Month: May 2022

The Treasury Wine Estates Ltd (ASX: TWE) share price closed lower today following another tough day for many ASX shares.

At the closing bell, the winemaking and distribution giant’s shares were exchanging hands at $10.78 apiece, down 3.49%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) ended the day down 1.75% at 6,941 points.

Treasury Wine expands operations

The Treasury Wine share price couldn’t seem to catch a break today, despite a seemingly positive announcement from the company.

Treasury Wines has unveiled a new $165 million state-of-the-art facility in the Barossa region of South Australia.

This is considered to be the largest premium winemaking site in the southern hemisphere, with capacity to produce more than 100 million litres of wine annually.

Treasury Wine further noted that its bottling operations in the Barossa are the biggest across its sites globally.

Up to 216 million bottles are packaged per year, operating four bottle lines, and exported to more than 70 countries. The site employs around 400 permanent team members and extends up to 600 during peak vintage periods.

Treasury Wine stated that the new facility provides it with the ability to increase premium winemaking capacity by 33%.

In addition, it also expands the company’s storage capacity.

What did management say?

Treasury Wines chief supply officer Kerrin Petty commented on what the new facility brings to the market. He said:

It’s a proud moment to unveil our new Barossa wine production facility, which has been two and a half years in the making through the challenges of the pandemic.

…The new site is purpose-built for premium winemaking with the flexibility to scale up or down production depending on demand, which is crucial given the ebbs and flows of wine production.

Sustainability has been front of mind throughout the entire project with the new infrastructure allowing us to manage the impacts of climate change on vintages and ensuring we can protect our most valuable grapes and produce the highest quality wine even in challenging years.

The new winemaking site also includes a 4,500m² Icon Cellar Building which represents global best practice for luxury winemaking and provides visitors with the VIP treatment to experience and tour the winemaking process.

What do the brokers think?

A number of brokers rated the Treasury Wine share price with similar price points following the company’s half-year results.

The team at Morgans cut its rating by 0.9% to $13.93, but believes there is still strong growth to come for Treasury Wine. This is due to the strong portfolio of “much loved iconic wine brands” and management’s recent restructuring.

Based on today’s price, Morgans’ 12-month price target implies a potential upside of around 29% for investors.

On the other hand, Citi also weighed in on Treasury Wine shares, cutting its rating by 0.1% to $13.78.

The broker thinks the company’s shares are currently trading at attractive levels. This is given the fact industry rival Pernod Ricard released a strong third-quarter update recently.

The French winemaker revealed its United States sales have accelerated, which could bode well for Treasury Wine’s North American business.

Treasury Wine share price review

Over the past 12 months, the Treasury Wine share price has been on a rollercoaster ride, posting an 8.5% gain.

However, when glancing at year to date, its shares are down almost 13%.

On valuation grounds, Treasury Wine presides a market capitalisation of approximately $8.06 billion.

The post Can a new $165m ‘state-of-the-art facility’ help restore the Treasury Wine share price? appeared first on The Motley Fool Australia.

More reading

• Broker tips the Treasury Wine share price to pop 23% higher
• Broker names 2 of the ‘best’ blue chip ASX 200 shares to buy now
• Broker names the best ASX shares to buy right now
• The Treasury Wine share price has tumbled 9% in 2022, so is the dividend yield worth its weight?
• Can the Treasury Wine share price recover from its post-China hangover?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/9mJjoOA

The Novonix Ltd (ASX: NVX) share price is sliding today and is currently down 9.05% at $3.62.

Despite no market-sensitive updates, investors are selling off Novonix shares today on a volume of 3.5 million shares at the time of writing, well ahead of the four-week average.

What’s happening with Novonix?

It’s not abundantly clear what is driving down the Novonix share price. However, in wider market moves, the S&P/ASX All Technology Index (ASX: XTX) is also down 6.23% today as tech shares take a beating.

