ASX books first fall in 3 days, Rio posts bumper profit
Australia’s sharemarket fell for the first time in three days while Rio Tinto ended a bad year with a big profit.
- Tabcorp shy on suitors after profit falls 7pc
- Treasury Wine to split, China earnings slump
- Westpac posts jump in first quarter earnings
- Bitcoin tops $US50,000 for first time
- Coles warns of moderating supermarket growth
Welcome to the Trading Day blog for Wednesday, February 17. Australian stocks finished lower, hit by a jump in bond yields, following a volatile night on world markets.Coles, Tabcorp, Domino’s, Treasury Wine Estates, Carsales, Whitehaven, Webjet, Super Retail and Evolution, and Rio Tinto all posted earnings results while Westpac gave a quarterly update.
6.22pm:Fortnite-Apple feud heats up
Fortnite maker Epic Games on Wednesday lodged a complaint against Apple with EU antitrust authorities, deepening its bitter feud with the iPhone-maker over its app store.
Apple and Epic have been caught in a fierce battle over whether Apple’s tight control of the App Store, and its 30-percent cut of revenue, is abusive.
The fight took a dramatic turn in August when Apple expelled Fortnite, one of the world’s most popular games, from its app store after Epic released an update that dodges revenue-sharing with the iPhone maker.
Apple does not allow users of its popular devices to download apps from anywhere but its App Store, and developers have to use Apple’s payment system which takes its cut.
“We will not stand idly by and allow Apple to use its platform dominance to control what should be a level digital playing field,” said Epic Games CEO Tim Sweeney in a statement.
The company said the lawsuit “complements” other legal proceedings it has launched in the United States, Australia and Britain.
The war over the Apple app store has widened to Facebook, where CEO Mark Zuckerberg has accused Apple of imposing rules for outside developers that it does not apply to its own services.
This echoes the accusations of Spotify, which also believes Apple has given unfair advantage to its Apple Music service over other streaming services.
AFP
6.20pm: Tokyo closes lower
Tokyo stocks closed lower Wednesday on profit-taking, taking a pause after recent rallies.
The benchmark Nikkei 225 index lost 0.58 percent, or 175.56 points, to 30,292.19, while the broader Topix index slipped 0.18 percent, or 3.59 points, to 1,961.49.
AFP
4.51pm:ASX drops after Wall St wavers
Australia’s sharemarket fell for the first time in three days as Wall Street wavered near record highs after a spike in bond yields.
The S&P/ASX 200 index closed down 32 points or 0.5pc at 6885.2 after falling as much 0.8pc intraday while S&P 500 futures dipped 0.4pc then bounced.
Aussie 10-year bond yields were up 8bps at 1.403pc after hitting an 11-month high of 1.429 following a 10bps rise in the US 10-year yield to a 12-month high of 1.30pc as the “reflation trade” took off.
That weighed on high PE stocks in the Tech and Health Care sectors, with Afterpay down 3.7pc and CSL down 1.6pc and it also weighed on bond proxies with Transurban down 4pc and Goodman down 3.2pc.
The Consumer Staples sector was weakest with Coles down 5.4pc amid some caution about its outlook and Woolworths following with a 4.6pc fall.
But the Financials sector predictably outperformed as bond yields jumped with Westpac strongest with a 4.6pc rise on a solid trading update.
EML Payments was strongest with a 16pc rise after reinstatingd earnings guidance after a COVID-19 hiatus and signalling a strong finish to the 2021 fiscal year.
Materials was the strongest sector with BHP up 3.4pc as analysts raised target prices after its dividend beat on Wednesday, Rio Tinto up 3.6pc before reporting strong results after the close, and Fortescue up 3pc before it reports on Thursday.
The Energy sector also closed in the green with Oil Search up 1.2pc as WTI crude oil futures stayed above $US60 a barrel with at least 3.5 million barrels a day or about a third of US output shut-in by the “Arctic Freeze”.
Nick Evans4.43pm:Rio post bumper profit to end horror year
Rio Tinto has declared a $US4.02 dividend on the back of a $US9.77bn annual profit, returning $US5bn to shareholders as the mining giant declared bumper earnings to close out an otherwise horrific year for the company.
After delivering his first set of financial results, new Rio Tinto boss Jakob Stausholm has also outlined an ambitious plan to retrieve Rio’s reputation as the world’s best mining operator, restore its reputation with indigenous communities and get the company back on a growth track by building a suite of new mines
Rio delivered a $US3.09 final dividend on the back of the result, as well as a US93c special dividend returning $US6.5bn to shareholders.
It declared an underlying profit before interest, tax, depreciation and amortisation of $US23.9bn.
Rio’s result was dominated by its iron ore division, which delivered underlying EBITDA of $US11.4bn.
Analysts consensus tipped Rio’s underlying iron ore earnings, before interest and tax, at $US11.47bn, or about 90 per cent of its total earnings for the year.
Jared Lynch 3.20pm:US pediatrics journal publishes Mesoblast remestemce-L results on children
Stem cell-focused biotech Mesoblast has gained further momentum in what it hopes will be a blockbuster drug after it was featured in a US pediatrics journal.
The American Academy of Pediatrics has published a paper on how Mesoblast’s remestemce-L helped two children recover from potentially fatal COVID-19 complications.
The drug was used to treat MIS-C, a potentially life-threatening inflammatory response which developed after the children were infected with COVID-19.
The authors noted: There are currently no standardized or approved treatments for MIS-C.
Remestemcel-L exhibits beneficial effects relative to the cardiac and vascular pathophysiology
associated with this inflammatory disease state in children. This therapy holds promise as a novelntreatment for MIS-C.
Mesoblast’s existing Investigational New Drug (IND) application allows doctors to access remestemcel-L, under its Intermediate-Size Expanded Access Program in COVID-19 infected children aged between two months and 17 years with MIS-C.
3.00pm:ASX -0.3%; paring intraday fall
Australia’s sharemarket pared much of an intraday fall as US futures turned positive.
The S&P/ASX 200 was down 0.3pc at 6894.8 after falling as much as 0.8pc to a 2-day low of 6863.
S&P 500 futures were up a point after falling as much as 0.4pc to 3931 after US bond yields jumped 10bps to a 12-month high of 1.30pc overnight.
Perry Williams 2.54pm:Russia’s Lukoil lobs $220m takeover bid for FAR
Russian oil giant Lukoil has lobbed a $220m takeover bid for embattled oil and gas junior FAR Limited, potentially sparking a fresh headache for Woodside Petroleum as it looks to lock down ownership of its Senegal oil project.
Woodside shelled out $400m last August to thwart Lukoil buying a 40 per cent stake in the Senegal development known as Sangomar and also decided to pay $US45m for FAR’s 13.67 per cent share of the project, pre-empting a distressed sale to India’s ONGC Videsh.
However, Lukoil has now crashed the party with a 2.2c a share takeover offer for FAR which is contingent on FAR delaying a shareholder meeting scheduled for Thursday to consider approving the Sangomar sale to Woodside.
FAR has agreed to postpone the meeting as it seeks to clarify the conditional, non-binding bid.
Lukoil will not require Foreign Investment Review Board approval, according to FAR, and has a “deep understanding” of the Senegal project after conducting due diligence before it was thwarted by Woodside.
Lukoil will provide some financing to allow FAR to resolve a default on its $US19.9m cash call for January.
FAR has until mid July 2021 to pay back defaults or risk losing its interest in the Senegal project.
Lukoil stated its bid is contingent on obtaining minimum acceptances of 50.1 per cent of shares and a FAR board recommendation.
2.38pm:Nearmap puts hurt on shorts
Nearmap must be really hurting the short sellers now.
NEA shares have risen as much as 7.3pc to a 5.5-month high of $2.78 today.
