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ASX 200 morning report – API, WES & A2M shares in focus

The S&P/ASX 200 (ASX: XJO) started the week on a positive note, increasing 0.9% on Monday after a strong global lead over the weekend.

The biggest contributor was an unexpected announcement from the People’s Bank of China around the loosening of monetary policy. The central bank reduced the amount of capital required to be held by each of its member banks in an effort to once again stimulate lending.

The move was seen as a positive for the mining sector, with BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) adding 3.2% and 3.3% on hopes this will result in more infrastructure spending and construction.

The bearish among us on the other hand suggest this could be a leading indicator of a weaker outlook for the global economy as China’s first in, first out, V-shaped economic recovery appears to be slowing.

Within the market, the real estate sector also benefitted, up 1.3%, with the likes of Vicinity Centres (ASX: VCX) and Charter Hall Group (ASX: CHC) up 1% and 3.1% as activity picks up in commercial property markets despite the pandemic.

Wesfarmers sends API share price flying

Australian Pharmaceutical Industries Ltd (ASX: API), the owner of the Priceline chain of pharmacies, jumped 19.7% on Monday after Wesfarmers Ltd (ASX: WES) lobbed a bid to purchase the company.

The offer is $680 million at a price of $1.38 per share for the entire group, which both produces and distributes a diverse range of pharmacy products. API shares quickly closed the gap, finishing at $1.37.

API’s largest shareholder Washington H Soul Pattinson and Co Ltd (ASX: SOL) has backed the purchase, which shows Australia’s leading retail and distribution network’s willingness to double down when it sees opportunity.

A2 Milk announces restructure

On the other side of the spectrum, A2 Milk Company Ltd (ASX: A2M) continued to weaken despite announcing a ‘restructure’ of its operations following a recent chief executive departure.

The group will be split into China domestic, Australia domestic and international export business units in an effort to allow greater management focus on each division.

NRW simplifies

Mining service provider NRW Holdings Holdings (ASX: NWH) jumped 12.0% after announcing the sale of a number of leased mining assets to one of its business partners, with the deal set to reduce debt and improve capital returns.

ASX 200 today

The ASX 200 is set to open higher on Tuesday following a positive lead from US markets overnight. To find out more, check out Rask Media’s US stock market report.

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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