ASX News LIVE | ASX to Bounce from Four Week Low; Commodities Fall

Australian shares rebounded today, snapping a three-day losing streak, as the ASX 200 closed 1% higher at 7,701.7 points.

This positive close came despite slightly hotter-than-expected inflation data for April, which was released on Wednesday and has kept local markets fearful of a potential Interest-rate raise by the RBA in the future.

Despite today’s gains, the benchmark ended the week down by 0.3%, as investors pushed back the timeline for potential interest rate cuts and bonds squeezed equity markets.

On Wall Street, the Nasdaq retreated 1.1% overnight, with enterprise software giant and Slack-owner Salesforce plummeting 19.7% after its fear-inducing quarterly report.

The yield on one-year Australian bonds increased 4 basis points to 4.45% during the session and has jumped by 12 basis points since Wednesday.

Investors are eagerly awaiting the US personal income, spending, and price report, which is scheduled for tonight (AEST).

This report is expected to be the next major signpost for the future direction of US interest rates. Economists anticipate that the personal consumption expenditures price index – the Federal Reserve’s preferred measure of inflation – will rise 0.2% in April.

Until then, have a great weekend, and I’ll see you here on Monday!

Shares of Telix Pharmaceuticals [ASX:TLX] are by the the top performer on the ASX 200 so far today, gaining 14.2% to nearly hit at $18 a share today.

The move was propelled by a bullish research report from Wilsons brokers, which has backed the biotech company’s meteoric rise. Its stock has skyrocketed an astonishing 1380% over the past five years.

The analysts at Wilsons cited the firm’s promising pipeline and innovative approaches as key drivers behind their optimistic outlook on the business.

Telix is a standout success in the biotechnology realm, boasting a market cap of $5.4 billion.

The independent directors of Namoi Cotton [ASX:NAM] have unanimously recommended that shareholders accept Olam Agri’s takeover offer for the company, assuming no superior bid emerges.

The offer from Olam Agri proposes to acquire all outstanding Namoi shares for 70 cents per share in cash, outbidding the competing offer from Louis Dreyfus Company by 3 cents per share.

According to the statement, ‘The Independent Expert has concluded that the Olam offer is fair and reasonable as of the date of the Independent Expert’s Supplementary Disclosure.’

Meanwhile, Louis Dreyfus Company announced in a separate statement that it had extended the closing date of its offer to 7 pm AEST on June 21.

As the takeover battle intensifies, shareholders will be tasked to evaluate both proposals to determine their favoured outcome and the future of Namoi Cotton.

Irish building materials giant CRH has received approval from the Foreign Investment Review Board (FIRB) for its proposed $2.1 billion acquisition of Australian cement company Adbri [ASX:ABC].

In February, the Adbri board unanimously recommended CRH’s offer of $3.20 per share to its shareholders. The New York and London-listed CRH made the buyout proposal in December, having already secured the support of the Barro family, which holds a 43% stake in Adbri.

With the FIRB approval now secured, the path is clear for a scheme meeting scheduled for June 12, where Adbri shareholders will vote on the proposed takeover by the Irish construction behemoth.

The successful acquisition would further strengthen CRH’s footprint in the Australian market, where it already operates several businesses, including Sunstate Cement and Dulux Paints.

Fast-food chain Guzman y Gomez is set to go public next month, announcing plans to list on the ASX. The company aims to raise approximately $242.5 million through an initial public offering (IPO), selling 11.1 million shares at $22 each.

The IPO proceeds will comprise $200 million in primary capital and $42.5 million from a secondary sell-down by select existing security holders.

The offer is underwritten by Barrenjoey and Morgan Stanley as joint lead managers, with the shares expected to commence trading on the ASX on June 20.

Guzman y Gomez (GYG) has garnered considerable support and demand from its existing shareholders, including prominent institutional investors such as Aware Super, Cooper Investors, Hyperion Asset Management, Firetrail Investments, and QVG Capital.

Notably, GYG’s other major institutional shareholders, TDM Growth Partners and Barrenjoey Private Capital, will retain significant investments in the company post-IPO.

According to the statement, they have committed to a voluntary escrow period during which they will not sell their shares until the company’s fiscal year 2025 results are released.

The ASX 200 is up by +0.5% at midday, trading at 7,665.5 as the Aussie benchmark recovers from a deeply sold position after three days of falling.

10 of the 11 sectors are in the green today, with only Tech down, as it follows a heavy sell-off on the Nasdaq last night which fell 1% as its near six week rally finally broke.