That follows its stronger-than-expected interim profit, full-year contract guidance and rebuttal of J Capital’s short sell report on Monday.
Any short positions that were established on Nearmap before September 9 will now be underwater.
That includes hedge funds expecting easy wins from JCap’s short report, even after it doubled down on its claims yesterday.
“Never a smart move to stand in front of a company that has just seen big upgrades,” Bell Potters’ Richard Coppleson wrote on Tuesday.
“I’d say some of the shorts will be covering - buying the stock - over the next few weeks. Game, set and match to Nearmap.”
NEA last up 6.8pc at $2.77.
Cliona ODowd 2.30pm:The Reject Shop braces for earnings hit
The Reject Shop is bracing for earnings losses in the second half of the financial year, as lockdowns, border closures and reduced foot traffic in CBDs and shopping centres hit retail sales.
A sluggish international supply chain, choking stock availability and driving up costs through higher shipping charges, will compound the earnings challenges, the retailer said on Wednesday, as it handed down its first-half result.
For the six months through December, The Reject Shop posted a 46.5 per cent rise in net profit, to $16.3m, despite sales dropping 0.3 per cent to $434.3m.
Sales during the half were impacted by state government lockdowns and border and travel restrictions across the country, as well as stock issues due to international shipping delays.
Three new stores were opened and one CBD store was closed during the half. Comparable store sales were flat on the prior corresponding period.
“The first-half result and the progress made during the ‘fix’ phase (of the turnaround strategy) is pleasing,” the retailer’s chairman Steven Fisher said.
“During the second half, The Reject Shop will continue to navigate the challenges associated with COVID-19 as well as the international supply chain. We are targeting to complete the ‘fix’ phase by the end of fiscal 2021.”
The turnaround strategy is the discount retailer’s three-phase plan to fix, reset and grow the business.
Cliona ODowd 2.23pm:Netwealth sinks +7pc despite profit win
Netwealth shares are down as much as 7.3pc despite the wealth provider posting a better-than-expected net profit for the first half, with investors more focused on the impact of repricing measures taken last year.
For the six months through December, Netwealth posted a 34.5 per cent jump in net profit to $27.6m, well above the $25m the market had been expecting.
Total income rose to $72.4m, 23.4 per cent higher than the prior corresponding period, while platform revenue of $71.2m, up 24.1 per cent, was driven by higher average funds under administration and partially offset by lower platform revenue margins.
But investors sent its shares down 5.5 per cent in early trade, to $16.80, as it gave an update on the new pricing measures announced in March last year.
“On January 1, 2021 new pricing previously announced in March 2020, was fully implemented. As a result of the changes to pricing, we do not expect FUA administration fee income to increase significantly in the second half of 2021 compared to the first half,” Netwealth said.
Analysts noted the strong result but cautioned on the income hit from the repricing.
Lachlan Moffet Gray 2.11pm:Crown may face another ‘months-long’ interrogation in WA
Crown Resorts could be subjected to another months-long public interrogation of their conduct after the WA gaming Minister hinted the state’s inquiry into the James Packer backed company would resemble the one recently concluded in NSW.
Speaking to radio station 6PR on Wednesday morning WA racing and gaming Minister Paul Papalia said the inquiry, which is set to have all the powers of a Royal Commission, would be headed by two individuals due to its complexity and expected months-long time-frame.
“We’ve been recommended by the state solicitor that two individuals undertake the inquiry because of the complexity of the task and also because it will be about four months in length,” Mr Papalia said, adding that potential candidates are already being discussed.
“There’s been recommendations by the state solicitor,” he said.
“I can’t reveal who they are because they haven’t yet seen the terms of reference and accepted the task.
“Nevertheless, you are talking about people of the calibre of a retired supreme court judge, a retired very senior experienced public service, both of whom have impeccable credentials for the task.”
Mr Papalia said it had not been determined whether the hearings would be public like they were in NSW, but remained open to the possibility.
Joseph Lam 2.01pm:Youth publisher Junkee lands Google deal
Youth publisher Junkee Media has become the latest Australian media outlet to strike a deal with Google as the federal government continues its push for a media bargaining code to become law.
“We’re extremely pleased with the outcome of this deal,” Junkee Media chief executive Neil Ackland told AdNews.
“This is a significant investment that will allow us to set up a content infrastructure that will ensure Junkee’s sustainability well into the future.”
The announcement arrived just hours after it was revealed Nine Entertainment Co also struck a deal with Google.
Google Australia and New Zealand managing director Mel Silva said the Junkee deal built on its almost 50-strong media partnerships, which include The Saturday Paper, Crikey, The New Daily, Seven News and The Newcastle Herald.
“There are now almost 50 Australian media titles signed onto Showcase, with a total of 500 worldwide,” she said.
1.01pm:SPC: Covid highlights supply chain strain, backs Vic govt $19.3m support
Australian food manufacturer SPC has welcomed the announcement from the Victorian government of an additional $19.3m to support locals into jobs and cover the majority of the quarantine costs for Pacific Islander workers.
SPC CEO, Robert Giles said: “This is welcome news, not only for SPC but the entire Victorian industry. We’ve been talking with government at all levels about the strain on our supply chain. Demand is so strong that for the last few months, our snack production line has been running day and night. Today’s announcement demonstrates that the Victorian government is doing all they can to help us get our products to market.
“This year we’re enjoying a bumper apricot season - much better than last year. While this is great news for SPC we do remain concerned about Australia’s ongoing labour shortage. It creates increased harvest costs, meaning our industry may not be able to employ sufficient pickers to harvest the fruit - especially with such a strong season. At SPC, we’re committed to supporting our industry and will continue our conversations with government at all levels.”
“Covid-19 has highlighted that now, more than ever, Australia needs a vibrant and growing food manufacturing industry. We need food security. We need affordable, available, nutritious food choices and we need greater sustainability at every step of the food chain.”
12.50pm:Betmakers shares jump +14pc on Matt Tripp move
BetMakers Technology Group said online wagering industry leader Matt Tripp will partner exclusively with BetMakers to accelerate growth of its B2B wagering strategy.
Separately, Mr Tripp has also agreed to subscribe for $25m of new BetMakers shares.
BetMakers is currently engaged with a number of parties in relation to opportunities which leverage BetMakers’ scalable technology and data platform and looks forward to Mr Tripp’s assistance with these exciting initiatives, the company said in a statement.
“In addition to reviewing potential opportunities for BetMakers to provide B2B services in the Australian wagering market, the company is also looking at opportunities in the US, with a particular focus on those which can leverage BetMakers’ anticipated acquisition of the tote and digital business from Sportech PLC.
“BetMakers will continue to focus on transactions which are accretive to BetMakers’ shareholders.”
12.46pm:EML Payments shares +15pc, guidance reinstated
EML Payments has reinstated earnings guidance after a COVID-19 hiatus and signalled a strong finish to the 2021 fiscal year, sending the stock soaring more than 15 per cent.
EML’s gross debit volume - put through its proprietary processing platforms - jumped 54 per cent to $10.2bn in the six months ended December 31, marking a record result. The results impressed investors despite the gift card business for shopping malls being dented by the pandemic and closures around the world.
The company provides digital banking and payments services, prepaid cards and digital gift cards in 28 countries.
EML’s guidance points to the group posting earnings before interest, tax, depreciation and amortisation of between $50m and $54m for the 2021 financial year, up as much as 66 per cent on the prior period. Adjusted net profit is expected to print between $30m and $33.5m, a rise of 25 per cent to 40 per cent versus fiscal 2020.
Group earnings before interest, tax, depreciation and amortisation printed at $28.1m for the first half, 42 per cent higher than the same period a year earlier. EML’s adjusted net profit rose 30 per cent to $13.2m, but the statutory result was a loss of $23.9m due to lumpy other non-operating expenses and depreciation and amortisation charges.
