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ASX 200 lifts as Wesfarmers and Afterpay hit records

Daily Market Update (1)

ASX 200 lifts as Wesfarmers (ASX:WES) and Afterpay (ASX:APT) hit records, IOOF acquisition waved through

The ASX200 (ASX:XJO) continued its winning streak, adding another 0.3% on Monday as US futures ticked higher with the Pfizer (NYSE:PFE) set to be in use this week. 

It was a day of records that powered the market though, with Wesfarmers (ASX:WES) and Afterpay (ASX:APT) moving 2.7% and 8.8% both hitting all-time highs. 

The former is benefitting from it’s well timed acquisition of online retailer Catch Group, the latter a recent deal with eBay Inc. (NASDAQ:EBAY) that has been beneficial for both companies. 

China formerly blacklisted Australian coal exports over the weekend, the market totalling $14 billion now faces a real challenge to remain relevant; Whitehaven Coal (ASX:WHC) fell 4.4% on the news. 

This makes for interesting reading, as according to experts Australian coal is markedly higher quality and therefore lower emitting than many alternatives, suggesting this ban may be shorter than expected.

 Sticking with commodities, Viva Energy Ltd (ASX:VEA) today received a $30 million government subsidy to keep the lights on at it’s refining plant in Geelong for a further six months as they seek to set a long-term strategy for the future.

IOOF Ltd (ASX:IFL) in the news, more lithium acquisitions for Pilbara (ASX:PLS)

The class action against superannuation manager and investment adviser IOOF Ltd (ASX:IFL), which owns Shadforth’s and other well-known brands has been funded this week according to reports. 

The litigators are seeking compensation for shareholders who held in 2014 and 2015 when misconduct ranging from insider trading and breaches of trustee duties has been alleged. 

This came at the same time that IOOF received approval from the Australian Consumer Competition Commission (ACCC) for its planned takeover of National Australia Bank’s (ASX:NAB) MLC Wealth business. 

This seems like a questionable acquisition in my view, with IFL effectively doubling down on the quasi vertically integrated structure flagged as the biggest issue in the industry throughout the Royal Commission; shares finished 2.7% higher. 

Pilbara Minerals Ltd (ASX:PLS) joined Independence Group (ASX:IGO) announcing the US$175 million acquisition of the neighbouring, but mothballed Altura lithium mine. 

The acquisition will be funded by a capital raising, of which AUD$119 million will come directly from Australian Super and the remainder split between retail shareholders; who will likely be diluted. 

US markets pointing to a weak open in Australia, oil demand cut, Biden to be confirmed this week

The triumvirate of forces continued to drive markets, being energy prices, fiscal stimulus and the Coronavirus. 

The combination of OPEC’s forecast falls in demand and hints of a full lockdown in New York and Germany sent the S&P500 to its fourth straight day of losses, down 0.4%. 

Biotech remains in the headlines after immune disorder treatment provider Alexion (NASDAQ:ALXN) agreed to a takeover offer from AstraZeneca (LON:AZN) who is set to release their vaccine in the coming weeks; shares finished 29.7% higher. 

The first doses of Pfizer’s (NYSE:PFE) have been rolled out overnight to frontline workers in what is the beginning of a long road ahead before the country returns to normal. 

Pressure continues to build on the mega cap tech players, with expectations that the EU will announce new legislation allowing fines of up to 10% of sales of the likes of Google (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN) and Apple Inc. (NASDAQ:AAPL) should they be found to have used their customers data to compete with them. 

Similarly, the Chinese Government issued both Alibaba (HKG:9988) and Tencent (HKG:0700) with ‘token’ fines for non-competitive acquisitions several years ago; shares were down 2.6% and 2.9% in early trading.

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