ASX News LIVE | ASX to Fall Along with Oil Prices, Origin Takeover Deal Vote Delayed

Most Australian benchmarks finished down in the red today, with only the XTX technology index staying in the green, up +0.21%.

The ASX 200 was down -0.63% at closing bell, while the All Ords closed down -0.60%.

9 of the 11 sectors were down, with only Telecoms (+0.20%) and Real Estate (+0.11%) holding the line.

Materials (-1.44%) and Energy (-1.35%) weighed down the indices as oil prices continued to slip after the next OPEC+ meeting was delayed on squabbles over continuing supply cuts into the next year.

On the ASX 200, the individual worst performers were Nickel Industries, falling -5.84% and Star Entertainment Group, down again, falling -4.29%. Star is now down -78.31% after a brutal year but had seen a small bounce earlier in the week after signing an agreement with the NSW government over its new tax requirements.

The biggest gainers on the ASX 200 today were AMP (+6.47%), bouncing off a yearly low after reaching a settlement in the class action lawsuit brought against the company for changes made to its ‘buyer of last resort’ (BOLR) policy in August of 2019.

“This is an important step forward for our Advice business and for AMP more broadly, as it allows us to put this legacy matter behind us, which has impacted relationships with our valued advisers.

 

“We’ve worked very hard in recent years on rebuilding the relationship with advisers and we’re looking forward to working with them in the delivery of quality financial advice, at a time when Australians need it more than ever.”

Life360 was also up today, gaining +3.27% to $7.59 per share. Those gains came after dropping from $8.88 per share on disappointing Q3F23 results, which have seen its share price slide since 15 November.

The recent speeches from Michelle Bullock have put the fear of god into the market, with the market raising its bets of a potential interest rate rise in February next year.

The RBA rate tracker has seen smaller movements recently, but fears of ‘higher for longer’ persist.

Goldman Sachs has a rate cut in late 2024 for Australia. Can households hold on for that long?

Goldman forecasts the RBA cash rate to be cut late in 2024 and come to rest at 3.5% until 2028.

Now, I don't think that's going to happen.

But I seriously doubt the households deep in negative cashflow can survive rates that high for that long.

h/t @MichaelAArouet pic.twitter.com/fmZbKQSbe7

— Tarric Brooker aka Avid Commentator 🇦🇺 (@AvidCommentator) November 22, 2023

Australia’s composite Purchasing Managers’ Index (PMI) fell -1.2pts to 46.4 in the latest data. The PMI survey asks product managers who buy supplies and materials for their companies questions to understand the impact and outlook of business conditions.

The latest falls show cost pressures building up in services and manufacturing sectors and is something we should keep an eye on moving forward.

Aust Nov composite PMI -1.2pts to a weak 46.4 with falls in services and manufacturing
Price and cost pressures up a bit but well down from high with backlogs still falling. pic.twitter.com/Yv9A55UiUn

— Shane Oliver (@ShaneOliverAMP) November 22, 2023

 

The ASX 200 is down -0.58% at 7,032.3 in the early afternoon. Energy stocks continue to drag the benchmark down as oil prices continue to slide after OPEC+ delayed its next meeting after concerns raised by African members about extending oil production cuts.

Morgan Stanley suggested this was a particularly ‘critical time’ for the OPEC cartel to act in trying to stabilise prices, but so far it seems an angry Saudi Arabia has postponed the meeting to try to wrangle African producers onside.

The biggest sector down today is Materials, down -1.59% followed by Energy (-0.97%), and Discretionary (-0.92%).

Uranium stocks are gaining ground today as the spot price hits over US$80 per pound, the first time in 15 years.

Origins meeting was adjourned on the back of the new offer to no one’s surprise.

Furniture retailer Nick Scali fell nearly -9% after it revealed chief executive Anthony Scali sold $50 million of his shares.

Neometal shares are down by -16% today as the Australian battery recycling company launched its first equity raise in 11 years.

The raise will include share issuance to professional and institutional investors to pull in $7 million. As part of this placement, it will issue 36.8 million new shares at $0.19 per share.

The remaining $13 million will be raised through an entitlement offer to the company’s shareholders.

