4 OCT 21 – Monday Market Highlights – Transcript

SUMMARY KEYWORDS

prices, friday, energy, ipos, domestically, market, debt ceiling, aussie, week, towers, crisis, telstra, ebitda, international borders, whitehaven, australian, telecommunication company, announced, non farm payrolls, october

SPEAKERS

Roland Houghton

Roland Houghton 

Good morning. It’s Monday, the fourth of October and I’m rolling from Milford. domestically. The key news was the shock resignation of New South Wales premier on Friday. Gladys resign given the icac officially launched an investigation into whether she engaged in conduct that breach public trust. This is specifically relating to funding reservations made to the Australian clay target Association in 2017 corelogic released Australian housing price data and home values continue to charge higher across Australia that increased 1.5% month on month taking annual growth to 20.3%, which is the fastest pace of annual growth since 1989. The Aussie government also announced the intention to reopen the international borders in November, individuals be able to travel once their state’s vaccination rate hits 80% Global Energy shortages are continuing to worsen, with some now referring to it as a global energy crisis drawing parallels to the 1973 oil crisis. This is of course very different to 1973 in a number of ways, however, the outcome of surging energy prices is the same thermal coal prices for example have reached us $218 per metric ton up 27% in the past month and up 270% in the past year. Natural Gas prices are also up significantly up 19% last month alone. This is flowing through to energy prices, particularly in Europe, where de hid prices have tripled from 50 euros per megawatt hour to 150 euros an all time high. Now there are a huge many factors that have stoked this crisis. However, given Europe is going into the cold winter months, it’s unlikely to improve anytime soon. Now turning to equity news, this energy issue is proving to be an opportunity for certain companies, Whitehaven coal, for example, rally 28% in September yancoal. Australia was also up 25% in September and was up 12%. On Friday alone. Optus the telecommunication company announced the sale of a 70% stake in their towers to all super the transaction value their assets at $2.3 billion on 38 times last year’s EBITDA. However, they will be building another 565 towers which will reduce the multiple to 28 times which is bang in line with what Telstra achieved earlier in the year. Globally, equity markets took a bit of a wobble last week, with most claiming rising bond yields in the US was the key culprit. Turning to the week ahead, the market will be focused on negotiations in the US around the need to raise the debt ceiling. Janet Yellen the treasurer has estimated that the US government will run out of funding by the 18th of October. As a reminder, the debt ceiling is a limit to how much the federal government is authorized to borrow. In addition, US non farm payrolls will be released on Friday and this will be very closely followed to see how the economic recovery is fearing. The market is expecting about 460,000 jobs to have been added in September. Domestically, fund managers and analysts will be busy working through the myriad of IPOs expected to hit the Aussie market over the next month with 24 new companies to start trading between now and mid November. Now that’s just the list of confirmed IPOs and there’ll be plenty more hopefuls in the pipeline. Thanks for listening. We’ll see you next week.