The S&P/ASX 200 has opened with a rise of 31 points to 6475 so far.
Traders are selling down AGL, which is down 6 per cent to $19.67 after announcing an all cash $3.3 billion bid for Vocus this morning. Vocus has just come on line and is up 11.7 per cent to $4.27.
And Star Entertainment is down 13.3 per cent to $3.93 after this morning's profit downgrade.
Non-bank lender Prospa, which will float on the ASX at midday today, has pledged to pass on lower funding costs to borrowers, as it expands into payments by setting up an Afterpay-style, buy-now, pay-later service for small businesses to buy stock and equipment. Prospa, which will count AustralianSuper as a substantial shareholder after raising $110 million in its second attempt at an initial public offering, is set to list with a market capitalisation of $610 million, based on its $3.78 offer price.
The deal is seen as an important bellwether for local venture capital fund exits and the fintech sector more broadly, which has struggled to birth another Afterpay-style success on the bourse. Prospa, which will trade under the ASX ticker code PGL, has been accessing funding more cheaply as it displays a longer track record; it is expecting its overall funding cost – calculated as the annual expense of its warehouse and debt borrowings divided by the amount extended to customers – to fall to 7.7 per cent in the 2019 financial year, down from 8.5 per cent in 2018, which itself was lower than the 13.1 per cent Prospa was paying in 2017.
Read the full story from the Financial Review's James Eyres here
Remember a trading spike in October 2012 when shares in more than eight blue-chip stocks - including ANZ Bank, Commonwealth Bank, Brambles, AGL, Bank of Queensland, Ansell and Aristocrat - saw massive spikes in their share prices in the seconds after they began trading at 10am yesterday.
Well seven years later, the corporate regulator has been dealt a significant legal defeat after the Federal Court threw out market manipulation allegations it had made against a trader working for National Australia Bank for the multibillion-dollar spike in trading on the ASX 200.
The Federal Court on Friday dismissed the Australian Securities and Investments Commission's case against financial services firm Whitebox Trading and its sole director at the time Johannes Boshoff. ASIC had alleged Mr Boshoff and Whitebox were behind trading that produced a mystery spike in the ASX-200 index in October 2012. Following an investigation, ASIC took Boshoff and Whitebox to court in 2016 alleging they had engaged in market manipulation.
ASIC also alleged Mr Boshoff breached his duties as a director by allowing the breaches by his company Whitebox. ASIC's case relied on evidence it said showed Mr Boshoff and Whitebox had on five occasions created orders placed during the ASX pre-open phase that did not intend to trade and cancelled shortly before the day's opening auction. This created artificial prices for those securities, ASIC alleged. But Justice David Yates found that ASIC's evidence did not support its claim.
Whitebox was a third-party trading contractor for NAB at the time of the alleged breaches. The market orders which led to the share price spike were placed on behalf of NAB by Whitebox which conducted NAB's index arbitrage trading.
Afterpay is in a trading halt today after announcing a capital raising and that it's founders, Anthony Eisen, Nicholas Molner, and David Hancock, are selling millions of shares to two US cornerstone investors, Tiger Management and Woodson Capital. Mr Eisen and Mr Molner are both selling 2.05 million shares, worth $49.5 million, but will retain 20.5 million share each. Mr Hancock is selling 400,000 shares, worth $9.6 million. All three will not see shares for at least 120 days from today.
Afterpay is also undertaking a full underwritten institutional placement of about 14 million new shares to raise $300 million. The new shares have a floor price of $21.75. A share purchase plan is also being offered to raise $30 million.
More to come
Telecommunications company Vocus will open its books exclusively to AGL Energy after the energy company lobbed a $3 billion takeover bid for the business. The $4.85 a share cash offer means the telco will enter into the due diligence process for the fourth time in two years, following three takeover bids that were subsequently withdrawn. Shares last traded at $3.83.
Vocus managing director and chief executive Kevin Russell said in a statement that AGL returned with a proposal to buy the business after Swedish private equity firm EQT ditched a $3.3 billion bid during due diligence. AGL and Vocus were previously unable to agree to due diligence terms. "There is a clear market opportunity for Vocus, which is generating significant interest in our business and our assets," Mr Russell said in a statement.
"We are focused on executing our turnaround strategy and delivering the opportunity in front of us.
"However, we have been clear that the Board will always act in the best interests of our shareholders to engage with credible parties that bring forward proposals that are worthy of further consideration."
The proposal is subject to a four-week period of exclusive due diligence and a unanimous recommendation from Vocus' board as well as regulatory, court and shareholder approvals should the takeover go ahead.
IG MARKETS SPONSORED POST
ASX futures up 21 points or 0.3% to 6502 near 7.15am AEST
AUD -0.6% to 69.61 US cents
On Wall St near 4pm: Dow +0.3% S&P 500 +0.5% Nasdaq +1.1%
In New York: BHP +0.4% Rio +1% Atlassian +1.2%
In Europe: Stoxx 50 +0.2% FTSE +0.6% CAC +0.3% DAX closed
Spot gold -1% to $US1327.76 an ounce at 2.53pm New York
Brent crude -1.6% to $US62.28 a barrel
US oil -1.3% to $US53.29 a barrel
Iron ore +0.9% to $US101.51 a tonne
Dalian iron ore +3% to 739 yuan
LME aluminium +0.6% to $US1775 a tonne
LME copper +1.3% to $US5874 a tonne
2-year yield: US 1.90% Australia 1.07%
5-year yield: US 1.91% Australia 1.13%
10-year yield: US 2.14% Australia 1.47% Germany -0/22%
10-year US/Australia yield gap near 6.20am AEST: 67 basis points
IG MARKETS SPONSORED POST
Another night of strong gains for markets has the ASX set up for a positive start to its week. A noteworthy shift in sentiment has occurred in financial markets. The short-term trend has reversed, and the tide, it seems, has turned, for now. After what was a long weekend for Australian financial markets, there is substantial and meaningful news flow to catch-up on for Aussie traders and investors.
First of all, the US-Mexico stand-off over trade and illegal migration was ostensibly resolved, avoiding the risk of higher trade-barriers between those two economies. Second of all, US Non-Farm Payrolls data missed expectations on Friday night, with markets now discounting greatly a high chance of monetary support from the US Fed in the near future.
The sell-off in government debt speaks loudest of the shift in market-sentiment. The yield on the benchmark 10 Year US Treasury note, for one, leapt 6.4 points, on the general shift in the long-term global growth outlook. After the 3-day weekend for the ASX, SPI Futures are suggesting that the ASX200 ought to add around 26 basis points at today's open. The data docket is looking relatively light for Australian markets today, with limited corporate and/or economic event risk. NAB Business Confidence data will be released, and will be watched for any sign of a post-election bounce in business sentiment in the Australian economy.
Good morning and welcome to today's Markets Live blog.
Your editor today is Lucy Battersby (lbattersby@theage.com.au).
This blog is not intended as financial advice.