Seven closes in Boral at 53%, Morgan cuts Boral rating: ASX trading flat at noon

Market Reports

by Melissa Darmawan

The Australian sharemarket has been choppy this morning following a wobbly session on Wall St as markets digested commentary from the Federal Reserve amid rising U.S. producer prices. At noon, the S&P/ASX 200 is 0.04 per cent or 2.9 points higher at 7,358. The SPI futures are pointing to a fall of 2 points.

Mining giants are offsetting losses in major banks with biotech CSL (ASX:CSL) down over 1 per cent and ResMed (ASX:RMD) down 0.4 per cent. Rio Tinto (ASX:RIO) is up 1.2 per cent while BHP (ASX:BHP) is trading 0.4 per cent higher. Gold miners are shining bright with big names trading over 1.5 per cent.

The local bourse was down 0.2 per cent mid-morning and has traded in a narrow range of gains and losses as it attempts to find momentum. It tipped a 0.1 per cent high shy of midday.

Buy now pay later stocks have had attention this week with U.S tech giants looking to break into this space.

Tech star Afterpay (ASX:APT) has continued to tumble, trading 1.9 per cent lower at $104.98 while Zip Co (ASX:Z1P) falling over 3.7 per cent at $7.04. Investors appear to be concerned that Apple’s two proposed pay-instalment offerings could take a strong footing when launched.

On another note, the smaller player Sezzle (ASX:SZL) has jumped 4.4 per cent to $8.31 on news that U.S. based Discover Financial Services is set to invest US$30 million into the company for US$6.58 per share.

ARB corporation (ASX:ARB) is climbing following its strong trading update, up 8.8 per cent at $45.01.

Covid-19 headlines continue to loom with flight and travel stocks mixed. Qantas (ASX:QAN) is trading 0.2 per cent higher at $4.72 with Sydney Airport (ASX:SYD) up 0.6 per cent after rejecting the takeover bid from the consortium of infrastructure investors. Webjet (ASX:WEB) is down 2.5 per cent at $4.85.

Local economic news

Australia’s jobless rate fell to 4.9 per cent in June, its lowest level since June 2011 dropping from May’s 5.1 per cent while 29,100 new jobs was added into the economy as per the Australian Bureau of Statistics. Participation rate remained at 66.2 per cent.

Company news

Kerry Stokes’ conglomerate Seven Group Holdings (ASX:SVW) has now hit 52.7 per cent in Boral (ASX:BLD) with an automatic two-week extension offering $7.40 per share for the building products company.

The nation’s largest airline hub Sydney Airport (ASX:SYD) slammed down the rubber duck stamp to reject the $22 billion takeover bid from a consortium of infrastructure investors.

Oil and gas giant Woodside Petroleum (ASX:WPL) reports a 15 per cent surge in sales revenue from the first quarter of 2021 of $1.285 billion despite its production falling 4 per cent, thanks to a recovery in oil prices.

Electrical investment manager Spark Infrastructure (ASX:SKI) has rejected a $5 billion takeover bid by private equity giant KKR and superannuation manager Ontario Teachers’ Pension Plan Board.

Broker moves

Morgan Stanley downgrades Boral (ASX:BLD) as a sell and cuts its target price to $6.80. The broker has revised the ratings and preferences for building materials companies and felt downside risks prevail for the Boral share price in the short term, with a cessation of the takeover offer coinciding with the completion of the buyback.

Morgans expects the company's index weighting to reduce, given Seven Group Holding's increased stake and downgrades its rating to sell from hold and reduces the target price to $6.80 from $7.60.

Shares in Seven Group Holdings (ASX:SVW) are trading 2.3 per cent higher at $23.38 while shares in Boral (ASX:BLD) are trading 0.41 per cent higher at $7.38

Best and worst performers

The best-performing sector is Utilities, up 1.2 per cent. The worst-performing sector is Information Technology, down 1 per cent.

The best-performing stock in the S&P/ASX 200 is ARB Corporation (ASX:ARB), trading 8.9 per cent higher at $45.06. It is followed by shares in Spark Infrastructure Group (ASX:SKI) and St Barbara (ASX:SBM).

The worst-performing stock in the S&P/ASX 200 is PolyNovo (ASX:PNV), trading 5.2 per cent lower at $2.18. It is followed by shares in Credit Corp Group (ASX:CCP) and Zip Co (ASX:Z1P).

Commodities and the dollar

Gold is trading at US$1828.07 an ounce.
Iron ore is 0.1 per cent higher at US$218.66 a ton.
Iron ore futures are pointing to a rise of 0.94 per cent.
One Australian dollar is buying 74.68 US cents. 

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