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That’s all folks, thanks for joining us on another big day of action including Healthco soaring 15 per cent on debut to $2.32.
Lucy Battersby and Colin Kruger will be back tomorrow morning with all the latest market action.
Thanks for all your time and comments.
Good night.
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The flow of dividends from company balance sheets to shareholder bank accounts pulled the ASX down sharply on Monday morning.
The benchmark S&P/ASX200 fell as much as 1 per cent in the first hour, but recovered to close 5.6 points higher, or 0.1 per cent, at 7528.5 points.
Fortescue Metals was the main anchor, dropping as much as 11.3 per cent to a nine-month low of $18.50. The iron ore miner’s market capitalisation fell by $7 billion after it locked in $6.49 billion worth of dividends, or $2.11 per share, with about $2 billion going to founder Andrew ‘Twiggy’ Forrest.
Ex-dividend dates weighed on several other stocks, including a 2.5 per cent drop in ASX Ltd, a 4 per cent drop in Viva Energy, and a 2.7 per cent drop in Ramsay Health. But gold miner Northern Star managed to close 18¢ higher at $9.94 after going ex-dividend by 9.5¢.
Burman Invest’s Julia Lee: Dividends are going to be a big factor on the ASX this month as shown by Fortescue going ex dividend today.
Chief investment officer at Burman Invest, Julia Lee, said dividend dates were going to be a feature all month.
“September is a month of dividends and today the big one is Fortescue,” Ms Lee said.
“Add into the mix the weakness we have seen in iron ore prices in Asia today, it is down 5 per cent”.
The weaker ore price saw BHP shares falling 0.5 per cent and Rio dropped 0.8 per cent.
Lithium miner Pilbara Minerals fell 5.3 per cent after Mineral Resources sold down a 5.4 per cent stake for $328 million.
Ms Lee noted the re-opening trade was still in focus with gambling stocks like Crown Resorts and Aristocrat Leisure closing higher.
And international university placement specialist IDP Education soared to new all-time highs of $32.96 a week after major shareholder Education Australia announced it sold 15 per cent of shares on issue. Its remaining 25 per cent holding would be split among its university shareholders.
But, gold miners had a positive session after the safe-haven reached a four-week high on Friday after US jobs data missed expectations. Evolution Mining was up 4 per cent, Ramelius Resources gained 2.9 per cent, and Newcrest Mining up 2.6 per cent.
Banking stocks turned positive late in the day, except Westpac, despite the ongoing drag of lockdowns in Victoria, the ACT and New South Wales, which are all seeing rising COVID-19 case numbers.
When Joe Biden issued an executive order in July directing the US Treasury Secretary, Attorney General and the chair of the Federal Trade Commission to assess threats to competition and barriers to entry across a range of industries most of the focus was on Big Tech, Big Pharma and Big Telco.
Buried in the detail, however, was the inclusion of a review of the beer, wine and spirits sector that could result in the overhaul of complex structures that date back to the repeal of Prohibition in the US.
The 21st amendment to the US Constitution was ratified in December 1933, repealing the 18th amendment that had established the nationwide prohibition of alcohol.
The Biden administration wants more competition in the US beer, wine and spirits sectors. Credit: Bloomberg
With the end of Prohibition, regulation of alcohol was delegated to individual states and then, in 1935, the US Congress passed new legislation establishing guidelines for the regulation of the production, distribution and sale of alcohol that encouraged the states to prevent vertical integration of the sector.
That combination of state authority and the aversion to vertical integration has created a complex industry structure that has persisted for almost 90 years.
While there are three clear tiers – production, distribution and retailing – across the US the regulations differ.
Some states have delegated authority to local communities – there are “dry” counties – and some have state monopolies at the distribution and retail levels. There are no nationwide distributors and the web of state-based regulation effectively means there are 51 different markets.
Over the past quarter of a century there has been an enormous consolidation of the alcohol sector, particularly within the producer and wholesale tiers.
The clock is ticking for China Evergrande Group to raise cash and pay back $US7.4 billion ($10.7 billion) of bonds coming due next year.
Evergrande’s dollar notes plunged to record lows last week after the developer warned that it risks defaulting on its debt. A measure of the company’s ability to repay short-term borrowings deteriorated in the first half as cash and equivalents plunged to a six-year low, its earnings report showed.
Shares are down to $HKD3.81 (67¢) in Hong Kong today, the lowest they have been since 2014.
