Home / Daily Market Update / ASX snaps three-day losing streak
ASX snaps three-day losing streak
Daily Market Update

ASX finished 0.7% higher, Crown (ASX:CWN) under offer, Fortescue (ASX:FMG) tanks

The ASX200 (ASX:XJO) overcame a weak global lead to break a three day losing streak, adding 0.7% on Monday.

Every sector was higher barring materials, with Fortescue Metals (ASX:FMG) dragging the sector lower, falling 4.3% on a further weakening of the iron ore price.

Energy was by far the highlight, jumping 2.8% on the back of a stronger oil price and a 5.7% rally in Ampol (ASX:ALD).

The news of the day, however, was the release of a takeover proposal of Crown Resorts (ASX:CWN) by $111 billion global asset manager The Blackstone Group (NYSE:BX). 

According to Crown, the offer is at a price of $11.85, a 19% premium to the previous price, valuing the business at over $8 billion. Naturally, the share price jumped 21.4% on the news.

The casino operator remains under extreme pressure just two days out from a Victorian Government Commission into their suitability to retain their casino license following the outcomes of a similar assessment in NSW.

Blackstone already owns 9.9% of the company and this appears a solid ‘out’ for the beleaguered group.

Telstra (ASX:TLS) plots a course for the future, Freedom Foods (ASX:FNP) trades again 

The other major news came from Telstra (ASX:TLS) with management releasing more details on the long-awaited ‘structural separation’.

As previously flagged, the infrastructure assets will be split into three separate subsidiary companies being InfraCo Fixed, owning the physical infrastructure and data centres, InfraCo Towers, owning the telecommunications towers, and ServeCo, delivering innovative products and services.

According to the announcement, these will now be joined by an International subsidiary, owning the company’s global operations including their subsea cables, all of which will be owned by the Telstra Group.

Shareholders will receive a share in each company according to their current allocation. 

Management highlighted the benefits of this structure, focusing on the ability to then consider the sale or monetisation of each business separately, hopefully realising value due to the greater transparency; shares finished 1.3% higher.

Insurance Australia Group (ASX:IAG) remains under pressure, falling 2.3% after announcing they could not yet quantify the costs of the NSW floods, whilst Freedom Foods (ASX:FNP) recommenced trading, falling 82.4% ahead of a massive capital raising.

More stimulus, Bitcoin instability favours hedging, markets move higher 

US markets moved higher overnight offering a positive lead for the ASX, with the Nasdaq up 1.2% and the S&P500 0.8% following more insights from the Federal Reserve

Yet once again it was all about bond rates, with a falling bond rate sending equity markets higher.

The Biden Administration is now expected to deliver another US$3 trillion in stimulus but with a particular focus on infrastructure and decarbonisation.

This will most likely be funded from tax hikes on the wealthy and corporations that have become stronger during the pandemic.

Tesla (NYSE:TSLA) is leading the market again after ETF provider ARK Invest upgraded their price target.

Federal Reserve Chair Powell was quoted as comparing Bitcoin as more akin to a hedge like gold, with its significant volatility making it near impossible to be considered an alternative to the US. So-called stable coins offered the best alternative, despite being linked to physical currencies anyway.

Leave a comment

Your email address will not be published. Required fields are marked *

  • Related
    Daily Market Update
    ESG question answered: ‘green’ super funds outperform

    The Responsible Investment Association of Australasia delivered an early Christmas present for ESG investors and trustees alike, confirming the long-debated question as to whether ‘green’ or ‘responsible’ super funds outperform. The answer was a resounding yes for those funds that are categorised as leaders according to the RIAA’s extensive survey and due diligence process. The…

    Drew Meredith | 6th Dec 2021 | More
    Daily Market Update
    As adviser numbers dwindle, pressure turns to industry funds

    As the FASEA exam deadline of 1 January 2022 nears, the significant impacts on the financial advice industry continue to garner headlines. According to reports, total adviser numbers have now fallen to below 19,000 with many more set to leave in 2022. Similarly, statistics suggest there are as many as 2 million unadvised clients in…

    Drew Meredith | 6th Dec 2021 | More
    Daily Market Update
    Measuring impact key to delivering on UN SDGs

    Since their adoption, the 17 Sustainable Development Goals (SDGs) have been a mixed bag with a long list of lessons learned by United Nations member states and private market investors alike.  The 17 SDGs present an opportunity to invest in the sustainable future of people and the planet. The opportunities cover a wide array of…

    Ishan Dan | 6th Dec 2021 | More
    Evergreen ratings highlights new venture capital prospect
    Ishan Dan | 18th Nov 2021 | More
    IN60 with Andre Roberts from Invesco
    The Inside Adviser | 18th Oct 2021 | More
    INSight#118 with Ashok Bhatia from Neuberger Berman
    The Inside Adviser | 17th Nov 2021 | More
    INSight #113 with Sebastian Evans from NAOS Asset Management
    The Inside Adviser | 15th Nov 2021 | More
    As adviser numbers dwindle, pressure turns to industry funds
    Drew Meredith | 6th Dec 2021 | More
    The Principals’ Community forges its own path
    Staff Writer | 18th Nov 2021 | More