EML’s shares surged 15.4 per cent to $4.86 by midday in ASX trading on Wednesday, as investors applauded the strong business momentum.
“General beats across the board,” RBC analysts said of the EML results. “Revenue and EBITDA strong but NPATA (adjusted net profit) misses, looks driven by higher tax, finance costs, non-operating expenses and D&A (depreciation and amortisation). NPATA miss not an issue as uncontrollable.”
12.29pm:Dividend upgrades a “major theme”: UBS
The February reporting season has been “strong” and upgrades to consensus estimates for dividends are now a “major theme” from the local reporting season, according to UBS.
“The main upside surprise this reporting season has been to dividends with 43pc of ASX 100 reporters beating so far,” says UBS quantitative analyst, Pieter Stoltz.
Whitehaven Coal, Fletcher Building, Rio Tinto, Super Retail and OZ Minerals (some have since reported) screen as “positive dividends per share surprise candidates” among companies reporting this week.
The biggest positive surprises among large companies have come from Bendigo, Newcrest and IAG, while negative surprises have come from Challenger, AMP and Boral.
Overall there have been “more beats than misses” and “more guidance upgrades than downgrades”.
The ratio of companies beating expectations for earnings per share relative to those missing is now 2.6.
That’s the highest on record, according to UBS’s Mr Stoltz.
Similarly, the guidance upgrade to downgrade ratio is 1.8.
“Generally, these ratios soften with lower quality results at the end of reporting season,” he says.
“However, there are a lot of companies reporting later - presumably due to the complexities associated with the COVID rebound - so the ratios may hold steady over the next week at least.”
Elsewhere, the Insurance, Telcos and Other Financials sectors have led positive EPS revision trends.
Overall, the EPS growth estimate for FY21 has been revised up by 2.1 percentage points to +28.8 per cent.
The EPS revisions have been led by Financials and Resources, followed by Industrials.
By sector, Insurance, Telcos and Other Financials have seen the largest EPS upgrades.
Tech, General Industrials and Gaming have seen the largest EPS downgrades, according to UBS.
12.15pm:ASX -0.8% as bond yields jump
Australia’s sharemarket has been hit by a jump in bond yields despite a strong earnings season so far.
The S&P/ASX 200 fell 0.8pc to a 2-day low of 6865.7 after an opening surge to a 12-month high of 6938 before the market fully opened.
Australia’s 10-year bond yield rose as much as 11bps to an 11-month high of 1.429pc after a similar move in US Treasuries overnight.
It comes as strong US economic data, surging oil prices, falling US COVID cases and growing confidence in vaccines stokes inflation expectations.
That’s weighed on US futures after record highs of late. It has also hit high PE stocks and bond proxies in the Australian market.
Thus the Tech, Consumer Staples, Real Estate, Health Care and Utilities sectors have led declines, with Zip Co down 14pc, Afterpay down 6pc, Coles down 5.5pc on results disappointment and CSL down 1.9pc.
Some Covid “winners” in the Consumer Discretionary sector have also come off with Wesfarmers down 2pc and Breville down 2.1pc, but Domino’s rose 4.3pc and ARB surged 6pc after strong results.
Westpac is still up 4.6pc after a strong trading update and iron ore miners remain strong after BHP’s big dividend, with Rio Tinto up 2.3pc, Fortescue up 3pc and BHP up 2.9pc after surging 4.9pc.
The Australian dollar is down 0.23pc against the US dollar, trading around US77.40c.
12.05pm:CPA Aust calls for lockdown payments for businesses
The peak body for Australian accountants is calling on the federal and state government to deliver financial support for businesses that are hit by lockdowns.
CPA Australia CEO Andrew Hunter said the recent run of snap lockdowns has dealt serious damage to the balance sheets of thousands of Australian businesses and no recompense had been provided.
“We’ve been living with Covid-19 for more than a year now. JobKeeper ends next month and we still don’t have a substitute for businesses that are compulsorily closed or those otherwise impacted by lockdowns, such as suppliers and customers outside the lockdown areas,” he said.
“However, it seems businesses are being treated as an afterthought when making lockdown decisions. If governments are going to rip the rug out from under them at short notice, they need to provide a safety net.”
Mr Hunter said governments should create a standardised, scalable and targeted payment that could be rapidly delivered to businesses hit by snap lockdowns.
11.46am:BofA survey gives reason for caution
BofA’s Global Fund Manager Survey continues to give some cause for caution on a contrarian basis.
While it has been this way for a while, the survey of 225 funds managing a combined $US614bn ($782bn) suggests sentiment is bullish enough to expect a pullback in equities and commodities even though macroeconomic drivers remain positive.
Global fund managers’ cash level hit a fresh 8-year low and their allocation to stocks and commodities rose to the highest point since 2011 - the last year that both had negative returns, says BofA chief investment strategist, Michael Hartnett.
The cash level fell to 3.8 per cent, its lowest since March 2013 - just before the Bernanke “taper tantrum”, with a record number of funds said they were taking “higher-than-normal” risk.
For the second month running, the cash level gave a “sell signal” which has historically preceded an average return for the S&P 500 of minus 3.2 per cent over one month, according to Mr Hartnett.
The “BofA Bull & Bear Indicator remained at a “bullish” level of 7.7 points and close to the 8.0 points level, above which the indicator gives a “sell signal”.
The survey also found that “economic expectations are bullish” with a majority now saying it’s a “V” shaped recovery versus just 10 per cent nine months ago.
Similarly, a record 91 per cent of fund managers now expect a stronger economy and 84 per cent expect global profits to improve over 12 months, though this was down 3 points from last month.
Also, for the first time in 13 months, a majority of CIOs wanted CEOs to increase capex rather than improve balance sheets.
But the survey continued to show “peak Goldilocks” as hopes for higher growth with lower inflation continued to fall.
Interestingly, only 13 per cent of investors thought the US equity market was in a “bubble”, while 27pc thought it was an early-stage bull market, and 53pc thought it was “late stage”.
Investors ranked the top “tail risks” as the vaccine rollout, followed by “taper tantrum” and inflation, and “crowded trades” were ranked as long tech, long Bitcoin and short US dollars.
Mr Hartnett said “anti-Goldilocks” contrarian trades to dodge a bubble or a big rise in inflation this year were best played via survey laggards like energy and UK stocks.
Conversely longs in EM, commodities, industrials were seen as the most vulnerable to a “peak profits” narrative.
“Either way consumer staples (is) a smart contrarian accumulator in the first half (of calendar 2021),” he said.
11.08am:ASX turns down with US futures
Australia’s sharemarket has succumbed to a fall in US futures after initially being supported by strong earnings reports.
The S&P/ASX 200 fell 0.5pc to 6885.4 points as S&P 500 futures fell 0.3pc after US bond yields surged overnight.
The Tech, Staples, Health Care, Utilities, Real Estate, Discretionary and Communications sectors are underperforming with Aussie 10-year bond yields rising 11bps to a 12-month high of 1.429pc after the US move.
CSL, Afterpay and Woolies are the biggest drags with falls of 1.8pc, 5pc and 3.2pc respectively.
But the Materials and Financials sectors are still in the green, with BHP up 4.2pc, Westpac up 5pc, Fortescue up 3.9pc and Rio Tinto up 2.1pc.
Brambles is still very strong with a 6pc rise after upgrading its earnings guidance.
10.27am:ASX opens steady, supported by earnings reports
Australia’s sharemarket has been supported by positive reactions to earnings reports despite slightly weaker leads from Wall Street.
The S&P/ASX 200 was flat at 6915 in early trading after an opening surge to a fresh 12-month high of 6938 before the market fully opened.
