UBS raises TPG (ASX:TPM) target price following merger approval: Aus market closes 0.1% lower

Market Reports

by Katrina Bullock

A bullish run in the back half of the session has boosted the market. However, it wasn’t enough to counteract this morning’s losses. The market closed 0.1 per cent lower today following a raft of company earnings reports. Most sectors ended above the line. At the closing bell the S&P/ASX 200 index closed 5 points lower to finish at 7,125.

Futures market

Dow futures are suggesting a rise of 43 points.
S&P 500 futures are eyeing a rise of 8 points.
The Nasdaq futures are eyeing lift of 42 points.
And the ASX200 futures are eyeing a 5 point dip tomorrow morning.

Broker moves

UBS has raised the 12-month target price on telecom major, TPG (ASX:TPM) from $6.60 to $8.40. This follows news last week that the Federal Court is allowing the company’s proposed merger with Vodafone Australia to go ahead. UBS considers the development broadly neutral for the sector. On one hand, the merger removes the potential for an aggressive fourth player in the telecom market. On the other, it creates a larger third player, the merged entity has stronger incentives to act rationally. Shares in TPG (ASX:TPM) closed 0.3 per cent lower at $8.04.

Company news

A subsidiary of GR Engineering Services (ASX:GNG) has secured an agreement with the Department of Industry, Science, Energy and Resources of the Australian Government to provide operations and maintenance services to their Northern Endeavour facility. The subject of the agreement is a floating production, storage and offtake facility. The Department is taking steps to secure the safety and security of the facility after the liquidation of the Northern Oil and Gas Australia group of companies. The subsidiary, Upstream Production Services, has safely remobilised personnel to the facility and is proceeding under an initial short term contract to provide services to the Department on commercial terms, in a nonproduction environment. Shares in Engineering Services (ASX:GNG) closed 6.4 per cent higher at 92 cents.

The Bendigo & Adelaide Bank (ASX:BEN) is looking to raise $300 million to support growth in its residential mortgage business, also to strengthen its balance sheet.

Regis Resources (ASX:RRL) has reported net profit is up 17 per cent to $93.4 million compared to the same corresponding period.

Saracen Mineral Holdings (ASX:SAR) reports further strong growth in production, with an 84 per cent increase in its underlying net profit after tax in the six months to 31 December 2019.

Brambles (ASX:BXB) has reported first half underlying profit of $US435.5 million, up 1 per cent net on the prior corresponding period.

Best and worst performers of the day

The best performing sector was Information Technology adding 1.1 per cent while Communications, the worst performing sector, went 1.1 per cent in the other direction.

The best performing stock in the S&P/ASX 200 was National Storage (ASX:NSR), rising 6.2 per cent to close at $2.40. Shares in QBE Insurance Group (ASX:QBE) and Abacus Property Group (ASX:ABP) followed higher.

The worst performing stock in the S&P/ASX 200 was Jumbo Interactive (ASX:JIN), dropping 6.8 per cent to close at $12.14. Shares in Pro Medicus (ASX:PME) and IDP Education (ASX:IEL) followed lower.

Asian markets

Mixed:Japan’s Nikkei has lost 0.8 per cent, Hong Kong’s Hang Seng has gained 0.4 per cent and the Shanghai Composite has added 1.4 per cent.

Commodities and the dollar

Gold is trading at US$1,583 an ounce.
Iron ore price rose 0.1 per cent to US$88.67. Its futures are pointing to a rise of 0.9 per cent.
Light crude is US$0.66 up at US$52.32 barrel.
One Australian dollar is buying 67.29 US cents.


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