The Australian sharemarket keeps surging to fresh record highs despite ongoing east coast Covid-19 lockdowns and worrying case numbers.
The benchmark S&P/ASX200 index cracked 7600 points for the first time ever – climbing to 7615 before closing 0.29 per cent higher at 7584.3 – while the All Ordinaries Index added 0.31 per cent to 7854.6.
CommSec analyst Steve Daghlian said the local bourse had hit record intraday highs on seven of the past eight trading days despite the lockdowns, with Melbourne’s being extended until at least August 19 and NSW recording 344 new locally transmitted infections.
It is also the fifth record close in the past six trading days.
Banks and resources stocks kept the ASX in the green, following a positive lead from Wall Street overnight, with the biggest local corporate news being Commonwealth Bank booking a near 20 per cent rise in full-year cash net profit to $8.65bn.
It also declared a final dividend of $2 per share, bringing the full-year payout to shareholders to $3.50, up 17 per cent. In addition, CBA announced an off-market share buyback of up to $6bn.
“It will basically reduce the amount of shares on issue by an estimated 3.5 per cent,” Mr Daghlian noted.
Camera IconCBA shares have climbed to record highs, eclipsing $109 in intraday trade, but some analysts have given lower price targets, including JP Morgan’s $92. Sarah Marshall / NCA NewsWire Credit: News Corp Australia
CBA shares hit an all-time high of $109.03 in intraday trade before finishing 1.5 per cent firmer at $108.17.
OMG chief executive Ivan Tchourilov said the dividend and buyback amounted to about $10bn returned to equity holders.
“They’ll fund the spend with this year’s profits as well as cash held in contingency for Covid-19,” he said.
“The plan is not dissimilar to Suncorp’s laid out earlier in the week, albeit on a much larger scale.
“Commbanks’ payout will most likely be a one-off, as they’ve recently cut down a complex web of operations to adopt a more simplified model.”
ANZ lifted 1.2 per cent to $29.23, National Australia Bank rose 0.93 per cent to $27.22 and Westpac improved 0.74 per cent to $25.77.
“The price of oil bounced back from heavy losses on Monday, up about 3 per cent. That’s the reason why we’ve got Santos, Woodside, Oil Search and Beach doing well,” Mr Daghlian said.
Santos shares put on 1.43 per cent to $6.40, Woodside firmed 0.46 per cent to $21.91, Oil Search strengthened 1.29 per cent to $3.93 and Beach advanced 2.97 per cent to $1.21.
Camera IconThe all-important iron ore price keeps falling. Credit: Supplied
Rio Tinto appreciated 1.29 per cent to $129.14 and BHP gained 1.47 per cent to $52.52.
That came despite a 5.5 per cent slide in iron ore prices, Mr Daghlian said.
“Over the past couple of weeks, we’ve had a significant drop in the iron ore price. It has fallen about 20 per cent, partly because of proposed steel production cuts in China in coming months,” he said.
Insurer IAG posted a $427m full-year net loss, blaming significant one-off corporate expenses mainly relating to business interruption, customer refunds and payroll remediation.
“These are historical issues we’ve identified, provisioned for and are fixing – and we are making investments to continue to lift our risk management and operational capabilities,” chief executive Nick Hawkins said.
But the company still declared a final dividend of 13 cents per share, bringing the full-year dividend to 20 cents, up from 10 cents for the previous financial year.
“They’ve decided to push ahead with a dividend on the back of a strong guidance forecast for the year ahead,” Mr Tchourilov explained.
Camera IconDeserted roads have meant fewer car crash claims for insurers. Andrew Henshaw / NCA NewsWire Credit: News Corp Australia
“Its losses, including staff underpayment and refund issues, are a one-off and the company’s underlying performance is solid.
“Covid-induced lockdowns have led to significantly lower motor accident claim numbers, which has been of huge benefit to the industry, in contrast to the car crash of a time some of the other sectors are having.”
IAG shares retreated 2.65 per cent to $5.14.
Financial markets software company Iress got an improved takeover offer from EQT Fund Management, which has an implied value of $15.91 cash per share and has been backed by the target’s board.
“The revised offer, including a cash dividend, is now at a 45 per cent premium to the pre-offer price,” Mr Tchourilov said.
“Iress’ hard-to-get attitude looks to be paying off. Although the directors intend to recommend Iress shareholders vote in favour, EQT isn’t over the line just yet.
“But it’s hard to see why they would knock back the offer, and even harder to see where another offer might come from.”
Shares in Iress jumped 5.78 per cent to $15.19.
Camera IconWell-known olive oil brand Cobram Estate is now on the ASX. Credit: Supplied
Cobram Estate Olives made its ASX debut, dipping 1 cent from an opening price of $1.87.
Its full-year results released on Tuesday under the company’s previous name, Boundary Bend, revealed a $32.m net loss due to a low harvest, high water prices and losses in its US and Wellgrove olive-based health and wellness businesses.
But in an update on Wednesday, Cobram Estates stressed olive trees naturally bore fruit in biennial cycles, with a higher yielding crop one year typically followed by a lower yielding crop the next year, so the true cost of production and performance of the business should be judged on two-year rolling average results, it said.
The Aussie dollar was fetching 73.36 US cents, 53.03 British pence and 62.6 Euro cents in afternoon trade.Internet Explorer Channel Network