Shareholders enjoy handsome takeover bids Lex Hall | 24 May 2021Text size
Shareholders in several ASX companies have enjoyed handsome takeover bids, with this month’s bid for Crown Resorts the latest to be launched following a strong start to the year.
Asset managers say other takeover bids are likely, with private equity’s huge stores of cash and the low cost of borrowing making bids easier as companies seek growth by joining with others.
Private-equity firm Blackstone and casino operator Star Entertainment Group (ASX: SGR) have both bid for gaming group Crown Resorts (ASX: CWN). Morningstar analyst Angus Hewitt says another bid for narrow-moat Crown is likely after the company rejected Blackstone s revised bid of $12.35 cash per share. Morningstar’s fair value estimate remains unchanged at $12.14, compared to its current price around $12.90, up from around $10 before Blackstone’s first bid in March.
How stimulus buttressed housing optimism Lex Hall | 04 May 2021Text size
It’s perhaps tempting fate, but in the end, covid failed to cut a swathe through Australia’s residential construction sector. That’s largely because of a historic injection of government subsidies that propped up both construction companies and households.
The HomeBuilder program was originally slated as a $680 million measure, with Treasury estimating modest adoption. And yet, the program has been so popular its cost has been upgraded to $2.5 billion and counting.
In the wake of the scheme, Australian construction companies built more, while households used the money to renovate and restore, says Morningstar equity analyst Grant Slade in a new report on the outlook for Australian housing. The industry is in rude health, with leading indicators of new homebuilding activity at historic highs in early 2021.
CSR and Boral may have extra zip in building recovery
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While investors in the large ASX-listed building products companies generally had a fruitful last few months of 2020, the gains are likely to be harder to come by this year.
Share prices were on a solid upward trajectory late last year as a solid economic recovery occurred faster than most experts had predicted. The pull-forward of demand created by the federal government’s HomeBuilder scheme, which has been extended to March 31, has been a big driver.
Boral and CSR are the top picks at Citi among the ASX building stocks.
What the retail bounce means for 2021
Analysts say boosted spending ahead of Christmas is likely to continue into the new year.
Simon Letch
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Packed shopping malls and bumper consumer spending seem unbelievable in the context of the worst pandemic in 100 years. But boosted savings from working at home, government assistance and reduced travel have primed households to splurge at Christmas.
The question for investors is whether this boost for retail stocks will continue in 2021. The impact of this week’s COVID-19 outbreaks is just one of many risks, although some view these as a minor handbrake. Far from the consumer confidence nadir of April, the ANZ-Roy Morgan consumer confidence survey is now reporting stronger results than this time last year.