This brings the index’s loss to 19% for the month, and 34% for the year to date. A wave of macroeconomic pressures appears to be weighing in, most notably inflation, interest rates, and tension in Europe.

As reported by the Motley Fool earlier this week, tech shares have continued to slide on a global scale, as these pressures continue to tighten the rope further.

The continued downturn in the American markets follows the US Federal Reserve’s decision to raise interest rates.

Despite this, Novonix has made inroads in successfully uplisting to the NASDAQ, and made other operational progress, as covered by my colleague Tristan.

As such, analysts at Morgans have retained a hold rating on the stock, holding the view that not much has changed fundamentally for the company in spite of it taking a hit to its earnings from the listing.

Novonix share price snapshot

In the last 12 months, the Novonix share price has held onto a 77% gain after a bumper year in 2021. This year to date however, losses have been extensive and the stock is down more than 60%.

It is also down 22% over the past month.

The post Why is the Novonix share price down 9% today? appeared first on The Motley Fool Australia.

More reading

• The Novonix share price just rebounded 13%. Is it a buy?
• Technophobia? Why ASX 200 tech shares are getting hammered again
• Why is the Novonix share price down 6% on Friday?
• Novonix share price powers up on strong quarterly revenue growth
• Here’s why ASX 200 tech shares are having such a stellar end to the week

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/gd4Y8fC

Australia’s first Ethereum (CRYPTO: ETH) and Bitcoin (CRYPTO: BTC) exchange-traded funds launched this morning.

In fact, after waiting patiently for what seems like years, today saw the launch of not one but three crypto ETFs. One offers direct exposure to Ethereum’s spot price while the other two are meant to mirror the Bitcoin price.

The Ethereum ETF goes by the name ETFS 21Shares Ethereum ETF (CXA: EETH). While the two Bitcoin funds are Cosmos-Purpose Bitcoin Access ETF (CXA: CBTC) and ETFS 21Shares Bitcoin ETF (CXA: EBTC).

Unlike prior crypto ETFs available Down Under, all three invest in the tokens themselves, intending to closely mirror the spot price.

Just take note that you won’t find any of them trading on the ASX. Instead, you’ll find them listed on the Cboe Australia exchange.

How are the Ethereum and Bitcoin ETFs tracking on day one?

Despite a big pullback in crypto prices – Ethereum is down 36% over the past week and Bitcoin has fallen 31% – there’s still a healthy appetite for the new crypto ETFs.

As at 3pm AEST, the Cosmos-Purpose Bitcoin Access ETF has seen $493,000 worth of trades. The ETFS 21Shares Bitcoin ETF has seen almost twice that value transacted, with $936,000 of trades.

Crypto investors are also clearly looking for ETF exposure to Ethereum as well, with $568,000 worth of trades in the ETFS 21Shares Ethereum ETF.

Two week delay brings fee waiver

If you expected to be able to invest in Cosmos’ new ETF two weeks ago, you’re not alone.

But the launch of the crypto ETF faced regulatory delays, which has seen Cosmos CEO Dan Annan waive management fees for the first two months.

According to Annan (quoted by the Australian Financial Review), “Investors have been eagerly waiting for Australia’s first bitcoin ETF for a long time. As reward for all of our investors, for their patience, or impatience, we are waiving the fees for the first two months.”

Two months without fees will certainly come as welcome news to crypto investors.

The post How are Australia’s Ethereum and Bitcoin ETFs faring on their first day? appeared first on The Motley Fool Australia.

More reading

• Bitcoin price plunges below US$30,000. What’s going on?
• Why Ethereum, Solana, and Cardano all plunged today
• Why should I buy Bitcoin ETF shares instead of just buying Bitcoin?
• The Ethereum price just got smashed. What’s going on?
• ‘Slow motion meltdown’: How low will the Bitcoin price sink?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/3EFDX8V

It’s been a rough day on the market for most S&P/ASX 200 Index (ASX: XJO) shares.

The index has been trading in the red on Thursday. It’s currently recording a fall of 1.63%.

