The S&P/ASX 200 (ASX: XJO) is set to open higher on Wednesday. Here’s what ASX investors need to know.
ASX 200 higher, Australian Super on the prowl
The ASX 200 managed to deliver another positive day on Tuesday in what has become an incredible end to the year. Yet the story changes on a weekly basis, with last week’s winners becoming this week’s losers.
Yesterday it was the consumer staples, up 1.1%, and healthcare, up 0.8%, sectors pushing the market higher with Woolworths Group Ltd (ASX: WOW) benefitting from Metcash Limited’s (ASX: MTS) strong update on Monday.
As flagged in this column, corporate activity continues to accelerate with Australian Super once again on the prowl, announcing a full takeover offer for New Zealand renewable energy and data centre provider Infratil Ltd (ASX: IFT) at NZ$7.43; a 39% premium to the last traded price.
The deal seems complex but continues the trend of huge Australian pension funds blurring the lines between ‘private’ and public markets like the ASX through which the fund can exert control. Infratil owns assets including Wellington Airport and Vodafone New Zealand, with several part-owned by the Commonwealth Super Corporation and the Future Fund. The Infratil share price finished 21% higher on the news.
Underpayment highlights ESG concerns at G8 Education
Childcare centre operator G8 Education Ltd (ASX: GEM) slumped 6.6% despite announcing a significant improvement in occupancy levels to 75.5% of its total. The company, which cares for as many as 58,000 children across the country, flagged a significant underpayment of staff, between $50 million and $80 million, that will require remediation or repayment. Interestingly, the company reported ‘wage efficiencies’ as a key contributor to its expected $98 million in earnings.
Linen and bedding seller Adairs Ltd (ASX: ADH) was one of the leaders, delivering a trading update and jumping 2.8% after flagging earnings growth guidance of 300% for the half-year to $66 million. Same-store sales for the first 23 weeks of the financial year increased 17.3% but it was the higher-margin online sales driving the recovery, up 99.7% for the financial year to date.
It was clearly an interesting time for the listing of the Dalrymple Bay Coal Terminal (ASX: DBI), which fell 16% on its first day of trading despite the attractive 7% yield on offer.
US markets higher, first vaccine deployed in the UK
Global markets continued their positive run, with the S&P 500 and Nasdaq both finishing higher overnight, 0.3% and 0.5% respectively.
The strength continued after the UK Government began its deployment of the AstraZeneca (LON: AZN) vaccine ahead of what many expect to be the US Food and Drug Administration’s decision to offer emergency use authorisation to the one produced by Pfizer (NYSE: PFE). Whilst efficacy in combatting the virus has been strong, there remain questions over whether the drugs can stop its spread, suggesting it may take some time for a return to normal.
The Australian Government is set to pass world-first laws this week requiring tech giants Google (NASDAQ: GOOGL) and Facebook (NASDAQ: FB) to ‘pay their way’ for journalistic content on their newsfeeds. The sheer dominance in these businesses is reflected in their share of online advertising spend, with Google attracting $53 and Facebook $28 of every $100 spent.
Sticking with digital media, game designer Activision Blizzard (NASDAQ: ATVI) reported that its latest ‘World of Warcraft’ game sold 3.7 million units in a single day, the fastest-selling PC game ever.
Looking ahead, the week sees the long-awaited float of Airbnb and judgement day for the UK’s Brexit negotiations with the EU.