This was published 4 years ago
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Banks and energy helped to keep the Australian share market in positive territory on Friday, closing up 0.22 per cent on Friday despite TPG’s heavy losses.
Overall, the index is down 0.52 per cent for the week, though up 9.93 per cent since the beginning of this year.
Commenting on the soft uptick today, AMP Capital chief economist Shane Oliver said: “The market’s trying to work out what Omicron means.“
Investors are unsure whether the new coronavirus variant may signal a return to lockdowns, or whether it could mean the end of the COVID-19 crisis, he added.
An independent review of the banking industry’s code of practice has recommended a range of changes aimed at extending protections for consumers, and improving lenders’ compliance.
The Australian Banking Association on Friday published a review of its code by former senior Treasury official Mike Callaghan - the first such review since the 2018 Hayne royal commission.
Mr Callaghan does not call for a complete overhaul, but has made 116 recommendations that he says would improve the code, with a view to extending consumer protections.
Consumer groups seized on the report, saying it shows banks should be doing more to look after customers’ interests.
Moderna’s co-founder expects the biotech’s vaccine will be at least somewhat effective against the Omicron variant, but says his company can quickly pump out variant-specific boosters for new strains when needed.
Speaking at the Sohn Hearts and Minds virtual investment conference, Professor Robert Langer said that despite the global jitters about Omicron, it would still take a week and a half to find out exactly how effective current vaccines are against it.
“I think the jury is still out,” he said. “I certainly expect it will be somewhat effective.”
He estimated more would be known about the effectiveness of the Moderna shot in “about a week and a half”, when results from the company’s studies into Omicron come through. “I am just speculating, but [results would be ready] say a week from Sunday, for example”.
The good news in this week’s “national accounts” for the three months to end-September is that the Delta-induced contraction in the economy was a lot less than feared – not just by the financial market economists (whose guesses are usually wrong) but by the far more high-powered econocrats in Treasury and the Reserve Bank. So now it’s onward and upward.
According to figures from the Australian Bureau of Statistics, real gross domestic product – the economy’s total production of goods and services – fell by 1.9 per cent in September quarter, thanks to the lockdowns in Sydney, Melbourne and Canberra.
This contraction of 1.9 per cent compares with the fall of 6.8 per cent in the June quarter of last year, caused by the initial, nationwide lockdown. We know that, as soon as that lockdown ended, the economy rebounded strongly in the second half of last year, and kept growing in the first half of this year – until the Delta variant came along and upset our plans.
So we have every reason to be confident the economy will rebound just as strongly in the present December quarter now the latest lockdowns have ended. We’ve yet to assess and respond to the latest, Omicron variant but, now so many of us are vaccinated, it shouldn’t require anything as drastic as further lockdowns.
Property fund manager Charter Hall is set to become the country’s biggest pub owner after investors in landlord ALE Property approved a $1.7 billion takeover.
Under the scheme, which requires NSW Supreme court and ASIC approval, the Charter Hall Long WALE REIT, offered ALE investors a cash and share deal, which was supported by the target’s board.
At a meeting in Sydney this week, ALE Property investors gave the green light with a vote of 96.7 per cent and once completed will see ALE off the ASX on December 8.
ALE Property is the country’s biggest pub landlord with 78 high-profile pubs and bottle shops across the country that are majority-leased to the newly listed drinks and pub operator Endeavour Group.
Dairy export company Fonterra has lowered its earnings guidance to 25-35 cents per share, down from 25-40 cents amid increases in its farmgate milk prices.
In a 2022 quarter one update published to the ASX, the company posted a $60 million fall in its normalised earnings before interest and taxes compared to the same period a year ago.
The company has raised its 2021-22 forecast for farmgate milk prices to NZD $8.40-$9, up from $7.90-$8.90.
The Australian share market is up by 0.3 per cent at lunchtime today, but is down 0.51 per cent overall across the whole week.
Energy, financials, materials and the industrial sector were all up strongly for the morning.
Today’s top-performing stocks are ALS and Nickel Mines, up by 3.27 per cent and 3.25 per cent respectively, with the energy, materials and industrial sectors keeping the index in the green.
On the other hand, TPG Telecom weighed on the index, down 5.74 per cent after chairman David Teoh reduced his stake in the company. This marks the largest intraday loss since June 2020, according to Reuters.
Online retailer Kogan and IT company Codan were also low performers today, down 3.23 per cent and 3.07 per cent respectively, as consumer staples and healthcare companies flagged today.
Meanwhile, investing veteran Charlie Munger said he believed today’s stock market bubble is “a little more extreme” than the dot com era.
TPG Telecom shares have slid more than 5 per cent since former founder and chairman David Teoh reduced his stake in the telecommunications company.
Mr Teoh entered into an agreement on Thursday night to sell about 53 million ordinary shares - or 3 percent - of the company’s issued share capital. The Australian Financial Review’s Street Talk reported on Thursday Mr Teoh was selling the $335 million stake in a block trade through Macquarie’s equities desk.
The sale of the stake comes eight months after Mr Teoh stepped down from TPG’s board.
TPG Telecom, which was founded by Mr Teoh, merged with Vodafone Hutchison Australia last year after a lengthy legal battle.
In a statement to the ASX on Friday morning, TPG Telecom recognised the sale of Mr Teoh’s stake, but said he and his associates are not allowed to dispose of more than 20 per cent of their aggregate shareholding in the company for 24 months following implementation of the scheme of arrangement last July.
Shares are trading down 6 per cent at $6.22 each.
Investment guru Charlie Munger says that the current stock market boom is crazier than the dot-com era bubble.
He told the Sohn Hearts and Minds conference this morning that the current boom is “a little more extreme”.
“I think the dot com boom was crazier, in terms of valuations, than even what we have now. But overall I consider this era even crazier than the dot com era.”
Mr Munger also said he remains a China fan although with the caveat that almost every capitalist is less enthusiastic about China than they were a year ago.