After the drop this morning, shares are trading around $0.215 per share.

Neometals managing director Chris Reed said: “We have not raised equity capital for 11 years and welcome new investors to join the register as well as those existing shareholders topping up their holdings.

Canada’s Brookfield and EIG have submitted an 11th-hour ‘Plan B’ offer in the ongoing saga of their takeover offer of Origin Energy [ASX:ORG].

The deal has been on life support since majority shareholder AustralianSuper made it clear that it considered the deal as undervaluing the energy giant.

The deal would be Australia’s second-largest buyout in 2023 after Newmont Corp paid $17.8 billion for Newcrest Mining.

With AusSuper recently increasing its stake in Origin, the pension fund now holds 17% of the company, making it an almost insurmountable obstacle to the deal being approved.

The shareholder vote requires a 75% approval of all votes passed, and while AusSuper holds less than the 25% to block the deal outright, it is understood they have swayed other large shareholders onside, as well as expectations of lower retail turnout to the vote.

The vote was meant to go ahead today, but it is widely expected to be delayed after the Wednesday night offer was sent through.

Details of the new offer

The new proposal is the third changed offer and is part of a two-pronged approach by the North American group to try to recover something from the deal.

The new offer includes a plan b that would see shareholders offered around $9.20 a share should the scheme vote fail, a 2.5% discount to the scheme price.

It would also add a rollover relief to the $9.43 share scheme, which would invite Origin shareholders to roll their stock into the bid vehicle.

Many of the votes for the deal have already been cast, but indications are that the deal is likely in trouble.

Origin shares are now on hold, but they last traded at $8.42, 10% lower than the scheme offer.

The ASX 200 opened down this morning with losses led by the Materials and Industrial sectors.

Energy stocks will be in focus today as oil prices dropped almost 5% after the delay of an OPEC meeting to later next week dampened expectations that the cartel will continue to tighten supply.

The Sunday meeting had been expected to begin in Vienna. OPEC announced the delay in a statement that didn’t mention if the group would convene online or in person on Nov. 30, although three delegates said it was expected to be in person in Vienna.

It’s understood that African producers in the wider OPEC+ are butting heads with gulf states over the extension to the supply cuts.

“Uncertainty is never good for financial markets, with markets now having to wait longer to get clarity what OPEC+ does next year,” said UBS analyst Giovanni Staunovo.

Saudi Arabia, Russia and other OPEC+ members have already pledged oil output cuts of about 5 million barrels per day, or about 5% of daily global demand, in a series of steps that started in late 2022.

Brent has fallen from near US$98 in late September, pressured by rising supplies and concern about demand and a potential economic slowdown.

Good morning all, Charlie here

The ASX 200 Futures point to a fall this morning, with futures down -0.44% to 7,072.5.

US Benchmarks were up overnight as bond yields fell to their lowest levels in two months.

Origin’s looming vote for the takeover deal by North American consortium Brookfield-EIG is reportedly delayed after the group lobbed a last-minute sweetened offer to try save the deal.

Nvidia saw a muted response to its latest earnings despite easily topping already lofty analyst expectations.

It shows investors are concerned about the possible impact of trade restrictions with China put in place by the US. Nvidia says they are expecting stronger demand from elsewhere to make up the reduced Chinese trade.

Wall Street: Dow +0.53%, Nasdaq +0.46%, S&P 500 +0.41%

Overseas: FTSE -0.17%, STOXX +0.46%, Nikkei +0.29%, SSE -0.79%

The Aussie dollar fell -0.26% to US 65.54 cents.

US 10-year bond yield +1bps to 4.40%. Australian 10-year bond yields +4bps to 4.49%.

Gold is down -0.48% today to US$1,989.79. Silver is down -0.67% to US$23.64.

Bitcoin is up +2.52% to US$37,667.10. Ethereum gained +5.40% to US$2,081.32.

Oil prices are down around -1% as African OPEC+ members pushed against calls to extend oil production cuts, talks are still ongoing and the OPEC meeting next week was pushed to the end of the week. Brent fell -1% to US$81.63, while WTI Crude fell -1.27% to US$76.78.

Iron ore gained +1.71% to US$130.70 on the Singapore benchmark.