Gains in Materials and Financials and a jump in Brambles on the back of earnings reports are offsetting falls in other sectors amid surging bond yields.
BHP rose 4.4pc as analysts raised target prices after its interim dividend beat estimates by 20pc yesterday.
Rio Tinto and Fortescue are tracking BHP before they report over the next two days.
Westpac was up 4.8pc at $23.60 after surging 6pc to $23.87 - its highest point since February 28th after a strong trading update.
Brambles rose 5.1pc after boosting its earnings guidance in its report yesterday.
EML Payments tops the leaderboard with an 11pc rise after its report.
Zip Co is taking a breather, down 12pc, after saying it had no new information yesterday.
10.15am:Cbus adds Kristin Miller to group exec team
Kristin Miller will join Cbus Super in the new role of Group Executive, People and Culture.
Cbus CEO Justin Arter said that Ms Miller is a proven people and culture leader and will play a key role as the $60bn fund continues to grow, “We are very pleased to welcome Kristin Miller to the leadership team at Cbus, Kristin is joining the fund as it continues to grow by all measures.
Ms Miller will commence with Cbus on 22 February 2021.
Nick Evans 10.11am:China to keep coal ban near term: Glencore’s Glasenberg
Outgoing Glencore boss Ivan Glasenberg says he sees no end it sight to China’s bans on Australian coal, saying the ban made little financial sense but he saw no sign Chinese authorities would relent.
China’s bans on Australian metallurgical and thermal coal delivered a big hit to Glencore’s annual financial results, delivered overnight.
Its Australian thermal coal mines slumped to a $US528m ($681m) loss, before interest and tax, from a $US1bn profit in 2019. Its coking coal exports booked a $US1m loss, down from a $US546m profit the previous year.
Lachlan Moffet Gray 9.52am:Crown ‘to fully co-operate’ with WA on any suitability inquiry
Crown Resorts says it will comply will “fully co-operate” with any inquiry into the company’s suitability established in West Australia, after the WA gaming regulator recommended one be established late last night.
“Crown will fully co-operate in relation to this inquiry and will continue to engage with the WA Commission in relation to its reform agenda and any further remedial steps identified in response to the NSW ILGA Inquiry,” the company said.
Crown executive chairman Helen Coonan said:
“Crown is determined to play a constructive role with all of its regulators as it works to restore public and regulatory confidence in its operations.”
The WA Gaming and Wagering Commission formally recommended an inquiry with the powers of a royal commission following the revelations of the Bergin inquiry in NSW, which found Crown was not suitable to operate its Sydney casino.
READ MORE: Crown faces new casino inquiry
Lisa Allen 9.48am:CTM sinks to loss, aiming for strength post-Covid
Weak travel conditions saw international business travel group, Corporate Travel Management, post a $15.7m loss for the half year, down from a $64.5m profit the previous year, but it foreshadows that post Covid-19 it will emerge as a significantly stronger business.
CTM managing director Jamie Pherous said total transaction volumes were down 88 per cent and revenues and other income fell 67 per cent for the half year to December 31, but the company was picking up international business as other travel businesses folded.
“Those that can manage the recovery are the ones that can win more business. We are one of the few companies that did not need to do an emergency raise,” Mr Pherous added.
CTM is not paying a dividend and would not give guidance but Mr Pherous said as long as the Brisbane, Sydney and Melbourne travel triangle remained open it could produce a domestic profit.
Ben Wilmot 9.43am:Vicinity Centres slumps to $394.1m loss, gives no guidance
Retail landlord Vicinity Centres crashed to a $394.1m first half loss as it was hit by $572.4m of write down on its mall portfolio as the coronavirus pandemic wreaked havoc on its operations.
The company generated Funds From Operations of $267.1m but was swamped by the cuts to its portfolio and the continued effects of COVID-19, particularly rental waivers and provisions for unpaid rent.
Vicinity declared a distribution per security of 3.4c for the half, less than half the 7.7c paid in the first half last year, saying the reduced distribution payout ratio of 62.4 per cent was conservatively positioned in light of continued uncertainty around full-year earnings and COVID-19 impacts.
Vicinity chief executive Grant Kelley said that although the pandemic led to significant financial and operational challenges, the company was well-positioned to benefit from improving economic conditions, with consumer and business confidence now approximating pre-pandemic levels, fuelled by fiscal stimulus measures, record low interest rates and robust COVID management nationally.
“While the retail industry is showing continuing signs of recovery, we recognise that uncertainty remains, with the potential for further COVID-19 restrictions, the unwinding of temporary government support measures, and a prolonged recovery in CBDs on the eastern seaboard,” he said.
Mr Kelley said that despite the improvement in trading conditions there remains uncertainty, particularly due to the ongoing effects of the pandemic.
Vicinity did not provide full year earnings guidance but is targeting a distribution payout ratio of 95 per cent to 100 per cent of Adjusted Funds From Operations for the full year.
Jarden analysts said Vicinity had much stronger than expected FFO which should drive earnings upgrades, although the lack of guidance and weak retail statistics suggest that the company was not that convinced about the speed or consistency of recovery. “Structurally, we believe pressure on rents and asset values remains which should drive performance in the medium to long term, but we think this result highlights that at a significant discount to net tangible assets and with a 5 per cent yield, the shares are not expensive and the COVID recovery trade may have a bit further to run,” Jarden said.
Perry Williams 9.38am:Pact resumes interim dividend as profit surges
Packaging producer Pact Group, controlled by Melbourne billionaire Raphael Geminder, resumed its interim dividend after two years without a half-year payout and forecasts stronger annual earnings due to strong growth for hygiene, health and agricultural products amid COVID-19.
Pact saw its underlying net profit for the half surge 59 per cent to $52m while underlying earnings before interest and tax jumped by a quarter to $99m with improved volumes in the agricultural, industrial and health and wellness sectors boosting its packaging and sustainability segment.
Revenue rose 1 per cent to $894m with sales growth of 4 per cent offset by passing on lower raw material costs to its customers and foreign exchange impacts. Net debt eased to $599m from $667m with gearing of 2.4x beating its targeted range of less than 3x.
An interim dividend of 5c per share was announced with the payout being resumed for the first time since 2019 after last year’s dividend was cancelled due to uncertainty from the pandemic.
Earnings for the 2021 financial year are expected to be higher than 2020 “subject to the duration and economic impact of uncertainty related to Covid-19 and other global conditions,” Pact said.
“The business continues to demonstrate sustainable momentum and earnings resilience. In a seasonally softer second half we forecast similar underlying trends to that which we enjoyed in the first half, but anticipate a weaker hygiene category.”
Mr Geminder - married to Fiona Geminder, daughter of the late cardboard box king Richard Pratt - is the chairman and 40 per cent owner of Pact.
David Swan 9.37am:NBN price change proposal ‘disappointing': Aussie Broadband boss
NBN Co’s proposed pricing changes announced this week are deeply disappointing, according to Aussie Broadband CEO Phillip Britt, who says customers will be caught in the crossfire as providers either conserve bandwidth or increase prices.
“It’s very much too little and way too late,” he said. “The peak time speeds will slow down, because providers will look to conserve costs, or retail prices will go up. Ultimately if NBN doesn’t intervene in the pricing model we will step back to 2019. NBN gave providers a lot of extra capacity during COVID, everyone had a great experience which was fantastic, but we’re back to reality.”
Aussie Broadband listed on the ASX in October and its shares are up 154 per cent since then, to $2.54. On Wednesday’s half year results it posted revenue up 89 per cent year-on-year to $157.4m, while EBITDA was up 87 per cent year-on-year to $7.3m.
It posted a net loss before tax of $10.5m, which Mr Britt said was due to a one-off cost relating to convertible notes.
