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Here are today's biggest winners and losers among the top 200 stocks:
The huge payday Aquila Resources executive Tony Poli and his shareholders are set to receive includes a large chunk of bonus or “free” shares accumulated over a decade.
Aquila was the subject of a $3.40 per share bid by Aurizon and Baosteel today, valuing Poli’s stake in the company he helped float in 2004 at slightly more than $400 million.
Included in that stake – as is the case with every Aquila shareholder that has backed the company since its $600,000 float in 2000 – are a huge amount of bonus shares, which have made Poli and other directors extremely rich.
Starting at the end of 2004, Aquila undertook each year until 2010 the awarding of bonus shares at nil cost to each shareholder.
Just before Christmas in most years, shareholders received one new bonus share for every five or 10 held, though in 2006 investors got one share for every share they owned – effectively and instantly doubling the value of their stake.
Poli, a former accountant himself, has received about 77 million bonus shares since 2004. He has sold down some of his stake since then, including offloading about $20 million worth of shares in 2010, and now holds close to 120 million shares.
The sharemarket has closed slightly higher, following a last-minute push higher.
The benchmark S&P/ASX200 squeezed out a gain of 4.1 points, or 0.1 per cent, to 5462.2, after trading lower for long stretches of the session. The broader All Ords gained 4.6 points, or 0.1 per cent, to 5443.3.
Among the sectors, materials jumped 1 per cent, while financials slipped 0.4 per cent.
The two largest sectors diverged today: mining stocks rose on stronger commodity prices and a takeover bid, but banks fell despite a better than expected earnings report from Westpac.
"Lofty share prices in the banking sector are producing a “sell the fact” reaction to bank reports," CMC's Michael McCarthy notes: "Fears that bank share prices will fall more than the value of upcoming dividends saw the sector lead the market lower."
US wheat futures have soared as much as 3.4 per cent to an 11-month high on fears that recent hot, dry weather will curb production in the United States, the world's largest exporter.
Corn edged lower for a fourth straight session, though the strength of wheat capped losses. Soybeans rose for a second straight session.
Chicago Board of Trade July wheat futures rose 2.2 per cent to $US7.31-3/4 a bushel, just below the session peak of $7.40-1/2 a bushel, the highest since late June 2013.
"It has been very hot in the Southern Plains, with temperatures between 90-100 degree Fahrenheit (32.2-37.8 Celsius)," said Andrew Woodhouse, grains analyst, Advance Trade Australasia. "It puts another nail in the coffin of the US hard-red wheat crop."
Talks are underway to settle a class action over the billion dollar collapse of agribusiness Great Southern.
The agricultural projects manager, which raised $1.8 billion and managed 45 investment schemes, collapsed in 2009. A trial concluded in October 2013 and a judgement is pending.
Bendigo and Adelaide Bank, which had loans to investors in Great Southern managed investment schemes, has confirmed settlement talks are being held by the parties involved. No agreement has been reached, and if there is an agreement struck, it would require court approval, the bank said.
Westpac chief executive Gail Kelly says Australia needs tough spending cuts to deal with a rising deficit.
Unlike ANZ boss Mike Smith, who last week criticised a proposed new tax or deficit reduction levy he said would damage confidence and entrepreneurialism, Kelly would not comment on proposed government policies.
However she rejected the suggestion that any budget upheaval, whether it be taxes on workers earning about $80,000 or cuts to nearly all government agencies, would hurt an already fragile economic recovery.
‘‘We all know it’s going to be a tough budget, it has been well flagged and it needs to be a tough budget,’’ Kelly said today. ‘‘The fiscal deficit issue we have is proving to be quite intractable.’’
In relation to confidence, budget measures tended to have medium-term element to being rolled out, giving people time to absorb them and deal them into the economy, she said.
Kelly said she liked the Business Council of Australia’s Jennifer Westacott’s view that budgets should contain four planks to deliver: economic growth; efficient expenditure and revenue and good social policy including skills training.
In August 2011 representatives of supermarket giant Coles approached energy drink maker Red Bull for a $200,000 payment in what insiders at the supermarket called, quite plainly, the ‘‘direct ask approach’’.
Indeed, Coles had calculated the value of the benefit to Red Bull of its improved supply chain at $400,000 but thought it would be a sport and only ask for half that amount from the beverages company.
The casual request for the cash was part of a pilot program where Coles sought payments from some of its key suppliers, and the biggest suppliers in the Australian grocery sector, to help pay for what it claimed was improvements to the supermarket’s supply chain.
