Southern Cross Media tumbles on Nine's affiliate deal with WIN: Aus shares 0.95% higher at noon

Market Reports

by Katrina Bullock

The Australian share market opened higher following strong positive leads from Wall Street. The Tech sector is leading the way and the only sector in the red is Consumer Staples.

The S&P/ASX 200 index is 64 points or 0.95 per cent higher at 6,778. On the futures market the SPI is 50 points higher.

Broker moves

Citi rates Flight Centre (ASX:FLT) as a sell, with a price target of $16.80. The broker believes the travel company will be a secondary beneficiary of the Federal Government’s domestic tourism stimulus package. Australian domestic leisure equates to around 9 per cent of the group’s pre-covid-19 total transaction value and circa 5 per cent of group profit. Citi believes the stimulus package is likely to put pressure on state borders to remain open. While it believes Flight Centre has “ample liquidity” it remains concerned about the execution risk related to the significant changes to the store network, sales force, channel mix and cost structure. Shares in Flight Centre (ASX:FLT) are trading 3.3 per cent lower at $18.79.

Company news

Nine Entertainment Co. Holdings (ASX:NEC) and WIN Corporation have signed a new regional television affiliation agreement. It will last for at least 7 years and will see WIN broadcast Nine’s metropolitan free-to-air television content from channels 9, 9Go, 9Gem and 9Life into markets including Tasmania, regional Western Australia, Victoria, Queensland and Southern NSW. The deal commences on 1 July 2021 and will see WIN pay an affiliation fee of around 50 per cent of its regional advertising revenue to Nine, as well as providing advertising airtime across its television and radio network. Nine’s CEO Hugh Marks says “the terms of this new affiliation agreement should be positive to Nine’s EBITDA from the 2022 financial year, through the broader reach of Nine’s channels and by enabling incremental efficiencies across both sales and news.’ This comes as Nine decides not to extend Southern Cross Media’s (ASX:SXL) affiliation agreement, which is set to expire on 30 June 2021. The news has caused shares in Southern Cross Media (ASX:SXL) to tumble over 10 per cent this morning. Meanwhile, shares in Nine Entertainment Co. Holdings (ASX:NEC) are trading 0.5 per cent higher at $3.04.

Best and worst performers

The best-performing sector is Information Technology, adding 2.7 per cent, while the worst performing sector is Consumer Staples, shedding 0.04 per cent.

The best performing stock in the S&P/ASX 200 is Service Stream (ASX:SSM), rising 6.5 per cent to $1.23, followed by shares in Mineral Resources (ASX:MIN) and Oz Minerals (ASX:OZL).

The worst performing stock in the S&P/ASX 200 is Flight Centre Travel Group (ASX:FLT), dropping 3.3 per cent to $18.79, followed by shares in Treasury Wine Estates (ASX:TWE) and Tassal Group (ASX:TGR).

Commodities and the dollar

Gold is trading at US$1,725 an ounce.
The Iron ore price rose 3.7 per cent to US$170.70.
Iron ore futures are pointing to a rise of 2.4 per cent.
One Australian dollar is buying 77.92 US cents.

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