The S&P/ASX 200 (ASX: XJO) is set to rise when the market opens on Wednesday according to the latest SPI futures. Here’s what ASX investors need to know.
ASX bounces back, Bingo share price surges
The ASX 200 finished 1.2% higher on Tuesday, benefitting from increasing corporate activity and a round of broker upgrades for mining and retail companies.
The discretionary retailing sector finished 2.0% higher on the back of an 8.0% increase in Domino’s Pizza Enterprises Ltd (ASX: DMP).
Meanwhile, the industrials sector added 1.3% after Bingo Industries Ltd (ASX: BIN) received a takeover bid, sending the share price 20.4% higher. The garbage collection business received a takeover offer from CPE Capital and Macquarie’s Infrastructure unit, valuing the company at $3.50 per share.
Industry competitor Cleanaway Waste Management Ltd (ASX: CWY) also benefitted, finishing 3.6% higher, with private investors clearly attracted to the defensive income of waste management (disclosure: I am a holder of CWY).
Mobile network operator and retailer Amaysim Australia Ltd (ASX: AYS) received a slightly improved bid from WAM Capital Limited (ASX: WAM), equating to $0.70 cents in cash or 1 new WAM share for every 2.675 AYS, with WAM Capital seeking to control the franking credits and proceeds received from the deal. Amaysim shares finished 2.0% higher. This looks to be a reasonable price for a company operating in a highly competitive sector.
Record inflows for Hub24, Tyro responds to short report
Independent platform operator Hub24 Ltd (ASX: HUB) continues to attract financial advisers to its platform, recording a record $1.7 billion of inflows in the final quarter. This took the assets in its custody to $22 billion, and closer to $31 billion once the recent purchase of Ord Minnett’s platform is included.
HUB’s average monthly inflows have hit $514 million with the so-called ‘Wexit’ or departure of advisers from Westpac, NAB and the CBA sending them to this lower-cost, flexible option. There are now 2,280 advisers using the platform, close to 10% of all registered advisers. Whilst clearly a fast-growing business, valuation is always a query in such low margin, competitive industries.
Tyro Payments Ltd (ASX: TYR) responded to what it calls ‘key factual misstatements’ in the report by ‘research house’ Viceroy, highlighting massive discrepancies and noting it was never contacted for comment. The Tyro share price rallied 25% on the news, which disputed details ranging from the number of terminals impacted, management’s response and communication. I took the opportunity yesterday to pick up some shares.
Rio Tinto Limited (ASX: RIO) confirmed that iron ore exports will fall within its original guidance, whilst confirming volumes will increase in 2020. UBS is now expecting earnings upgrades from Rio and Fortescue Metals Group Limited (ASX: FMG), with iron prices currently 60% above their forecasts for 2021.
US markets finish higher, Microsoft and General Motors team up
US markets finished broadly higher after the long weekend, with the Nasdaq leading the way, adding 1.4% ahead of the S&P 500 at 0.8%.
Microsoft (NASDAQ: MSFT) was in the headlines after reports it had invested US$2 billion into General Motors (NYSE: GM) self-driving car unit, Cruise, as it seeks to speed up its route to market. Microsoft joins Honda Motors and SoftBank Corp as investors in the loss-making enterprise.
The news sent GM to a record high, up 9.7%, as investors start to see the company as an automated rather than old fashioned operators.
Bank of America (NYSE: BAC) was the latest to report earnings, with the bank delivering a quarterly profit of US$5.5 billion, down from US$7.0 billion in 2019. Interestingly, the bank benefited from an US$826 million release from its loss reserves as mortgage delinquencies from COVID are far lower than expected.