9.35am:ASX may dip amid earnings reports
Australia’s sharemarket looks set to dip after US stocks wavered amid surging bond yields.
But results from 20 ASX 200 companies and a trading update from Westpac could influence direction.
Overnight futures relative to fair value suggest the S&P/ASX 200 will open down 0.3pc at 6896.5
Whereas S&P 500 futures were up about 0.7pc when the Australian market closed on Tuesday, the US benchmark closed down 0.1pc at 3932.59 after setting a record high of 3950.43.
US 10-year bond yields surged 10bps to a 12-month high of 1.30pc as the “reflation trade” was bolstered by a stronger-than-expected Empire State Survey, with prices paid near a 10-year high.
But while that saw the S&P 500 Financial sector outperform, with the KBW Bank index up 3pc, it wasn’t so good for the broader market.
Australian 10-year bond yields have surged 11bps to an 11-month high of 1.413pc in response.
Energy was the strongest S&P 500 sector as WTI crude rose 1pc to $US60.05 as the cold snap in Texas crimped production.
BHP ADR’s equivalent close at $48.95 was a 4.2pc premium to BHP’s close in Sydney.
The S&P/ASX 200 rose 0.7pc to 6917.27 points on Tuesday, its highest close in almost 12 months.
Lachlan Moffet Gray 9.34am:Super Retail Group doubles HY profit, sales up 23pc
Super Retail Group has more than doubled its half year profit to produce a record result with strong revenue growth across most brands after it managed to “capitalise on the unprecedented level of consumer demand” for recreational goods, particularly through online sales.
Total group sales increased 23 per cent to $1.78bn in the six months to December 31, with online sales growing by 87 per cent to $237.4m.
Group segment EBITDA lifted 95 per cent to $311.4m while statutory net profit lifted 201 per cent to $172.8m.
A dividend of 33 cents per share was declared.
The best performing segment was outdoor brand Boating, Camping Fishing, which saw sales increase 50.9 per cent to $427.7m and online sales increase over 100 per cent.
The Rebel sports wear brand saw sales lift 17 per cent to $623.7m while the flagship Supercheap Auto brand saw sales increase 20.2 per cent to $661.9m.
Macpac sales sell by 5.3 per cent due to store closures.
The company said sales remained strong in the first weeks of the second half of the financial year, up more than 30 per cent on a like-for-like basis but said operating expenses will rise throughout the rest of the year, flagging capex of $100m.
Lilly Vitorovich 9.32am:Nine confirms big tech content deal talks
Nine Entertainment is locked in talks with tech giants about a news content deal, similar to the one struck by staunch rival Seven West Media, as the federal government pushes ahead to pass the mandatory media bargaining code into law.
“We continue to have constructive discussions with the digital platforms and when we have anything to announce we will do so to the ASX as is appropriate,” a Nine spokesman said Wednesday morning. It was the same line on Tuesday.
He declined to comment on a media report in Nine’s newspaper that it had secured a $30m-plus deal with Google. The report said Nine has signed a letter of intent with Google with a final commercial agreement could be struck in the next fortnight.
Google wasn’t immediately available to comment on the report. A Google spokesman would only say on Tuesday that they are in talks with “publishers large and small”.
Australia’s government is set to introduce some “technical” amendment to the mandatory media bargaining code this week, which will see Google and Facebook pay an agreed annual lump sum to publishers.
Joseph Lam 9.28am:Nine signs $30m Google content deal
Nine Entertainment Co has signed a deal with Google to receive more than $30m a year for use of its content.
An agreement was reached overnight for the use of content from the company’s television, newspaper, radio and digital assets, Nine-owned newspaper Sydney Morning Herald reported Wednesday.
SMH described the deal as “a major breakthrough” for the search engine giant which faces oncoming media bargaining laws.
“If the letters signed by Nine and Seven turn into commercial agreements, they will allow Google to avoid a risky arbitration process, but media executives still believe the legislation is crucial to ensure tech companies pay for news content and contribute to funding public-interest journalism. It will also prevent Google from backing out of the arrangements,” read the article.
The letter of intent for a five-year deal was signed last night with final commercial agreement expected within weeks.
Ben Wilmot 9.26am:Charter Hall turns $173.2m profit, upgrades guidance
Property funds powerhouse Charter Hall Group has unveiled a $173.2m first half profit and is on the way to growing its empire to $50bn.
The group is riding the boom in logistics and long-leased properties and has come through the coronavirus crisis relatively unscathed despite also being a major office landlord.
The company had operating earnings of $129.3m, equating to 27.8c per security, and paid distributions of 18.6c per security, as it kept up a frenetic pace in which it struck $6.2bn worth of deals.
Charter Hall manages $46.4bn of funds and added $5.8bn over the half and is poised to keep growing as more industrial assets hit the block and corporate Australia hunts to unlock cash by striking sale and leaseback deals.
Charter Hall chief executive David Harrison said that notwithstanding the challenges presented by COVID-19, the company had been well insulated by our on-going focus on long WALE properties leased to high quality tenants.
He said that wholesale partnerships had a particularly strong six months with new partnerships created with sovereign wealth fund GIC to house the Ampol portfolio, an expansion of our Aldi supermarket logistics partnership with Allianz, PGGM undertaking a new logistics partnership and QuadReal investing in a new development project at North Quay in Brisbane.
Charter Hall upgraded guidance for this financial year and operating earnings per security is expected to be no less than 55c per security with the distribution per security to grow by 6 per cent.
“Overall it looks a good quality result with strong assets under management growth and good underlying property funds management earnings growth driving upgraded earnings guidance,” JPMorgan said.
9.08am:What’s impressing analysts, today?
Appen cut to Underperform: Macquarie
APN Convenience Retail REIT raised to Positive: Evans & Partners
Ansell raised to Add: Morgans Financial
Ansell raised to Buy: Jefferies
Aurizon cut to Neutral: Citi
BHP target price raised 4.2pc to $50: Buy rating kept: UBS
Breville Group target price raised 16pc to $32.25; Hold rating kept: Citi
Domain Holdings cut to Neutral: CS
Lendlease raised to Buy: Morningstar
NAB target price raised 8pc to $27; Buy rating kept: UBS
Orocobre raised to Buy: Citi
Pilbara Minerals raised to Neutral: target price raised 10pc to $1.10: Citi
Lachlan Moffet Gray 9.02am:Tabcorp profit drops, no guidance
Wagering giant Tabcorp has posted a reduced profit for the six months to December 31 but says it is making a “strong recovery” after an initial hit from COVID-19, growing revenue in all segments except the pub and club facing gaming services.
Revenues fell 1.5 per cent to $2.87bn on the prior comparable period while statutory net profit after tax declined 7 per cent to $185m.
A dividend of 7.5 cents per share, fully franked, was declared - a return to the company’s long-standing policy of maintaining an 80 per cent payout ratio.
Lotteries and Keno earnings before interest and tax lifted 4.9 per cent to $258m, with digital lottery sales growing by more than 20 per cent.
Wagering and media earnings slipped five per cent to $132m, but revenue increased by 0.8 per cent to $1.19bn.
Gaming services, which is heavily exposed to pubs and clubs, saw revenue halve from $149m to $73m, leading to an earnings loss of $18m.
Guidance was not provided and the company did not give any more information on the takeover offers it has received.
Lisa Allen 8.57am:Pandemic produces Webjet loss; transactions drop 90pc
In a sign of the devastating impact COVID-19 is having on the global tourism industry, online travel agency Webjet has reported a $112.4m loss for the half year to December 31 with its total transaction values dropping nearly 90 per cent.
Webjet chairman Roger Sharp said the company would not provide an earnings guidance nor pay a dividend for the 2021 financial year.