In nearly 60 pages of stunning documents lodged with the Federal Court this afternoon, the inner workings of the nation’s second biggest supermarket group have been laid bare, forming part of the case launched against it by the competition watchdog this morning.
It started with a briefing to Boston Consulting Group whereby Coles asked the firm to help develop strategies to improve its pre-tax earnings.
According to court documents, a target of $30 million was chosen to squeeze from suppliers and even a script was written to help Coles representatives talk to their supplier accounts and to get them to hand over the cash.
Read more on how the ACCC claims Coles milked suppliers
Shanghai copper has edged up to near its highest in two months, supported by steady local demand as markets returned from a two-day holiday and tracking gains in London copper prices that climbed on hopes of the US economy gaining speed.
Demand for copper in China improved in the past month, boosted by a shortfall of metal in the domestic market and steady second-quarter consumption, typically the peak season for usage. The outlook for copper prices, however, was muddied by the latest economic data that showed slowdown in China's manufacturing sector.
"Every time (copper) has tested the lower end of support it has found buying - but we need a fresh catalyst to make it break its current range. It looks range bound for now," says Rickin analyst Tim Radford.
The most-traded July copper contract on the Shanghai Futures Exchange climbed 0.5 per cent to 47,830 yuan ($US7600) a tonne, after earlier climbing as high as 47,920, bumping up near two-month highs of 48,160 a tonne, hit on April 28. Markets were closed on Thursday and Friday.
LME copper chalked up gains of 1.1 per cent on Friday. The London Metal Exchange will be closed on Monday for a public holiday.Back to top
Gas firm WestSide has rejected as undervalued a takeover offer from China's diversified energy company Landbridge Group that valued the company at $177.6 million.
Landbridge, based in Shandong, China, launched the bid for the Queensland-based coal seam gas company to gain entry into northern Australia's fast-growing gas industry. It currently owns a 3.2 per cent stake in WestSide.
WestSide said the proposal, which was already increased to 40 cents per share a week ago from 36 cents, did not represent fair value as it did not take into account recently announced gas sale deal with a consortium including Santos, Total and Korea Gas Corp.
The gas sale agreement could generate over $110 million in annual revenue to WestSide at the maximum production rate, the company added. It recommended shareholders reject the Landbridge offer.
WestSide owns the Meridien CSG field in Queensland state, where three large liquified natural gas (LNG) projects are being built and are due to begin operating over the next two years.
WestSide shares are up 1.3 per cent at 38 cents.
News Corp is believed to have paid more than $200,000 for explosive photos that show billionaire gaming mogul James Packer exchanging punches with former best man and Nine Entertainment chief executive David Gyngell.
Media outlets were being approached to bid for rights to the photos this morning, sparking a bidding war for the images, sources told the AFR.
The images were taken outside Packer’s multimillion-dollar Bondi Beach home on Sunday afternoon and show the pair shaping up to throw punches on a busy street in broad daylight.
They end up wrestling on the ground before being separated by people who appeared to be Packer’s bodyguards. An enraged Packer had to be restrained while a barefoot and bearded Gyngell appeared equally livid.
This morning, the two executives released a joint statement saying: “We have been friends for 35 years and still are. In that time we have had our fair share of ups and downs. We respect each other and neither of us will be commenting further.”
Here's a good chart from the US's Bureau of Labour Statistics, which looks at changes in costs and prices over the past decade. As the chart shows, essentials have become more expensive while non-essentials have fallen (sometimes sharply) in price.
Big TVs became much cheaper while essentials like food, health care & child care became more expensive pic.twitter.com/R70THUwaI8— Conrad Hackett (@conradhackett) May 5, 2014
Contrarian fund manager Simon Marais is poised to call an extraordinary general meeting this week in to oust the Roc Oil board over anger about the company's $800 million "merger of equals" with Horizon Oil, which is set to proceed without being put to Roc shareholders.
Marais, of Allan Gray, which is Roc's biggest shareholder with a 19.9 per cent stake, has been sounding out replacement directors to offer up should fellow investors back his bid to overhaul the board. He is highly critical of the friendly zero-premium merger not being put to Roc investors.
A loophole in listing rules allows one company to buy another with scrip without getting approval from its own shareholders. Only Horizon shareholders can vote on the deal.
"It is getting pushed through by a merchant bank that gets paid a success fee, they are exploiting this little loophole," Marais says. "It is being done at a massive discount (for Roc investors) and the savings of ordinary Australians are being used for some massive empire building. But they are trying to avoid scrutiny at all costs."
