ASX News LIVE | ASX to Open Flat; Anglo American Rejects Higher Bid from BHP

The ASX 200 closed down -0.30% to 7,726.8 as almost all sectors sold off as markets anxiously await the next CPI numbers out of the US.

Only Discretionary (+0.73%) and Health Care (+0.21%) finished the day up, while all other sectors fell in trading today.

Industrials and interest rate-sensitive Tech and Real Estate fell in afternoon trading as the bottom performers today.

Fletcher Building was once again the ASX 200s worst performer today, falling -4.18% to trade at $2.75 in the aftermath of the earnings downgrade yesterday.

Alumina was the benchmark’s top performer, up +6.88%, followed by Neuren Pharmaceuticals , up 5.98%.

Markets will likely remain in this holding pattern of trading until the next CPI print, which is due tomorrow evening AEST time.

Until then, have a great evening.

Yields on Japanese government bonds are surging to levels not seen in over a decade, fueled by signs that the central bank may reduce its debt purchases to prop up the struggling yen.

The 20-year sovereign debt yield climbed 3.5 basis points to 1.77%, the highest since 2013, while the 30-year bond yield reached its peak since at least 2011.

The benchmark 10-year Japanese government bond yield rose 2.5 basis points to 0.965%, just shy of its decade-high mark.

On Monday, the Bank of Japan offered to buy a smaller amount of bonds, sparking speculation that it could accelerate monetary policy normalization to bolster the yen’s value.

‘There’s uncertainty in the market about whether yesterday’s cut in the bond-buying amount was a one-off,’ said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management. ‘The amount could be decreased at any time, as early as Friday, which puts upward pressure on yields.’

Anglo American has rejected an improved $64.4 billion takeover offer from BHP, which valued the company 15% higher than BHP’s initial bid in April.

BHP’s CEO Mike Henry expressed disappointment that Anglo’s board refused to discuss the ‘compelling‘ merger opportunity, which he stated would unlock significant synergies by combining the two complementary mining giants.

The revised bid proposed exchanging 0.8132 BHP shares for each Anglo share, up from 0.7097 in the first offer. It excluded Anglo’s stakes in South African firms Kumba and Amplats, which would be spun off to Anglo investors before the merger.

Despite BHP’s assurances of benefiting South Africa, Anglo rebuffed the sweetened bid. This sets the stage for a potential showdown between the CEOs at an investor conference in Florida. South African politicians had criticized BHP’s initial bid over concerns about local interests.

Anglo American rebuffed a sweetened approach from BHP Group that values it at about £34 billion ($43 billion). @Paul_VLH reports https://t.co/uvrxRQ3TLk pic.twitter.com/PuU6MceHTP

— Bloomberg TV (@BloombergTV) May 14, 2024

Healius [ASX:HLS], a leading pathology services provider, saw a jump in its share price during the morning trading session today as the company announced the successful refinancing and downsizing of its debt facility.

Healius said today that the company has secured a refinancing of its debt facility, reducing its size from $250 million to $180 million. The facility’s maturity has also been extended to March 2027, providing the company with some flexibility.

This move follows Healius’ intensified internal restructuring efforts and cost-cutting measures implemented earlier this year. These initiatives aimed to bolster the company’s lacklustre performance, which has been an issue for some time, ultimately leading to the departure of its Chief Executive Officer.

In a relatively subdued trading session on the ASX, Healius shares jumped by 3.3% in this mornings trading and have since eased to be up +0.8%, with the stock trading at $1.29 per share.

Meme-stocks like Gamestop are back in vouge today with the ounce failing company’s stocks doubling overnight as ‘pack leader’ returns to social media.

The jump illustrates the current risk-on environment in which retail traders invest in seemingly worthless stocks.

Shares of GameStop more than doubled after the return of ‘Roaring Kitty,’ a former marketer at an insurance firm credited with sparking the meme stock rally of 2021.
Read more: https://t.co/VBGBPfudAQ pic.twitter.com/4muxewGGsK

— Reuters Business (@ReutersBiz) May 14, 2024

The ASX 200 is down by -0.23% at 7,731.9 around midday as tepid trading activity occurs before the Federal budget in Australia and CPI numbers tomorrow night for the US.

