The S&P/ASX 200 (ASX: XJO) is tipped to open higher this morning according to the latest SPI futures. Here’s what’s making headlines.
ASX 200 winning streak comes to an end
A weak global lead pushed the ASX 200 down 0.4% on Tuesday, with the China Iron and Steel Association flagging concerns about the ballooning iron ore price at the same time that maintenance hit export volumes in November. BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) bore the brunt, down 2.3% and 3.1% respectively.
Yet the outlook for demand remains strong after China’s industrial production was confirmed to have grown 7% in November, with retail sales also recovering, up 5%. For comparison, Australian retail sales increased by just 1.4% in October, proving the sheer scale of demand in China.
News that the Australian Prudential Regulatory Authority (APRA) had released the restrictions placed on the major ASX banks to retain 50% of their earnings wasn’t enough to spur gains in the sector, with the Commonwealth Bank of Australia (ASX: CBA) share price falling 1.0%.
This came as the RBA’s minutes were released, highlighting ‘reasonable momentum’ in the economy but flagging concerns that wage growth and hours worked remain under expectations, despite an improving unemployment rate.
WAM Capital bids on Amaysim, RFG in ACCC spotlight
Shopping centre owner Vicinity Centres (ASX: VCX) confirmed the payment of a 3.4 cent per share distribution for the six months ending in December. If annualised, it represents a yield of over 4% but importantly offers an insight into management’s confidence in its rent collection and upcoming lease renewals. Vicinity shares finished the day 1.2% lower.
Geoff Wilson of Wilson Asset Management has changed his tack, bidding 69.5 cents per share for telco Amaysim Australia Ltd (ASX: AYS). Shareholders can accept one WAM Capital Limited (ASX: WAM) share for every 2.7 AYS shares (representing value of 83.3 cents) or take the cash. A difficult decision for shareholders awaits, with the higher price needed to be adjusted for the fact that WAM shares trade at a premium to their underlying assets. Amaysim and WAM shares finished 2.7% and 0.9% higher, respectively.
Elsewhere, the ACCC lodged an action in the Federal Court against Retail Food Group Limited (ASX: RFG), alleging the sale or licensing of some 42 loss-making stores may have involved ‘unconscionable conduct’.
Finishing the day of regulation, the ACCC flagged concerns about Woolworths Group Ltd’s (ASX: WOW) proposed acquisition of refrigerated food distribution business PFD Food Services on the basis that it increases already significant bargaining power.
US markets snap losing streak
US sharemarkets broke the longest losing streak since September, with the S&P 500 improving 1.3% and the Nasdaq 1.1% overnight.
The rally came amid more certainty around a US stimulus package and the FDA now likely to give its approval for a second coronavirus vaccine produced by Moderna (NASDAQ: MRNA). Now the hard part comes in rolling the vaccine out across the country, which is expected to take at least all of 2021. Moderna stock finished 5% lower.
Chinese tech giant rallied Baidu (NASDAQ: BIDU) rallied by 11.1% after announcing its intention to use its huge technology investment to make its own autonomous electric cars.
In what has been an incredible year for IPOs around the world, Bloomberg reports that some 37% of all capital raised in IPOs has been by Chinese, rather than US companies, which gives insight into the powerful recovery in the region.