Marais said he wanted to give the board - including Roc chairman Mike Harding, chief executive Alan Linn - and its adviser more time to reconsider and put the merger to investors for a vote. But he was planning to lodge the paperwork this week to call a vote on the board revamp.
It's been three months since Australia's immediate economic outlook took a turn for the better, a turn the federal government has insisted on ignoring at any price, Michael Pascoe notes in his weekly video:
Business Week: no good news
It's been three months since Australia's immediate economic outlook took a turn for the better, a turn the federal government has insisted on ignoring at any price.
Most regional markets are trading lower, with worries over China's economy weighing on investors after a private gauge of Chinese manufacturing came in lower than expected.
- Japan (Nikkei): closed
- Hong Kong: -1.5%
- Shanghai: -0.75%
- Taiwan: -0.1%
- Korea: closed
- ASX200: -0.1%
- Singapore: -0.25%
- New Zealand: -0.7%
‘‘The economy is suffering from relatively weak growth momentum,’’ Societe Generale economist Yao Wei said after the release of the HSBC/Markit manufacturing PMI. ‘‘It’s a structural problem. The economy will remain weak and the deceleration is not over yet.’’
Building approvals fell in March but remain strong over the year, amid expectations of a strong lift in construction activity in coming quarters, economists say.
The number of residential building approvals slipped by 3.5 per cent in March to take the annual rate of growth to 20 per cent.
The fall was driven by the volatile multi-unit segment, which dipped by 7.5 per cent for the month.
The fact that building approvals were still 20 per cent higher than a year ago meant "there is still a significant boost coming to construction and spending which will help offset the winding down of resources investment from its recent peak", Commonwealth Bank senior economist Michael Workman said.
"The trends in building approvals data will help significant parts of the economy through rising revenues, fuller order books, more employment and higher retail spending. Building multipliers are among the strongest in the economy."
Less than six months since Treasurer Joe Hockey blocked Archer Daniels Midland’s $3 billion tilt at GrainCorp, UBS analyst Jordan Rogers thinks the east coast grains handler could become the hunter rather than the hunted.
Competition in the east coast grains market has been heating up – as evidenced by Qube Holding’s new Quattro Grain JV – and Rogers says GrainCorp may look for acquisitions and rationalise its grain-storage network to boost its return on equity amid growing competition.
Rogers thinks GrainCorp could make another run at listed feedstock and rendering company Ridley Corp or take a much bigger bite and merge with WA grains powerhouse CBH.
“We would view Ridley Corporation’s feedmilling and meat rendering assets as being highly complementary to GrainCorp’s assets, with close overlapping of grain silos and feedmills,” says Rogers.
GrainCorp made a hostile bid for Ridley in 2008. Ridley’s past few results have been lacklustre but any bid would be complicated given US private equity firm AGR Partners owns almost 20 per cent of Ridley.
GrainCorp shares are up 0.5 per cent at $8.98.
Nine Entertainment chairman David Haslingden has stood by his chief executive, David Gyngell, following a violent public brawl with his friend, billionaire James Packer.
‘‘David Gyngell has had and continues to have the full support of the boardin his role as CEO of Nine Entertainment Company,’’ Haslingden said in a prepared statement.
Gyngell issued a statement this morning saying: ‘‘We have been friends for 35 years and still are. In that time we have had our fair share of ups and downs. We respect each other and neither of us will be commenting further."
Inflation has jumped by an "alarming" 0.4 per cent to take the annual rate to 2.8 per cent in a sign that the strengthening consumer prices could see the Reserve Bank raise rates by the end of the year, a private survey has found.
The monthly survey, by TD Securities and the Melbourne Institute, was released this morning and showed that inflation rose by 0.4 per cent in April after a 0.2 per cent lift in March.
The increase took the inflation gauge to 2.8 per cent, the highest annual rate since September 2011, the survey showed. Meanwhile, the trimmed mean, which strips out monthly volatility, leaped by 0.5 per cent to take the year-on-year rate to 3.1 per cent.
"This first taste of the June quarter reveals an alarming jump in headline and trimmed mean inflation, of which only a portion can be attributed to seasonality, with annual rates for both measures sitting on top of the RBA's 2 to 3 per cent target band," TD Securities head of Asia-Pacific research Annette Beacher said.
She added that the case for keeping the cash rate at its record low of 2.5 per cent "is no longer there".
"Our base case of lifting the cash rate by 50 basis points by year end may look odd right now, but there is clear evidence that the economy is returning to trend growth, employment momentum is building and inflation pressures are not abating. These factors are expected to more than offset whatever lies within the May 13 budget."Back to top