Hello everyone! Good morning. This is Holly live from Kalkine Studio. And you’re watching
the Early Trades– a show where we share with you a glimpse of the Australian share market opening
trade scene, along with the global and domestic drivers triggering the market momentum.
Today has been deemed “Sydney free day”, but whether that has reflected positively on the
market is up in the air at the moment, as the ASX has fallen at the open, as the S&P/ASX 200
Index was down 0.8 per cent. On top of that Gambling and entertainment company
Star Entertainment Group was down 15 per cent to $3.64 after following reports of malpractice.
Technology company Xero (ASX:XRO) was down 3.6 per cent. But now pay later giant Afterpay was trading
3.6 per cent lower aand tourism company SeaLink Travel Group was trading 3.8 per cent lowe.
Petroleum company Ampol was up 4.8 per cent, insurance company IAG firmed 3.3 per cent to and
Health supplements company Blackmores was up 2.3 per cent.
On Wall Street, the Dow Jones edges 0.03 percent lower while the S&P 500
fell 0.19 percent and the NASDAQ dropped 0.4 percent. US stock finish lower last Friday
after subdued employment data and inflation fees hit the confidence of investors.
Lets look at the important newsmakers.
CIMIC Group’s subsidiary engineering company, UGL, has been awarded
two contracts in the resources and utilities sectors with a total revenue of AU$135 million.
Under the first contract, UGL will provide maintenance, projects and
turnaround services for existing client, Viva Energy, in Victoria over a two-year period.
Under the second contract, it will design and construct two greenfield switching stations
and construct approximately 65 kilometres of 330 kilowatts transmission line over 18 months for
Powerlink, to connect the MacIntyre Precinct in Southwest Queensland to the transmission network.
CIMIC Group executive chairman and chief executive Juan Santamaria
said that UGL has a national presence providing specialised engineering expertise to clients in
the resources and utilities space. The company is pleased to again work with Viva Energy and
Powerlink to support critical infrastructure for communities around the country.
Moving on.
. Health and beauty company Australian Pharmaceutical Industries (ASX:API) says it
expects to exceed the previous profit guidance it provided in July despite a broadening of
COVID-19 lockdown restrictions in NSW and Victoria. The takeover target says it expects
underlying earnings before interest and tax will be about $70 million and reported unaudited EBIT
about $28 million for the full year ending August 31. API chief executive and managing
director Richard Vincent said that API recorded a stronger trading performance through its suburban
and regional Priceline Pharmacies as well as online. They also experienced elevated trading
volumes through its Pharmacy Distribution business that they were not anticipating.
API also said the sale of its New Zealand pharmaceutical plant is expected to occur
in the first quarter of financial year 2022, and for this reason its reported EBIT remains in line
with previous guidance. API will report its full-year results on October 28.
And now before we look at other important newsmakers, its time
for a small break. But stay tuned as I’ll be back
with more trending updates.
@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Hello and welcome back. Holly live from Sydney.
Moving on to the next update.
Engineering and infrastructure management services provider Downer EDI (ASX:DOW) has entered into
an agreement to sell its Open Cut Mining East business to PT Bukit Makmur Mandiri Utama – a
mining services provider in Indonesia. The sale will occur for $150 million.
The transaction includes the transfer of the assets, liabilities, employees and
contracts comprising the Open Cut Mining East business to PT Bukit Makmur Mandiri Utama.
They have paid Downer a deposit of $16 million, with the remainder of the purchase
price payable at completion. Downer chief executive Grant Fenn said that an important
part of its urban services strategy was the exit from its capital-intensive mining businesses.
The sale of Open Cut Mining East is the last step of this process and follows the
divestments of Open Cut Mining West, Downer Blasting Services, Underground mining,
Otraco, the Snowden consulting business and its share in the RTL Mining and Earthworks
joint venture. Completion of the sale is expected before the end of the year.
Meanwhile, Insurance Australia Group (ASX:IAG) is reviewing a judgement by the Federal
Court of Australia in the second business interruption test case handed down on Friday
and will consider whether it will appeal the decision. The Federal Court found in favour of
the insurers on a significant number of policy wording questions and for policyholders on other
questions. IAG said the judgement was detailed, and a comprehensive analysis is required to
assess the impact, noting it will vary by insurer. The Federal Court has set aside time in November
2021 to hear any appeal in the Full Court of the Federal Court, as part of the test case process,
to enable any appeal judgement in the Federal Court to be finalised before the end of the year
or early in the new year. All parties have been granted leave to appeal. Insurance company IAG
said it will consider the potential impact on IAG’s business interruption provision announced
in November 2020 and any required update will be provided at the appropriate time.
And lastly, Ampol (ASX:ALD) has entered into a binding agreement to acquire Z Energy for NZ$1.97
billion, following weeks of due diligence and negotiations between the two companies.
Under the agreement, Ampol will acquire 100 per cent of the shares of Z Energy for a cash offer
price of $NZ3.78 a share. Ampol’s offer includes an adjustment mechanism where Ampol will pay an
additional cash amount of NZ0.055 cents a share per day for each calendar day that
completion of the transaction extends beyond March 31, 2022, up to a limit of NZ10 cents per share.
The Z Energy board of directors have unanimously approved the scheme and unanimously recommend
that Z Energy’s shareholders vote in favour of the deal. The takeover is still subject to
New Zealand Commerce Commission clearance and Overseas Investment Office approval.
Ampol has committed to divest its existing New Zealand business, Gull, in full to ensure any
potential competition law issues are fully addressed as a result of the scheme.
Well, that’s all for now on the early morning trades! Stay tuned to Kalkine TV as we have
many more shows lined up for you for sharing live updates
across the economy, markets and sectors. This is Sage signing off!