Takeovers & top 100 entries: Aus shares close 1.1% lower Friday

Market Reports

by Jessica Amir

The Australian share market snapped its three-day win, erasing half of its gains for the week falling 1.05 per cent today after most of the sectors fell into the red with Telcos lead the drag.

It comes as many analysts including Citi were surprised by the ACCC’s preliminary concerns about the potential merger with TPG Telecom (ASX:TPM) and Vodafone (ASX:HTA). With Citi saying TPG is ‘only a very small competitor in the mobile market’ and Vodafone only recently entered the fixed-line broadband market, so the two companies are not significant competitors. If the merger is blocked TPG will need to focus on its mobile network rollout and Telstra could see its market share drop, with Australia only having a three-player mobile market.

At the closing bell the S&P/ASX 200 index closed 60 points lower, at 5,602, after it lost 1.4 per cent/ 80 points over the week, taking the market 11 per cent away from its 10 year high that it hit in August.

Futures market

Dow futures are suggesting a fall of 163 points.
S&P 500 futures are eyeing a dip of 18 points.
The Nasdaq futures are eyeing fall of 60 points.
And the ASX200 futures are eyeing a 7 point fall Monday morning

Company news

Nine Entertainment (ASX:NEC) made its way into the top 100 index after the S&P Dow Jones Indices did its quarterly rebalance. It comes exactly a week after the merger with Fairfax Media (ASX:FXJ) and Nine Entertainment Co Holdings (ASX:NEC) was implemented with Nine buying 100 per cent of the issued capital in Fairfax, from Fairfax shareholders. Nine shares fell 8.9 per cent today to $1.49.

Australian Pharmaceutical Industries (ASX:API) has snapped up a 13 per cent stake in rival pharmaceutical wholesaler Sigma (ASX:SIG) and it confirmed it did make a $727 million takeover offer to Sigma’s board in October. The proposal equates to 68.6 cents per Sigma share and that represents a 69 per cent premium to yesterday's closing price. Sigma shares gained 43 per cent on the back of the news and API shares gained 8.5 per cent.

Real Estate Investment Trust Dexus (ASX:DXS) today announced external independent valuations have resulted in a total estimated $405 million or 3.1 per cent increase on prior book values for the six months to 31 December 2018. As a result of these valuations, Dexus’s net tangible asset backing (NTA) per security is expected to increase 40 cents.

Household consumer products distribution company GWA (ASX:GWA) has taken a significant step towards strengthening its water solutions strategy and accelerated growth opportunities with the proposed purchase of Methven, for $112 million.

IPOs

Gold Exploration company, Yandal Resources (ASX:YRL) started trading today. It floated with an issue price of $0.20, opened at $0.21 and it closed at $0.22

Best and worst performers of the day

The best performing sector was Utilites adding 0.2 per cent while the worst performing sector was Telcos, falling 2.5 per cent.

The best performing stock in the S&P/ASX 200 was Sigma Healthcare Limited (ASX:SIG), rising 43.2 per cent to close at $0.58. Shares in Infigen Energy (ASX:IFN) and Australian Pharmaceutical Industries (ASX:API) followed higher.

The worst performing stock in the S&P/ASX 200 was Nine Entertainment Co Holdings Limited (ASX:NEC), dropping 8.9 per cent to close at $1.49. Shares in Domain Holdings Australia (ASX:DHG) and Speedcast International (ASX:SDA) followed lower.

Asian markets

Lower: Japan’s Nikkei has lost 1.7 per cent, Hong Kong’s Hang Seng has lost 1.4 per cent and the Shanghai Composite has lost 0.6 per cent.

Wall Street

Wrapped up the four trading days this week higher: The Dow Jones added 0.9 per cent, The S&P 500 added 0.7 per cent and the tech-heavy Nasdaq gained 1.7 per cent.

Commodities and the dollar

Gold is trading at US$1,241 an ounce.
Iron ore price rose 1.4 per cent to US$67.65 and its futures.
Light crude is $1.72 up at $US53.08 barrel.
One Australian dollar is buying 71.9 US cents