“Further the company has deferred payment of its FY20 interim dividend payment which was due to be paid on 16 April, 2021. It will be reviewed again following 1H22 results later this year,” Mr Sharp said.
However, Webjet says it is reducing its cash burn and has managed to get its lending waivers extended until March 31, 2022.
Lachlan Moffet Gray 8.49am:Asaleo Care backs Essity revised takeover offer
Asaleo Care has endorsed a revised takeover offer from Swedish health firm Essity as it hands down an increased half year profit and dividend.
Essity is now offering Asaleo shareholders $1.45 a share comprising $1.40 in cash and a $0.05 cents dividend payout, which is expected to be fully franked.
It represents a 6.6 per cent premium on Asaleo Care’s last trading price of $1.36 per share and values the company at around $788m.
Essity, which currently owns 36.2 per cent of Asaleo Care, first offered to purchase the company for $1.26 a share in December, but was knocked back by the board.
It comes as Asaleo reported a statutory net profit after tax of $32.3m for the half year, up 46.2 per cent on the prior comparable period.
An interim dividend of 3c a share was declared, up from 2c a share last year.
The company lowered its net debt by $44.4m to $94.9m during the period, earning a leverage ratio of 1.21.
Guidance of 5-7 per cent revenue growth and EBITDA of $90-93m was provided for the full year.
For FY2022, the company said it was targeting “mid-single digit revenue growth and EBITDA growth of 10%+.”
8.47am:Whitehaven Coal sinks to first-half loss
Whitehaven Coal sank to a half-year loss and said it wouldn’t pay a midyear dividend after coal prices were knocked by the global pandemic and a trade dispute between Australia and China.
Australia-based Whitehaven on Wednesday reported a net loss of $94.5 million for the six months through December. That compared with a profit of $27.4 million in the same period a year earlier.
Directors opted not to pay an interim dividend because of the fall in coal prices.
“The impacts of subdued pricing on seaborne coal markets were a key feature of H1 results as Covid-19 impacts on economic and industrial activity continued to be felt,” said Chief Executive Paul Flynn.
A Chinese ban on Australian coal has also taken a toll.
“Even though Whitehaven does not have direct exposure to China, the Chinese import restrictions for Australian sourced coal does have an impact on the seaborne coal market,” the miner said
Dow Jones Newswires
8.45am:Evolution profit up 55pc on higher gold price
Evolution Mining first-half profit jumped by 55pc as higher gold prices more than offset a drop in sales.
The Australian-listed miner reported a net profit of 228.7 million Australian dollars (US$177 million) for the six months through December. That compared to a profit of $147.2 million in the same period a year ago.
Directors declared a dividend of 7 cents a share, unchanged on a year ago.
“The fully franked interim dividend of 7.0 cents per share is our sixteenth consecutive dividend and reflects the priority we place on ensuring our shareholders benefit from our high cash generation,” Executive Chairman Jake Klein said.
Dow Jones Newswires
Lachlan Moffet Gray 8.32am:Domino’s Pizza profit up +30pc on delivered food demand spike
Domino’s Pizza Enterprises has boosted its net profit by more than 30 per cent and saw earnings growth in all its geographies - Europe, Japan, Australia and New Zealand - as the pandemic continues to fuel demand for home-delivered food.
Net profit after tax grew by 32.8 per cent to $96.2m as EBITDA lifted 23.8 per cent to $218.7m.
An interim dividend of 88.4c a share, 50 per cent franked, was declared.
Earnings before interest and tax grew 112 per cent in Japan to $51m, 18.2 per cent in Europe to 47.42m and 9.8 per cent in Australia and New Zealand.
131 new stores were also opened in the half year, including 68 in Japan, 19 in France and 15 in Germany.
CEO Don Meij said that although the business has benefited overall from the COVID-19 inspired changes in consumer trends, certain stores have been impacted negatively.
“Our view is Covid-19 has brought forward long-term demand for delivered food, ordered online, in all markets,” he said.
“At the same time, carry-out orders remain challenged in most markets, as specific customer segments (including CBD office lunches) have changed their ordering behaviour.
“This has affected individual countries differently – in some markets the growth in delivery sales has more than offset the changes in carry-out customers, in others Same Store Sales growth remains lower than expectations in the short-term.”
Mr Meij said the company was forecasting a strong full year result.
“Our team’s agile response to changing conditions has lifted our expectations for Full Year performance to be even higher than our already positive, medium-term outlook,” Mr Meij said.
Eli Greenblat 8.31am:Coles revenue lifts 8pc, dividend higher
Coles has posted an 8 per cent rise in revenue for the December half to $20.57 billion and a 14.5 per cent rise in net profit to $560 million as its supermarkets and liquor business experience increased sales from elevated levels of in-home consumption through its stores and e-commerce business amid the COVID-19 pandemic.
The supermarket giant said on Wednesday that customers favoured neighbourhood stores over shopping centre and central business district stores through the months of the pandemic, while costs for the chain remained high as it maintain a safe in-store environment for team members and customers. Although these in-store costs moderated during the first half as restrictions eased.
Sales revenue for the supermarkets division increased 7.3 per cent to $17.8bn driven by the successful execution of trading plans, tailored range changes, grocery private label innovation, growth in e-commerce, and ongoing benefits from in-home consumption throughout the reporting period.
EBIT increased by 14.4 per cent to $903m driven by growth in sales, gross margin improvement from strategic sourcing and supply chain efficiencies, partly offset by an increase in administration expenses (inclusive of costs associated with COVID-19).
For its liquor arm, led by its banners such as First Choice and Vintage Cellars, sales increased 15.1 per cent to $1.96bn reflecting strong performance across all banners, channels and categories, particularly e-commerce and larger format stores, driven by investment in service and team capability, enhanced range and growth in the store network. Liquor EBIT increased by 36.8 per cent to $104m.
Coles has declared an interim dividend of 33c per fully paid ordinary share, up from 30c in 2020, with a payment date of March 26.
Eli Greenblat 8.22am:Treasury Wine splits divisions; profit slides, dividend cut
Treasury Wine Estates, the owner of brands such as Penfolds, Wolf Blass and Beringer, has announced a new divisional operating model that from 2022 will see the global winemaker operate under three new internal divisions being its luxury brand Penfolds, Treasury Premium Brands and Treasury Americas.
A sliding profit for the first half has seen Treasury Wine cut its dividend by one quarter.
The company will also sell off some of its commercial America wine brands.
The wine group, which on Wednesday unveiled a 23 per cent fall in earnings to $284.1 million and a 24 per cent slide in net profit to $175.3m as the pandemic and Chinese tariffs reduced its shipments to the region, said it has progressed on key initiatives to deliver a future state premium wine business in the US, including the planned exit of a significant portion of the commercial brand portfolio.
In addition, Treasury Wine will explore the divestment and exit of other non-priority brands, operating assets and leases as it continues to prioritise the growth of its focus premium brand portfolio to drive future performance in the region.
Treasury Wine has been toying with the concept of a divisional or structural split for some time, and has targeted a split based on luxury wines, commercial wines and its business in the US led by its flagship Californian winery Beringer.
The winemaker announced it had suffered global pandemic related disruptions to sales channels for higher margin luxury wine in key markets, and reduced shipments in China resulting from the anti-dumping and countervailing investigations initiated by the Chinese Ministry of Commerce leading sales down 8 per cent to $1.41 billion.
There was also net material items loss of $45.6m (post-tax) recognised in the first half, primarily non-cash, relating to divestment of US brands and assets, the South Australian luxury winery expansion and the overhead and supply chain restructure.
It announced an interim dividend of 15c a share declared, fully franked, down from 20c in 2020.
Lachlan Moffet Gray 8.20am:Carsales profit jumps, South Korea earnings up 30pc
Carsales.com said earnings before interest, tax, depreciation and amortisation in the six months to December 31 lifted 18 per cent to $126m on the prior comparable period, while net profit after tax jumped 17 per cent to $74m.
