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S&P/ASX 200 (XJO) morning report: ALU takeover, AUSTRAC & AAPL upgrades

The S&P/ASX 200 (ASX: XJO) finished down 0.1% on Monday, a negative start to the week driven lower by the financials sector, which fell 1.1%.

Elsewhere the retail sector was hit, falling 0.8% as the Melbourne lockdown continues, whilst the IT sector was the brightest light, jumping 2.1%.

The news of the day was likely a series of announcements from the most feared regulator, AUSTRAC, which deals with Anti-Money Laundering and Counter-Terrorism Financing Compliance. In a busy morning for the regulator, it announced no less than four investigations and formal concerns about ASX-listed businesses.

Casinos continue to bear the brunt with Sky City (ASX: SKC), The Star Sydney (ASX: SGR) and Crown Resorts Perth (ASX: CWN) hit with notices, sending shares down 7.7%, 2.2% and 1.5%, respectively.

National Australia Bank (ASX: NAB) was also in the crosshairs of AUSTRAC, falling 3.2%, with the regulator raising concerns about customer due diligence and identification across each business.

On a positive note for the economy, ANZ job ads increased another 7.9% in May, up 38.8% on the pre-pandemic level. The question remains is whether these jobs are being filled as expected.

Hansen Technologies takeover? ALU rejects.

Takeovers were in vogue Monday with shares in Altium (ASX: ALU) spiking 39% after the circuit board design platform received an unsolicited offer from US-listed Autodesk (NASDAQ: ADSK). Autodesk has a similar business model in the US but management of Altium indicated whilst appreciative of the interest, the offer ‘significantly undervalues’ the business, flatly rejecting the offer — the standard response.

Similarly, shares in Hansen Technologies (ASX: HSN) jumped 23% after private equity player BGH Capital lobbed a bid. The company delivers software platforms to the utilities and pay-TV sectors with management welcoming the bid and deciding to engage with the bidder.

Shares in shopping centre owner Vicinity Centres (ASX: VCX) were flat despite broker Morgan Stanley flagging a $26 million cost to Melbourne’s lockdown, whilst the Australian Government had its credit rating moved from a negative outlook to an affirmation of their AAA rating. Whilst positive, a downgrade would have had little impact on borrowing costs for the Government or the major banks.

US markets mixed ahead of inflation, Nasdaq outperforms, Apple upgrades

The Dow Jones (DJI) briefly touch a new record on Monday, but ultimately finished 0.4% lower, along with the S&P500 which fell 0.1%. The weakness was driven by a fall in both banking, financial and materials shares after Treasury Secretary Janet Yellen welcomed the potential for planned stimulus packages to create inflation and eventually higher rates.

The Nasdaq was the strongest moving 0.4% higher after Apple (NASDAQ: AAPL) flagged a number of updates at their Worldwide Developers Conference (WWDC). These included an improvement to their FaceTime platform expected to make it a formidable contender against the likes of Zoom. Cinema chain AMC Entertainment (NYSE: AMC) continued its incredible rally, jumping 14.8%.

In global economic news, the Group of Seven nations agreed in principle to maintain a minimum corporate tax rate of 15% to reduce the ability for large global companies to stash profits in low tax environments.

The S&P/ASX 200 is expected to open mostly flat on Tuesday morning.

The Golden Rules of Investing

We might be experts in retirement, but with combined financial advice experience of 35+ years, we’ve nearly seen it all. 

In mid-2023, our senior team at Wattle Partners Financial Planning put the finishing touches on a brand-new report “The Golden Rules of Investing“.

In this free report, we outline the key principles that determine all of the portfolio construction and investment decisions of Wattle Partners. Collated over decades, this paper should be seen as a work-in-progress, constantly under review in light of the ever-evolving nature of markets. 

You’ll find the free report on my Author page. Simply click the button below to view the Golden Rules.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned

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Wattle Partners is a financial advice firm, servicing clients around Australia, specialising in retirement planning (pre and post retirement). 

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