Boral (ASX:BLD) announces buy-back offer after $1.33b US sale: ASX 0.4% higher at noon

Market Reports

by Melissa Darmawan

The Australian share market opened higher and lifted by 0.2 per cent in early trade, then faded towards noon. Technology and mining shares are leading the gains while Industrials, Energy, Consumer staples weighed on the market. Meanwhile, greater Brisbane lockdown is set to lift at noon with travel stocks in the red despite its improved performance yesterday.

S&P/ASX 200

The index is 25 points up or 0.4 per cent higher at 6,816. On the futures market the SPI is suggesting a rise of 20 points.

Local economic news

Australian Bureau of Statistics released figures today for February.
  • International trade: Australia's trade surplus fell to $7.53 billion in February from January's record high missing market estimates of $9.7 billion.
  • Job vacancies increased by 14 per cent between November 2020 and February 2021. Compared to February 2020, job openings are 27 per cent higher.
  • Retail trade fell 0.8 per month on month compared with the earlier figures of 1.1 per cent drop due to lockdowns in Victoria and Western Australia.
  • New loan commitments for housing fell 0.4 per cent. This is the first fall since May 2020. The value of new loans for owner occupied homes dropped by 1.8 per cent after soaring 10.9 per cent to record in January.

Broker moves

UBS rates BHP (ASX:BHP) as a neutral with a target price of $42. The downgrade from a buy is due to the risk in the iron ore price as Brazilian supply recovers and Chinese demand slows.The broker now considers the risk/reward is more balanced. UBS also envisages further headwinds from latent capacity, scrap and greenfield developments. Shares in BHP (ASX:BHP) are currently 0.6 per cent higher at $45.58.

Company news

Boral (ASX:BLD) has completed the sale of its 50 per cent stake in the USG Boral joint venture to Gebr Knauf KG for $1.33 billion dollars. The proceeds will be used to launch an on market buy- back offer. The company expects to report a profit on sale after tax of $450 million. In addition to the buy-back offer, the sale proceeds will be used to reduce their net debt from $1.9-$1.5 billion. Boral intends to buy 10 per cent of shares on issue over the next 12 months. Shares in Boral (ASX:BLD) are trading at 6.1 per cent higher at $5.83.

Best and worst performers

The best-performing sector is Information technology adding 1.9 per cent while the worst performing sector is Industrials shedding 0.8 per cent.

The best performing stock in the S&P/ASX 200 is Boral (ASX:BLD) rising 6.1 per cent to $5.83 followed by shares in AMP (ASX:AMP) and Megaport (ASX:MP1).

The worst performing stock in the S&P/ASX 200 is Webjet (ASX:WEB) dropping 5.2 per cent to $5.29 followed by shares in Computershare (ASX:CPU) and SkyCity Entertainment (ASX:SKC).

Commodities and the dollar

Gold is trading at US$1,707 an ounce.
Iron ore price fell 0.5 per cent to US$166.90.
Iron ore futures are pointing to a rise of 0.8 per cent.
One Australian dollar is buying 75.86 US cents.