The Match Out: ASX up a touch today, down around 1% for the week, Crown gets a bid (again)

James Gerrish

Market Matters

The market finished marginally higher today but was down around 1% on the week, thanks to weakness among the financials, courtesy of Commonwealth Bank’s (ASX: CBA) disappointing update. Over the course of the week, the Financial sector was off -3.6% while Materials fell by -1.62%, making it a tough ask for the broader market. IT +2% and Healthcare +1.71% did an admirable job.

  • The ASX 200 finished up +17points / 0.23% at 7396 today.
  • Healthcare up nearly 1% the standout while the broader industrials lagged, off -0.61%.
  • Crown Resorts (ASX: CWN) +16.57% in the sights of Blackstone for a third time – more on that below.
  • Broker upgrades push Altium (ASX: ALU) +5.16% to new record highs; it’s understandable now why management was so adamant to reject the Autodesk bid.
  • Interesting comments today from CBA’s CEO Matt Comyn on crypto, “We see risks in participating, but we see bigger risks in not participating.” That sums it up pretty well!
  • The Uranium sector is one we’re keen on and hold Paladin (ASX: PDN) in our Emerging Companies Portfolio, however worth highlighting that the stocks are pricing in substantially higher U308 prices – in the case of PDN, it’s pricing in Spot Uranium at US$93/lb, when its closer to half that.
  • Spot Gold was a touch higher in Asia, hovering around $US1862 at our close.
  • Asian markets were mixed, The Nikkei in Japan +0.44%, Hong Kong -1.5% & China +0.26%.
  • US Futures are all trading up around 0.4%.

ASX 200 chart

Crown (ASX: CWN) $11.54

CWN +16.57%: received another takeover bid today from its second-largest shareholder behind JP, namely Blackstone. This is now the third time Blackstone has approached CWN, the private equity firm now upping its offer to $12.50 cash, valuing the company at about $8.5 billion. It had bid $11.85 in March and $12.35 in May. This prices-in +25% premium to last close but remains conditional on a few things, including Blackstone doing due diligence on an exclusive basis and the global investment firm receiving final approval from its investment committee – and it also wants complete board support. We think a deal will get done here, but the market is rightly sceptical given the recent history of failed buyouts. This is obviously positive for the shares and also positive for the Hybrids (CWNHB) we hold in our income portfolio.

Crown Resorts

Sectors this week (Source: Bloomberg)

Stocks this week (Source: Bloomberg)

Broker moves

  • AACO Cut to Hold at Bell Potter; PT A$1.70

  • REP AU Rated New Positive at Evans & Partners Pty Ltd; PT A$1.10

  • Capitol Health Reinstated Buy at Ord Minnett

  • Evolution Cut to Neutral at JPMorgan; PT A$4.50

  • Altium Raised to Buy at Jefferies; PT A$48.83

Major movers today

Have a great weekend all

James, Harry and the Market Matters team.

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James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...

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