVID-19 pandemic and reportedly also calls for the prosecutor in the case to recuse himself delayed the proceedings.
Steinmetz’s lawyer Marc Bonnant told AFP that the trial was now set for January 11-22, and that his client, who “rejects all the charges”, “will be there”.
The Geneva prosecutors’ office confirmed the dates.
Swiss prosecutors accuse Steinmetz and two partners of making payments to Mamadie Toure, a wife of former Guinean president Lansana Conte, to win mining rights in the Simandou region of southeastern Guinea.
The region is estimated to contain the world’s biggest untapped iron-ore deposit.
AFP
4.52am: Lizards, snakes block Tesla plant
US automaker Tesla was forced to suspend forest clearing for a new German plant after environmentalists won an injunction over threats to the habitats of resident lizards and snakes.
The electric vehicle giant ran into opposition from two nature conservation groups which launched urgent court action against the felling of 83 hectares of pine trees for its huge “gigafactory” plant at Gruenheide, south of Berlin.
The news risks delaying the company’s hopes to roll its first electric cars off the assembly line at the site in July 2021.
The administrative court in Frankfurt an der Oder told AFP it issued an interim injunction Monday “imposing a temporary halt to clearing” to allow for an examination of the case “in view of the rapid progress of the clearing work”.
A final decision on the complaint filed by the Brandenburg state chapter of the Nature and Biodiversity Conservation Union (NABU) and Green League is still pending.
AFP
4.50am: Japan approves $US700bn stimulus
Japan’s government approved more than $US700 billion in fresh stimulus to fund projects from anti-coronavirus measures to green tech, the country’s third such package this financial year.
The COVID-19 pandemic has wrought global economic carnage and countries across the world have announced massive cash injections.
Japan’s latest package, worth 73.6 trillion yen ($US708 billion), includes loan schemes and actual government spending of around 40 trillion yen.
It is the first stimulus spending Prime Minister Yoshihide Suga has announced since taking office in September, and comes as Japan faces a spike in COVID-19 infections, with record numbers of new cases reported in recent weeks.
AFP
4.45am: German investor confidence jumps
German investor confidence jumped in December after falling for two straight months, buoyed by hopes that vaccines -- expected to win approval for general use in the EU imminently -- could help end the coronavirus pandemic.
The ZEW institute’s monthly barometer measuring economic expectations rose to 55.0 points, from 39.0 points in November.
“The announcement of imminent vaccine approvals makes financial market experts more confident about the future,” said ZEW President Achim Wambach.
AFP
4.40am: S.African economy rebounds 66.1pc
South Africa’s economy bounced back at an annualised rate of 66.1 per cent in July-September, official data showed, after plummeting by half in the April-June quarter due to the coronavirus pandemic.
The return to growth came “largely as a result of the easing of COVID-19 lockdown restrictions,” statistics agency StatSA said in a statement, adding that gross domestic product (GDP) in Africa’s second-largest economy had expanded 13.5 per cent in non-annualised terms in the third quarter.
AFP
4.35am: JD.com health arm rockets 75pc on debut
The medical arm of Chinese e-commerce giant JD.com soared 75 per cent on its debut in Hong Kong on Tuesday, valuing the company at $US50 billion, as investors bank on the pandemic boom in digital health services.
While the coronavirus has left national health services stretched, demand for digital healthcare providers like JD Health grew on the back of the virus.
The company’s chief executive Xin Lijun said it has “changed the entire (health) industry” and pushed the company to accelerate its listing in Hong Kong, the biggest initial public offering in the financial hub this year.
The company, China’s largest online healthcare platform and retail pharmacy, raised HK$26.5 billion ($US3.41 billion) in the sale and with demand for the firm outpacing supply its share price spiked at HK$123.90 -- compared with its offer price of HK$70.58 -- briefly giving it a valuation of $US50 billion.
However, it later eased slightly to end up 56 per cent at HK$110.00.
AFP
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