The Australian market is in the red for the second day, with the ASX 200 index down 0.2 per cent at lunch. Despite the sluggish start to the week, the index remains just ~1.25 per cent below a 22- month high and might need another catalyst to push back through 5800pts decisively. US markets were quiet overnight.
The major banks are in the red and holding the market back most at lunch. Losses from Telstra (TLS), insurers like QBE, IAG and Suncorp (SUN) together with mining stocks are also a further weight on the market.
Engineering group, Downer EDI (DOW) has made an all-cash takeover offer for laundry and linen services provider Spotless (SPO). SPO shares are surging by 45 per cent after resuming trade from a halt thanks to DOW’s $1.15/share offer being a 59 per cent premium to its closing price on Monday. DOW is in a halt as it raises funds to complete the purchase. DOW said the acquisition would “strengthen its position as a leading provider of services to customers in Australia and New Zealand”.
Dairy and infant formula makers are surging at lunch on reports China has delayed its new cross-border e-commerce laws ahead of the Chinese Premier’s visit to Australia this week. Blackmores (BKL) is up 14.9 per cent, Bellamy’s (BAL) is up 10.5 per cent and A2 Milk (A2M) is 4.3 per cent firmer.
Australia’s second largest telco, TPG Telecom (TPM) is up 5 per cent after posting an 11 per cent lift in 1H profit to $224m. TPM has reaffirmed it is on track to make between $820-$830m this year in underlying earnings. Despite today’s improvements, TPM shares are still near two-year lows.
New Zealand based adventure retailer, Kathmandu (KMD) is up 0.5 per cent after handing down a 6.4 per cent rise in 1H17 profit to NZ$10m. This was attributed to strong sales growth in Australia (its largest market). Online sales grew by 18 per cent and accounted for 7.4 per cent of total sales. It raised its dividend by 1c to NZ4c/share.
Premier Investments (PMV) announced a 9.7 per cent lift in 1H17 underlying profit to $100.6m and record sales of $588.6m. Stationary brand, Smiggle was the best improver, with sales lifting 26.4 per cent to $134.7m. PMV opened 33 Smiggle stores over the half, which takes the total to 272 stores. 60 per cent of its Smiggle stores are overseas.
Harvey Norman (HVN) said is not aware of any information which could explain recent trading in its securities. HVN is up 3.5 per cent today after falling by 8.2 per cent on Monday.
1.5bn shares have changed hands so far today, worth $2.5bn. 468 stocks are up, 419 down and 359 are flat.