Afterpay Ltd (ASX: APT) and Cimic Group Ltd (ASX: CIM) helped to push the S&P/ASX 200 (INDEXASX: XJO) back towards its all-time high on Friday, with the Australian share market ending at 7,090 points.
The Australian sharemarket, commonly referenced by the ASX 200 index, is within touching distance of its all-time high. Keep in mind the ASX 200 doesn’t include dividends reinvested. If you include them, the returns would be even higher.
The following Rask Education video explains how the ASX 200 works:
Afterpay (APT) Topping The Charts, ASX 200 Update
Pushing the ASX 200 higher on Friday was Afterpay, ending up 2.6%.
Afterpay is the owner of the popular “buy now, pay later” app. As of mid-2019, Afterpay had over 5.2 million registered users worldwide making it one of Australia’s true technology success stories.
Afterpay recently completed a capital raising, including a share purchase plan (SPP), to get more money into its coffers and fuel its growth. Earlier this week, Afterpay said the offer to buy shares was oversubscribed by eligible shareholders.
Given the Afterpay share price (currently $37) was above the offer price of $23 announced in June 2019, I’m not surprised it was heavily oversubscribed and then scaled back by management.
“The SPP offer was sent to approximately 40,000 eligible securityholders and over 15,000 valid applications were received, representing a participation rate of 37% based on registered holdings,”
Afterpay’s ASX statement read.
“As the value of applications, approximately $240 million, significantly exceeded the cap of $30 million for the SPP, the Afterpay Board has decided to exercise its discretion under the SPP terms to scale back applications to a total of approximately $33 million.”
Cimic (ASX:CIM) Claws Back Losses
Also leading the ASX 200 on Friday was the diversified construction business, Cimic Group.
Formerly Leighton Holdings Limited, Cimic Group is the parent company of Australia’s largest project development and contracting group, operating under multiple brands such as UGL, CBP Contractors, Thiess and Sedgman.
Earlier this week Cimic announced it would be divesting 45% of its ownership of BIC Contracting (BICC), effectively ending its exposure to the Middle East market. As a result of its decision, Cimic said it would take a one-off, post-tax hit of ~$1.8 billion, including a cash outlay of $700 million in 2020.
The news sent Cimic shares down 20%. You can read more about Cimic’s divestment and updated guidance in this Rask Media article, Cimic (ASX:CIM) Share Price Falls 20% – What You Need To Know.
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