Australian shares are holding modestly lower near midday, with none of the benchmark 11 sectors moving more than 1% in either direction.

In Australia, the federal budget will forecast a surplus of $9.3 billion for this financial year, after which the bottom line will plunge into successive deficits that will be larger than forecast six months ago.

Economists have also warned that any handouts that temporarily bring down household bills will not rein in underlying inflation, undermining the efforts of the Reserve Bank of Australia.

Lithium and nickel miners, who have lobbied for government tax breaks, are also said to be among the budget’s big winners.

IGO, Liontown Resources and Chalice Mining are all on the rise, with Piedmont Lithium leading the charge, up by 7.7% to 21 cents per share.

Ahead of the budget, the Australian dollar was trading at US66.07 cents.

Meanwhile, BHP has inched 0.5% lower after a revised buyout offer for Anglo American was rebuffed for a second time overnight.

Shares in GUD Holdings are the best-performing on the benchmark, up 9.9% to $10.74. After the market closed yesterday, the company told investors that it was on track to meet its full-year earnings guidance of $193.5 million despite a weaker automotive market.

Hamish McLennan, chairman of ARN Media, has said he still intends to push for a deal with rival Southern Cross Media despite its buyout partner abandoning the offer. ARN shares are unchanged and Southern Cross is 1.1% lower.

Billionaire Kerry Stokes’ Seven Group is continuing to buy up shares in Boral as it pushes for full control of the cement and asphalt group. Seven’s stake in the company hit 91.2% for the first time after months of share buy-ups, alongside a push for a $1.9 billion buyout of the company. Shares in Seven are 0.7% lower, while Boral is 0.5% lower.

Billionaire Kerry Stokes’ Seven Group Holdings continues to acquire shares in Boral [ASX:BLD], solidifying its pursuit for complete control over the cement and asphalt company.

After months of share acquisitions and a push for a $1.9 billion buyout, Seven Group’s stake in Boral has reached 91.2%, marking a milestone in the takeover bid.

The deal looks likely to proceed, as Boral’s independent directors have endorsed a revised offer sweetened with dividends.

Under the updated terms, Boral paid a fully franked dividend of 26 cents on April 26, while Seven Group has announced a special one-off dividend of 30 cents upon the offer’s closure, providing an additional incentive for Boral shareholders to accept the cash-and-scrip proposal.

Shares in Boral are down by -0.87% in this morning’s trading.

The ASX 200 futures point to a flat opening this morning as markets remain in a holding pattern until the US CPI data hits markets tomorrow evening (11:30pm AEST).

Overnight US and European stocks remained rangebound +/- 0.2% from opening levels as investors hold tight before the reveal.

Analysts are tipping that this week’s CPI print may be the first to show inflation easing in six months, as some of the sectors driving previous higher CPI numbers have eased.

Auto insurance is an example of a cost that had risen over 20% in the prior CPI report but has since eased back; however, services inflation remains a sticky problem both here and in many Western economies.

The big news in Australia today will be the second rejection by Anglo American for the takeover offer by BHP. After the 15% higher offer was pushed back, BHP released a statement saying:

‘BHP is disappointed that the Anglo American Board has chosen not to engage with BHP with respect to the Revised Proposal and the improved terms. BHP continues to believe that a combination of the two businesses would deliver significant value for all shareholders.’

Wall Street: S&P 500 flat, Dow -0.21%, Nasdaq +0.29%.

Overseas: FTSE -0.22%, STOXX -0.12%, Nikkei -0.13%, SSE -0.21%.

The Aussie dollar rose +0.06% to US 66.10 cents.

US 10-year bond yields -1bps to 4.49%.

Australian 10-year bond yields flat at 4.32%.

Gold fell -0.95% to US$2,337.9, while Silver rose +0.32% to US$28.26.

Bitcoin rose +2.39% to US$62,876, while Ethereum rose +0.6% to US$2,950.

Oil Brent up +0.11% to US$83.45, while WTI Crude up +0.08 to US$79.18.

Iron ore up +0.8%% at US$116.90 a tonne.