Pre-Open Data
Key Data for the Week
Key economic data released this week:
- Thursday – EUR – ECB Interest Rate Decision was unchanged, however, hinted more support may come in December.
- Thursday – US – Gross Domestic Product soared at an annualised rate of 33.1% in the September quarter, after a historical fall of 31.4% in the June quarter.
- Friday – EUR – Consumer Price Index
- Friday – EUR – Gross Domestic Product
Australian Market
The Australian sharemarket fell 1.6% yesterday, following the sell-off in global markets. All sectors ended lower, with Energy the weakest performer following a decline in oil prices; Oil Search and Santos slumped 5.1% and 5.0% respectively, while Woodside Petroleum slipped 2.2%.
ANZ led the big four banks lower, down 2.4%, after the company announced second half cash profit slumped 42% to $3.75 billion. Westpac and NAB fell 2.0% and 1.5% respectively, while Commonwealth Bank edged down 0.5%.
Mining heavyweights dragged the Materials sector lower; BHP and Rio Tinto lost 2.2% and 1.1% respectively, while Fortescue Metals bucked the trend to gain 0.9% after Q1 total iron ore shipped increased 5% year on year and said it is on track to meet FY guidance.
JB Hi-Fi fell 6.2% despite the company’s announcement 1Q21 sales growth in its Australian stores rose 27%. Other retailers Harvey Norman, Super Retail Group and Kathmandu lost between 1.7% and 3.3%.
The Australian futures market points to a 0.6% rise today.
Overseas Markets
European sharemarkets closed lower on Thursday. French Industrials weakened; Veolia and Eiffage lost 1.9% and 1.7% respectively, while Vinci fell 0.9%. Vestas Wind Systems outperformed, up 7.6%, after the announcement it is set to acquire Mitsubishi Heavy Industries Offshore Wind in a trade worth ~€709 million.
US sharemarkets rebounded from Wednesday’s decline to close higher overnight. All sectors saw gains except for Health Care. The Energy sector was the best performer, while Information Technology and Communication Services also outperformed; Alphabet, Amazon and Apple all rose between 1.5% and 3.7% before the companies announced quarterly results after hours. Facebook gained 4.9% after revenue was above consensus, while Spotify slipped 3.4% after the company announced revenue missed expectations.
By the close of trade, the Dow Jones added 0.5%, the S&P 500 rose 1.2% and the NASDAQ gained 1.6%.
CNIS Perspective
It has now been confirmed that the US$34 billion Initial Public Offering (IPO) of Ant Group, the Chinese digital payment and e-commerce platform, will be the largest offering ever conducted in the history of capital markets. The largest IPO prior to this was Saudi Aramco, the Saudi Arabian oil company, which raised US$29.4 billion in 2019.
Ant’s massive raising will be split evenly between Shanghai and Hong Kong stock exchanges and will ensure Shanghai tops the global bourses in terms of capital raised in 2020. The estimated US$52 billion raised in Shanghai this year is up 200% from 2019 and is significantly above the estimated US$38 billion raised on the NASDAQ in 2020.
This increase has been stoked by China’s drive to ensure their strategically important technology companies are listed domestically. It has also coincided with efforts by the US to cut Chinese companies out of global supply chains, as tensions between Beijing and Washington increased during the COVID-19 pandemic.
It is possible that proposed legislation in the US which would allow US regulators to review audit reports in China, might lead some US listed Chinese companies to abandon their Wall Street listings for booming domestic Shanghai/Hong Kong bourses.
Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.
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