An interim dividend of 25c a share was declared, up 14 per cent on last year.
CEO Cameron McIntyre said the company saw earnings growth across all geographies, with South Korea being the standout as its divisional EBITDA grew by 30 per cent.
Mr McIntyre said he anticipated a continued migration e-commerce platforms will benefit Carsales.com over the next half year, but did not provide official full year guidance, saying only he expected “moderate” revenue and profit growth for the full year due to increased investment and the conclusion of the JobKeeper scheme.
Joyce Moullakis 8.17am:Westpac earnings jump 28pc, profit doubles
Westpac has posted a “good start” to its financial year with a jump in first quarter earnings, which were buoyed by an improved economic outlook and credit quality.
Core net earnings - which exclude notable items - climbed 28 per cent to $2.4bn in the three months ended December 31, compared with the average quarterly result in the prior six months, the bank said in an ASX release on Wednesday.
December quarter unaudited statutory net profit printed at $1.7bn, more than double the second-half quarterly average of $550m.
Unaudited cash earnings also surged to $1.97bn in the quarter, up on the second-half’s quarterly average of $808m.
Notable items during the December quarter amounted to $212m and included refunds, payments, costs and litigation, writedown of intangible assets, and the impact of a loss on the sale of Westpac’s Pacific operations.
“Our first quarter 2021 result was higher than the second half 2020 average, mainly from an impairment benefit reflecting both improved credit quality and a much improved economic outlook,” said Westpac chief executive Peter King
“While uncertainty remains around the impact of local Covid outbreaks, there is cause for optimism. The economy is recovering, consumer and business confidence is strong, and the labour market has been much more resilient than expected. At the end of December there were 12.9 million employed Australians compared to 13 million in March 2020.”
The bank is, however, still managing the fallout from damning legal action by financial crimes regulator Austrac, which saw Westpac agree last year to pay a record $1.3bn penalty.
8.08am:Dow edges up to record
The Dow Jones Industrial Average edged higher to a record Tuesday as investors focused on the potential for more fiscal stimulus and the rollout of coronavirus vaccines.
The Dow industrials gained 0.2pc, building on a record from Friday, before the three-day weekend in the US. The S&P 500 ended little changed.
The technology-heavy Nasdaq Composite, meanwhile, slipped 0.3pc, dragged lower by losses in heavily weighted shares of Apple and Microsoft.
Investors in recent days have been heartened by expectations that a fresh round of stimulus spending and continued support from the Federal Reserve will support economic recovery. House Democrats are preparing to stitch together a legislative version of President Biden’s $US1.9 trillion coronavirus relief proposal this week.
Sentiment also has been buoyed by the rollout of vaccines and a drop in Covid-19 infection rates in many countries.
A better-than-expected corporate earnings season also has underpinned the market rally. With about three-quarters of S&P 500 companies having reported, roughly 80pc have beaten profit estimates, according to FactSet.
Frigid temperatures across swathes of the US have injected new momentum into the rally in energy markets. Natural-gas futures rose 8.2pc. Since natural gas is burned to generate electricity and heat, its price tends to rise during cold snaps. Analysts said production also is likely to be curtailed by the conditions.
In bond markets, the yield on the 10-year US Treasury note rose to 1.298%, from 1.199% Friday. Yields rise as bond prices fall.
Bitcoin prices crossed $US50,000 for the first time on Tuesday, according to data from CoinDesk. The digital currency traded up about 5pc for the day before receding.
Overseas, the pan-continental Stoxx Europe 600 ticked down 0.1pc.
In Asia, exchanges in mainland China were closed for the Lunar New Year holiday. Hong Kong’s Hang Seng Index rose 1.9pc in the first day of trading after the holiday period, with energy and banking stocks leading gains.
Japan’s Nikkei 225 jumped 1.3pc by the close of trading. Shares of Japanese technology conglomerate SoftBank Group surged 4.1pc to surpass their previous closing high from the dot-com bubble.
7.25am:Amazon buys e-commerce rival Selz
Amazon has quietly purchased the Australian-based e-commerce platform Selz, which enables businesses to build their own online stores.
The deal, terms of which were not disclosed, was made last month and confirmed by Selz in a blog post. US media reported the acquisition.
Selz’s operations could help Amazon to fend off challenges from the fast-growing Canadian-based firm Shopify, which offers a similar service to retailers.
Martin Rushe, founder and chief executive of Selz, said in the blog that the company had “signed an agreement to be acquired by Amazon and are looking forward to working with them as we continue to build easy-to-use tools for entrepreneurs.”
AFP, Amazon confirmed the acquisition but declined to comment on any future plans for the platform.
The deal comes with Amazon under heightened scrutiny from antitrust enforcers around the world for its growing role in online shopping.
The company has argued that it does not play a dominant role in overall retail sales despite its large share of online sales in the US and other markets.
AFP
7.20am:ASX set for weaker open
Australian stocks are tipped to open lower, after a volatile night on world markets, with Wall Street mixed and Europe weaker.
At about 7am (AEDT) the SPI futures index was down 21 points, or about a third of a per cent.
Yesterday, the ASX 200 surged 0.7 per cent to its highest daily close in almost 12 months amid, buoyant global markets and a mostly positive domestic earnings season.
The Australian dollar is lower at US77.62c.
Brent oil edged up 0.1 per cent to $US63.35 a barrel.
Gold futures are down 1.1 per cent to $US1799.00 an ounce.
7.06am:Marriott CEO Sorenson dead at 62
Marriott International Chief Executive Arne Sorenson, who created the world’s largest hotel operator by acquiring Starwood Hotels & Resorts Worldwide Inc. in 2016, died Monday. He was 62.
A Lutheran missionary’s son who was born in Japan and grew up in Minnesota, he became CEO of Marriott in 2012 and was the first person outside the founding family to head the hotel company. He was diagnosed with stage two pancreatic cancer in May 2019 but continued to serve as CEO.
The $US13 billion acquisition of Starwood created a colossus with 30 brands -- including Ritz-Carlton, Courtyard, W Hotels, Westin and Sheraton -- and operations in more than 110 countries. Marriott prevailed over rival bidders including Hyatt Hotels Corp. and China’s Anbang Insurance Group Co.
Dow Jones
5.15am:Goldman Sachs consumer platform targets ‘mass affluent’
Goldman Sachs has officially launched an online platform for small investors in its latest step to build out its fledgling consumer business.
Under the “Marcus Invest” platform, investors with as little as $US1000 can tap into Goldman’s asset allocation services, purchase exchange traded funds and take other investment decisions with a 0.35 per cent advisory fee.
The venture’s objective is to bring “the investing expertise of Goldman Sachs directly to mass affluent customers,” Chief Executive David Solomon said last month in a conference call.
Goldman Sachs has been building up its consumer-oriented Marcus business since 2016, expanding the venture to include a credit card with Apple.
The Wall Street heavyweight also has plans for a new digital checking offering for later this year, Solomon said.
AFP
5.10am:Wall Street mostly rises on stimulus prospects
US stocks mostly climbed, signalling that the major indexes could notch record highs in their first trading session after the Presidents Day holiday.
In early afternoon trade the S&P 500 edged up 0.1 per cent, and the Dow Jones Industrial Average advanced 0.3 per cent. Both benchmarks closed Friday at all-time highs. The Nasdaq Composite was down 0.1 per cent.
Investors are focused on the prospects for additional fiscal stimulus spending and support from central banks to steer a broad economic recovery. House Democrats are preparing to stitch together a legislative version of President Biden’s $US1.9 trillion coronavirus relief proposal this week. Sentiment has also been buoyed by the rollout of vaccines and a drop in Covid-19 infection rates in many countries.