Billionaire Hui Ka Yan is the chairman of one of China’s biggest property developers, Evergrande, whose financial woes are among a slew of worrying signs in the global economy. Credit: Bloomberg
Pressure on Evergrande’s liquidity may intensify if it can’t smoothly sell assets and extend borrowings. Some non-bank creditors have demanded immediate loan repayments, Bloomberg reported, potentially further squeezing available cash to bondholders.
Evergrande’s yuan bonds are no longer accepted as collateral in the country’s key funding market. Its notes were absent from a list of securities accepted in return for cash in so-called repurchase agreements on Shenzhen’s exchange. They also couldn’t be pledged for cash on Shanghai’s exchange, according to a notice posted by the clearing house late Friday.
While Chinese regulators have urged the company to resolve its debt woes, the government has so far stayed silent on whether it will provide financial support.
Evergrande has been offering steep discounts on its properties to entice buyers and raise cash. Even so, contracted sales fell 26 per cent in August from a year earlier, according to a filing late Friday.
Altogether, the company has $40.8 billion worth of bonds on issue. After repaying $10.7 billion in 2022 it will have to repay $15 billion in 2023.
Bloomberg
Market operator ASX reports that initial public offering (IPO) activity is no longer playing catchup to the period in mid-2020 when the IPO pipeline froze as lockdowns sent markets into a panic. Once the pipeline thawed, it saw a flood of IPOs in late 2020.
But the flow has now returned to a steady trickle, with the ASX reporting 11 new listings in August this year compared to 7 last year when the market was just starting to find its feet again.
A better indicator of the market’s revival is the 43 new listings for the year to date, compared to 13 until the end of August 2020.
The ASX IPO pipeline froze in mid-2020, then gushed at the end of that year, but has now returned to normal levels. Credit: Louie Douvis
As well as the fact that initial capital raisings flushed out $6.85 billion worth of cash for the year to date compared to just $653 million up to the end of August last year.
Total capital raisings have added $18.1 billion to corporate coffers so far this year, up 94 per cent from last year’s $9.36 billion.
The ASX says 33 companies have delisted so far this year compared to 36 for the same period last year.
Newby investors also appear to be making their mark. ASX reports that the average daily number of trades was up 9 per cent in August this year compared to August last year, but the average daily value traded was up just 3 per cent to $6.4 billion.
Shares of the market operator are currently trading 2 per cent lower at $85.20 after going ex-dividend by $1.11 this morning. This compares to a low of $65.60 in March, 2021.
The ASX recently posted a 3.6 per cent slip in its full-year profits to $480.9 million, in line with analyst expectations, as income fell due to the low-interest rate environment, but also elevated costs related to its ambitious project using blockchain technology to overhaul the 20-year-old trading system, dubbed the CHESS replacement project.
An underground miner has been killed in a workplace incident at OZ Minerals’ Prominent Hill copper-gold project in northern South Australia.
Operations at the mine site have been temporarily suspended since the man’s death on Sunday, September 5, OZ Minerals said. Police and the state’s workplace safety watchdog have launched investigations into the fatal incident.
OZ Minerals managing director Andrew Cole said the company and underground mining services contractor Byrnecut were assisting investigators, and expressed their deepest sympathies to the worker’s family
“This incident has had a profound impact on our workforce and our priority is to ensure the safety and well-being of everyone at site,” Mr Cole said.
Oz Minerals' Prominent Hill mine produces copper and gold.Credit: Bloomberg
The Minerals Council of Australia, an industry group for the nation’s big mining companies, said it was deeply saddened.
“We send our condolences to the family, friends, emergency responders and colleagues of the deceased,” Minerals Council chief executive Tania Constable said.
“The minerals industry is committed to, and working hard on, eliminating fatalities, injuries and occupational illnesses, with a strong focus on building and sustaining respectful workplaces.”
Shares in Oz Minerals are down 1 per cent today to $24.02. The materials sector is under-performing the rest of the market today, mostly thanks to Fortescue falling 10.7 per cent after going ex-dividend by more than $1.
Shares in Hansen Technologies have improved slightly since opening nearly 15 per cent lower at $5.25 this morning after a private equity firm walked away from a takeover offer. Shares were last at $5.62, which is 8.3 per cent below Friday’s close.
Hansen just told the market it will hold a conference call with investors and analysts at 10.30am on Tuesday (registration details on the ASX announcement), which should shed some more light on why the $1.3 billion offer was withdrawn after due diligence.
“We are surprised to see BGH terminate its bid, as we had assumed the co-operation with CEO Andrew Hansen would smooth the due diligence process,” RBC Capital Markets analyst Garry Sherriff wrote in a note to clients this afternoon. He noted that last Thursday’s full-year results showed organic growth returning to the business following deals won in 2020-21.
