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The ASX 200 started Wednesday’s session on the back foot despite a relatively benign session for Wall Street overnight. US stocks were mixed on Tuesday despite the success suggested by the photo opportunities at the Singapore Summit. A lack of detail about North Korean denuclearisation from the Trump-Kim meeting ensured a lukewarm response from investors. The Dow Jones finished lower by just 1.6 points or 0.01%. But the S&P 500 index rose by 0.2% and the Nasdaq index rose by 44 points or 0.6%.
The ASX 200 commenced trade with a 1 point loss, before sellers pushed the index to a 40 point deficit at the low of the morning. As lunch approached the index was 37 points or 0.6% lower. Industrials and Utilities were the noted sub-sector improvers in a weaker market, whilst Information Technology names were flat as a group. Energy and Materials stocks led the declines. Weakness for Financials consolidated the weaker tone over the morning. Participation to lunch saw 1.7 billion shares exchanged, valued at $2.1 billion. 428 stocks higher, 605 were lower and 420 unchanged.
Bank names were the main weight on the ASX 200. Yesterday’s weaker lending figures continued to cast a pall over the big four banks. The latest housing finance data for April showed a continuation of recent trends; loans to investors are trending lower, while lending to owner-occupiers is moving sideways, albeit at a high level. The conclusion being drawn by economists is that a cooling in the housing market will deliver a continued moderation in lending growth in coming months. Shares in the banks were led by the CBA and NAB with falls of 1%
Utilities were supported by gains in APA Group, after the announcement of an unsolicited takeover bid. A Consortium led by Hong Kong’s CKI Group has made a cash offer of $11.00 per share for the energy infrastructure operator valuing APA at $13 billion. The shares emerged from an earlier trading halt to be 23% or $1.90 higher at $10.17. APA has opened its books to the bidding consortium to allow due diligence on a non-exclusive basis. The offer represents a 33% premium to APA’s last closing price.
Gateway Lifestyle (GTY) shares were 13% or 24 cents higher at $2.07, compared to Tuesday’s closing price of $1.83, after receiving an indicative, non-binding cash bid of $2.10 per share. The offer from Hometown Australia and Hometown America Communities would be reduced by any planned distributions and values Gateway at approximately $638 million. Hometown operates over 60 Residential Land Lease Communities (RLLC) across eleven states in the United States.
Shares in Kogan.com (KGN) where a talking point after the online retailer confirmed that CEO Ruslan Kogan & CFO David Shafer have sold a considerable parcel of KGN shares. The move follows a previous attempt made last week to dispose of $100 million in shares. In an announcement the Company advised that Mr Kogan and Mr Shafer had received an unsolicited bid for 6,000,000 shares this morning, which reluctantly accepted the bid due to personal financial commitments. KGN shares were 4% lower at lunch, having been down as much as 9% in early trade.
Published by CommSec