“The fiscal stimulus package is looking like it will be on the larger side,” said Seema Shah, chief strategist at Principal Global Advisors. “The backdrop, if anything, has really improved. It has just firmed up what everyone was expecting.”
Frigid temperatures across swathes of the U.S. have injected new momentum into the rally in energy markets. Natural-gas futures rose 5.6 per cent.
Brent-crude futures, the benchmark in international energy markets, ticked down 0.4 per cent. The price remained near its highest level since January 2020.
Bitcoin prices crossed $US50,000 for the first time Tuesday, according to data from CoinDesk. It is up 4.2 per cent for the day and more than 73 per cent for the year.
Overseas, the pan-continental Stoxx Europe 600 wavered between gains and losses.
Dow Jones Newswires
5.00am:Europe stocks fade, Bitcoin tops $US50,000
Bitcoin rose above $US50,000 for the first time as Wall Street set new records on continued confidence of Covid-19 recovery.
Bitcoin surged to a high of $US50,547.70 in midday European trading as an increasing number of corporate heavyweights back the world’s most popular virtual currency.
The price of the cryptocurrency has soared 75 per cent since the start of the year.
Wall Street came back from a three-day holiday weekend eager to catch up with earlier rallies in Europe and Asia, and all three major indices opened in record territory on Tuesday.
“Sentiment remains supported by the bullish backdrop of positive Covid-19 vaccine rollouts and cases trends, along with highly accommodative fiscal and monetary policies, with expectations of the passage of President Joe Biden’s proposed $US1.9-trillion relief package remaining elevated,” said analysts at Charles Schwab brokerage.
The Dow passed the 31,500 points level for the first time, but as the morning wore on it struggled to hold onto its gains. The broader S&P 500 and tech-heavy Nasdaq Composite both slid back into the red.
Meanwhile, oil held close to 13-month highs on hopes of keen demand amid a severe cold snap in Texas.
European equities mostly eased after soaring the previous day. London finished 0.1 per cent lower and Frankfurt gave up 0.3 per cent. Paris ended the day flat.
Sterling soared to $US1.3952, the highest level for nearly three years, before pulling back. The euro sank to 87.06 pence, the lowest point since May.
Asia’s leading stock markets closed with strong gains and the dollar declined against the euro and yen.
In London, the mining sector was also in sharp focus on Tuesday. Shares in Glencore jumped as much as 4.1 per cent to 293.9 pence after the Swiss giant restored its shareholder dividend despite deepening losses.
Meanwhile Anglo-Australian miner BHP jumped 2.3 per cent to 2,279 pence on news of soaring profit and a bumper dividend increase by the group, before pulling back.
AFP
4.55am:Adidas to sell Reebok unit
Germany sportswear group Adidas said it will sell off its US subsidiary Reebok after struggling for years to lift the brand’s fortunes.
As part of a new five-year turnaround plan, Adidas “has now decided to begin a formal process aimed at divesting Reebok”, the group said in a statement.
It did not name any potential buyers, but said further details would be announced at a meeting on March 10.
The group said it would in future focus its efforts on strengthening the eponymous Adidas brand.
“After careful consideration, we have come to the conclusion that Reebok and Adidas will be able to significantly better realise their growth potential independently of each other,” said CEO Kasper Rorsted.
“We will work diligently in the coming months to ensure a successful future for the Reebok brand and the team behind it.” Adidas acquired Boston-based Reebok in 2006 for 3.1 billion euros ($US3.8 billion) with the goal of taking on US rival Nike.
But Reebok has struggled to shine under its German owner, despite high-profile collaborations with the likes of Victoria Beckham, Cardi B and Ariana Grande in recent years.
The brand is currently worth around 800 million euros, after several accounting writedowns.
AFP
4.52am:Amazon to make devices in India for the first time
Amazon will begin making Fire TV sticks in India, the US tech giant said, its first device manufacturing line in the country as it fights for a share of its booming e-commerce market.
Amazon is locked in a battle for dominance with Walmart-backed Flipkart and Reliance, owned by India’s richest man Mukesh Ambani, as well as thousands of local traders who have accused the US firm of driving them out of business.
Its latest announcement comes as Prime Minister Narendra Modi ramps up his flagship “Make in India” drive, aimed at urging foreign companies to manufacture goods in the South Asian nation and reduce imports.
“We are delighted to announce Amazon’s first manufacturing line in India to produce hundreds of thousands of Fire TV Stick devices every year catering to the demands of the Indian customers,” Amit Agarwal, head of Amazon India, said in a statement.
“This further reiterates our commitment to the Government of India’s ‘Make in India’ initiative,” he added.
The announcement followed last year’s pledge by Amazon owner Jeff Bezos to invest $US1 billion in the country and create a million new jobs.
The firm will work with a subsidiary of Taiwanese manufacturer Foxconn to begin production of Fire TV sticks at a factory in the southern city of Chennai later this year.
AFP
4.50am:5G phones may interfere with aircraft: French regulator
The latest generation of smartphones, 5G, can interfere with aircraft altitude instruments, the French Civil Aviation Authority warned as it recommended they should be turned off during flight.
“The utilisation of 5G devices onboard aircraft could lead to risks of interference that could potentially result in errors in altitude readings,” a spokesman for the agency told AFP.
The potential phenomenon is due to “signal interference from a close frequency source of a strength that is similar or even superior to that of altimeters.” This interference can cause errors “in instruments that are extremely critical during landing,” said the agency, known by its French acronym DGAC.
It sent a bulletin on the issue to airlines last week, recommending that 5G phones should either be turned off completely or put in “aeroplane mode” during flight Most countries have long required that mobile phones be turned off or placed in aeroplane mode due to concerns that previous generations of mobile telecommunications networks can interfere with a plane’s navigation and communication equipment.
AFP
4.45am:Bitcoin surges past $US50,000 for first time
Bitcoin soared above $US50,000 for the first time on Tuesday after jumping almost 75 per cent so far this year as heavyweight companies back the world’s most popular virtual currency.
It hit an all-time high of $US50,547.70, a 4.4-per cent gain since Monday.
“The crypto king has crossed the 50K price level for the first time as institutions are all over it,” said AvaTrade analyst Naeem Aslam.
“There is a lot of FOMO (fear of missing out) among traders as the price is going through the roof and we have limited supply,” he added.
Bitcoin later pulled back to $US49,505.35.
“The rally has still a lot of power left and the move is going to continue towards the actual target of $US100,000,” Aslam told AFP.
“Of course, there will be some bumps but investors should consider them as an opportunity to bag some bargains.” Bitcoin has been on a meteoric rise since March, when it stood at $5,000, spurred by online payments giant PayPal saying it would allow account holders to use cryptocurrency.
AFP
4.40am:Glencore losses deepen on massive write-offs
Anglo-Swiss mining giant Glencore said it plunged deeper into the red last year, hit by the “extraordinary” challenge of Covid-19 and massive write-offs, especially on a mine closure in Zambia.
The company said it had a 2020 net loss of $US1.9 billion after writing off assets worth $US5.9 billion, compared with a 2019 net loss of $US404 million following writedowns costing $US2.4 billion.
Sales tumbled 34 per cent to $US142 billion, it added.
The coronavirus pandemic and the impact on the global economy amounted to an “extraordinary” challenge for the company which mines and trades basic raw materials globally.
Glencore boss Ivan Glasenberg said in a statement the global economy was in recession in the first half of 2020, followed by a strong rebound in the second half.
The trading arm of the company saw operating profit soar 41 per cent to $3.3 billion, reflecting the huge volatility of metal and oil prices.
However, the mining arm reported an operating profit fall of 13 per cent to $US7.8 billion, it said.
AFP
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