Australian shares rose 0.6 per cent at the open pushed higher by gains among banking and property stocks to put them on course to snap a two-day losing streak following a hotter than expected May CPI print on Wednesday.
Meanwhile, Treasurer Jim Chalmers has announced ANZ’s proposal to buy Suncorp Bank can proceed subject to enforceable conditions.
Suncorp will retain its insurance operations based in Queensland on a standalone basis and said it will return the majority of the proceeds from the bank sale to shareholders by the first quarter of 2025 assuming other regulatory approvals.
“I’m neutral on the deal. If they pull it off, it might be mildly accretive to fair value, but on the other side it might cause a few headaches. Still you can see the logic in what they’re trying to do as it may contribute 5 per cent to the combined ANZ Group’s profits,” said Nathan Zaia, a banking and insurance analyst at Morningstar.
“It’s a reasonable move for ANZ to make, as they’ve been losing market share and scale is very important in banking. But now there are risks in integrating the deal. Moving customers over to one system is a risk and ANZ has had difficulties in the retail banking space in terms of processing. And anything that creates another stumbling block is a risk to its customer-facing business.”
Suncorp shares added 3 per cent in early trade, with ANZ Bank up 0.8 per cent. Shares in rival insurer IAG surged 7.2 per cent to $7.17 after it announced a major reinsurance deal and confirmed operating earnings guidance for financial 2024.
“Overall, we think IAG is a really compelling story now,” said Anna Milne, a senior investment analyst at Wilson Asset Management’s WAM Leaders Fund. “It’s a landmark dal for IAG today, the biggest transaction they’ve done. We think it’s very positive.”
Wall Street rose overnight, with traders nervous ahead of US inflation data tonight and elections in France that threaten to send political parties into power that may not bend to the will of debt markets.
Overnight, US government bond yields fell as data pointed to slowing growth, bolstering hopes for a pivot to rate cuts as the year progresses.
Stocks in focus
Lithium miners extended months of losses as prices for the key battery ingredient continued to retreat. Among the top losers on the benchmark index is Mineral Resources, down 1.7 per cent and Pilbara Mineral Resources, off 3.2 per cent.
Mirvac Group sold a $1.3b stake in a new tower to Mitsui in Sydney. Shares added 4.7 per cent to $1.90.
Insurance group IAG said it has renegotiated deals with global reinsurers and confirmed it is on track to achieve profits and margins in line with prior guidance in financial 2024.
Online retailer Adore Beauty will pay $25 million in cash for beauty brand iKOU Holdings. iKOU has three retail stores in the Blue Mountains and Byron Bay along with wholesale distribution agreements with retail stockists and luxury spas.
Adore Beauty shares lost 5¢ to 89¢.
CoinSpot’s billionaire owner grabs huge dividend payout But the company, one of the country’s largest cryptocurrency exchanges, has reported a near 75 per cent slide in profit in the last financial year.