“Interesting see what exactly BGH came across in its due diligence to lead them to drop their offer,” he added.
A $27 million ASX-listed firm this afternoon told shareholders it had received government funding to research the efficacy of its powdered milk products against SARS-CoV-2.
Penny-stock Jatcorp this afternoon said it has received “significant Commonwealth financial assistance” for the commercialisation of its Jinvigorate Platinum and Moroka Platinum milk formulas “that demonstrated in a research project undertaken with The University of Sydney they neutralised SARS-CoV-2 infection in certain circumstances”.
Could milk powder really improve immunity against COVID-19?
JATCorp itself has invested more than half a million dollars in research and says it has now received funding from the Department of Industry, Science, Energy and Resources for a 12-month clinical trial to be done by RMIT costing $200,000. The trial will be called “Immune enhancing efficacy of LF-Ig (lactoferrin) formula in healthy human subjects”
Now, the federal government has tipped in $55,000 as part of its Innovations Connections grant program, designed to bring businesses and the research sector closer together to “develop new ideas with commercial potential”.
JATCorp’s hypothesis is that 75 healthy humans given its milk formulas will exhibit “improved immune function and responses to a model vaccine, and may be better protected against upper respiratory tract infections (such as Flu and COVID).”
Indeed, a COVID-beating milkshake would have a lot of commercial potential.
JATCorp shares are up 3.3 per cent in afternoon trade to 1.5¢.
Healthcare is the name of the game today with a new listing and new acquisitions in the booming sector.
The highly anticipated float of the David Di Pilla-backed HealthCo REIT (HCW) took place at 11 am this morning, with the first trade at $2.20, jumping briefly to $2.30.
The Healthcare and Wellness REIT was underwritten at $650 million with a list price of $2 per unit. It will sit alongside the $500m unlisted HealthCo fund. The listed and unlisted funds are a spin-off from the Home Consortium empire set up by the former UBS investment banker Di Pilla. It owns a range of private hospitals and medical centres.
HomeCo executive chairman David Di Pilla praised HomeCo’s employees as the float of the HealthCo spin-off this morning. Credit: Supplied
Di Pilla started HomeCo with former Masters sites five years ago and listed it in October 2019 with the backing of his former UBS colleague Matthew Grounds together with the Oatley family and Aussie Home Loans founder John Symond.
Last year the HomeCo Daily Needs REIT was listed and owns $1.6 billion of neighbourhood and large-format malls weighted to the eastern seaboard.
At the virtual listing this morning Di Pilla said: “Home-Co team you are a brave, courageous and elite team of individuals that are performing at the highest level”.
Meanwhile, the $11.4 billion diversified giant Dexus is also expanding its medical and health care portfolio with the purchase Arcadia Pittwater Private Hospital in Sydney for $50.5 million from Breckenridge Funds Management.
The building is 5-level private sub-acute rehabilitation hospital located in Warriewood on the Northern Beaches of Sydney.
The Dexus managed, Dexus Healthcare Property Fund, will lease the site to the sitting tenant, Arcadia Health Care for a 26.5 year term. The fund has $1.3 billion assets under management across nine assets after $600 million of healthcare acquisitions in the 2021 financial year.
Rob Lloyd, managing director of Breckenridge said the sale of the property will deliver an “excellent result for our investors”.
Dexus shares are down 0.5 per cent to $10.58 in early afternoon trading.
Noni B and Rivers owner Mosaic has confirmed the details of its capital raising after a lengthy delay, revealing that retail giant Spotlight will take a $10 million stake in the business.
Shares dropped as much as 16.5 per cent to an 18-month low of 38¢ when trading resumed at 12.30pm today. Shares were last at 43¢.
Mosaic told shareholders on Monday it would look to raise $32 million via a convertible note raise, $10 million of which would be issued via a strategic placement to Danfin Pty Ltd, a subsidiary controlled by the founders of Spotlight Group.
Mosaic Brands largest shareholders is private equity firm Alceon Group with nearly 36 per cent of shares. Credit: Louise Kennerley
The remaining $22 million will be offered to shareholders in a pro-rata non-renounceable entitlement offer. Shareholders will receive one share for every 4.39 they own.
Mosaic is undertaking a capital raise to bolster its working capital levels to get through the current New South Wales and Victorian COVID-19 lockdowns, which have caused significant uncertainty for the business and seriously disrupted trading.
“Following completion of the offers, Mosaic Brands expects to be well funded through the current period of disrupted trading, based on conservative assumptions around lockdown easing measures and timing of stores re-opening,” the company said.