Health Care is this morning’s leader, up by +1.07%, as the major caps recovered and TELIX Pharmaceuticals saw a strong morning of trading, up bt +12.68%.

Meanwhile, in mining, the mega caps continued to see share price falls, which were balanced out by strong gains amongst gold miners, and the price of gold recovered slightly overnight.

Fortescue fell -1.86% as iron ore futures continued to drop, while BHP fell -0.67% and Rio Tino gained +0.33%.

In a major move, Canadian investment firm Brookfield has struck a deal to acquire French renewable power producer Neoen for $9.9 billion.

Under the terms of the deal, Brookfield will acquire a 53.32% stake in Neoen from its primary shareholders at a price of 39.85 euros per share, nearly 27% higher than Neoen’s last closing price.

The acquisition will make Brookfield the largest renewable energy company in Australia, as Neoen currently holds the top position as the country’s largest owner and operator of renewable energy assets.

Connor Teskey, Brookfield’s Chief Executive of Renewable Power and Transition, hailed the deal as a strategic move to bolster the company’s global footprint and technological expertise, saying:

“Neoen has built one of the world’s greatest renewable energy development platforms,”

 

“Acquiring Neoen further strengthens Brookfield’s global scale, while diversifying into key renewables markets and adding expertise in battery storage technology. We look forward to partnering with management to scale up the business to meet the growing demand we are seeing for clean power.”

This acquisition comes on the heels of Brookfield’s unsuccessful attempt to acquire Australian energy giant Origin Energy six months ago, a deal that was thwarted by Origin’s major shareholders who rejected the takeover offer.

The latest Roy Morgan brand survey shows the impact of the cost of living and the ACCC inquiry on Australia’s view of major brands.

For another year running, Bunnings remains Australia’s number one most trusted brand.

Meanwhile, we’ve seen a noticeable drop in major supermarket chains Coles and Woolworths, which fell sharply amidst ongoing allegations of price gouging.

Back in February, the ACCC launched an inquiry into alleged supermarket price gouging, the first investigation of its kind as the cost of living crisis continues to eat into Australian’s disposable income.

Today, we saw the impact that’s had on public perceptions, with Coles dropping an astonishing 221 places to finish as the 9th most distrusted brand.

Woolworths, meanwhile, fell down to the 34th most trusted brand overall.

Here are the pole positions of the most trusted brands:

Source: ABC News

Meanwhile, here were the most distrusted brands as voted by Australians:

Source: ABC News

Good morning. Charlie here,

The ASX 200 opened up +0.75% to 7,685.2 as the market broke its three-day losing streak despite weakness on Wall Street overnight.

A morning outage on the S&P 500 wasn’t enough of a circuit break to slow the sell-down as the major benchmarks fell overnight.

Interestingly, breaking from its usual tradition of ‘bad news is good news, ’ markets reacted by selling down on weaker data; let’s explain that a bit further.

Usually, data that points to any weakness in the economy has bolstered the stock market as traders assume it points to the Fed’s job being done and could allow interest rate cuts to come earlier.

In the past couple of days, we’ve had notable weakness shown in the US. First, we had the US real GDP grow at 1.3% for the first quarter, compared to the estimated 1.6%.

Then last night, we had data showing US consumers were slowing their spending. Finally, the negative cherry on top was an earnings report from Salesforce, which showed the slowest quarterly sales growth in its history.

The reaction in tech circles was a fear of overpromise and underdelivery for Salesforce and AI, sending the stock down 20% and prompting a selloff on the Nasdaq, which fell 1%.

While breaking the ‘bad news is good news’ could be taken as a bearish signal its also worth remembering we have seen a six-week rally on the US benchmarks so consolidation like this is standard.

Still, bearish voices are rising in the discourse both here and in the US, so expect volatility in the near term.

Wall Street: S&P 500 -0.60%, Dow -0.86%, Nasdaq -1.08%.

Overseas: FTSE +0.59%, STOXX +0.38%, Nikkei -1.30%, SSE -0.62%.

The Aussie dollar rose +0.37% to US 66.32 cents.

US 10-year bond yields -7bps to 4.54%.

Australian 10-year bond +1bps to 4.40%.

Gold rose +0.20% to US$2,343.39, while Silver fell -2.69% to US$31.17.

Bitcoin rose +1.0% to US$68,341, while Ethereum fell -0.61% to US$3,746.

Oil Brent is fell 1.9% to US$82.01, while WTI Crude fell -1.8% to US$77.79.

Iron ore fell -2.6% to US$115.85 a tonne.