But not all has been dire. Two ASX 200 shares managed to leap to long-forgotten heights today.

Let’s take a look at what helped these ASX 200 giants dodge Thursday’s carnage.

What drove these ASX 200 shares to multi-year highs?

Whitehaven Coal Ltd (ASX: WHC)

The share price of ASX 200 coal producer, Whitehaven Coal reached its highest point since 2019 on Thursday despite the company’s silence.

At its highest point of the day, the stock was trading at $5.11 — 2.6% higher than its previous close. Though, it has since sunk into the red.

While there’s been no news from the company, the commodity it deals in is having a good run.

Newcastle coal futures reached their highest point since March today. Of course, it was in March that the price of coal smashed its all-time high amid Russia’s invasion of Ukraine.

The Whitehaven share price has gained 78% since the start of 2022. It’s also 317% higher than it was this time last year.

Viva Energy Group Ltd (ASX: VEA)

Fellow ASX 200 energy share, Viva Energy also surged to a new multi-year high today. It reached $2.86 at its intraday high, representing a 7.1% gain and its highest point in two-and-a-half years.

Its surge came on the back of an update on the company’s refining and financial performance for the four months ended 30 April.

The company noted a “significant and sustained widening of the gap between the international price of refined products and our cost of crude oil”.

 Of course, that helped bolster its earnings over the period.

Viva Energy’s unaudited earnings before interest, tax, depreciation, and amortisation (EBITDA) for the period came to about $308 million – a 65% increase on the same period last year.

Additionally, it achieved an actual Geelong Refining Margin of US$26.4 a barrel in April. That was up from US$11.5 a barrel in March and an average of US$8.3 a barrel over the March quarter.

The Viva share price is currently nearly 15% higher than it was at the start of the year. It’s also 28% higher than it was this time last year.

The post 2 ASX 200 shares clocking multi-year highs on Thursday appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why are these ASX coal shares having a top run today?
• Blockdown! Why is the Block share price crashing by 16% today?
• ASX 200 midday update: CBA’s Q3 update impresses, Xero and Block crash
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/2EwC34A

It’s another day, another fall so far this Thursday for the S&P/ASX 200 Index (ASX: XJO). At the time of writing, the ASX 200 is down by another 1.67% to back well under 7,000 points.

But instead of dwelling on that sobering metric, let’s instead take a look at the shares currently topping the ASX 200’s share volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Thursday

Whitehaven Coal Ltd (ASX: WHC)

ASX 200 coal miner Whitehaven is our first share to check out this Thursday. So far today, a sizeable 13.13 million Whitehaven shares have found a new home. There hasn’t been any major news out of the company today, save for a routine share buyback notice. However, this company has endured some significant volatility.

Initially, Whitehaven shares rose strongly this morning, going as high as $5.11 a share. However, investors seem to have gotten cold feet and have subsequently re-valued the company at $4.91 a share at the time of writing, down 1.41%. It’s this bouncing around that has probably led to so many Whitehaven shares trading today.

Telstra Corporation Ltd (ASX: TLS)

Telstra is our next ASX 200 share to take a glance at today. This telco has had a notable 16.23 million shares trade on the markets thus far. Again, we don’t have too much out of Telstra itself today to go off, save for some share buyback notices. This could be contributing to volumes itself. But it’s probably Telstra’s not-insignificant fall that is behind most of this trading. Telstra is currently down by 1.15% at $3.86 a share. That puts the company’s 2022 performance thus far at a depressing loss of 8.4%.

Pilbara Minerals Ltd (ASX: PLS)

From TLS to PLS! Pilbara Minerals is our final and most traded share of the day this Thursday. This ASX 200 lithium stock has had 18.66 million of its shares trade hands as it currently stands. We haven’t had any news out of Pilbara today, indeed all month. So we have to assume that this volume is the result of the nasty selloff Pilbara has suffered through. The company is currently down another painful 5.73% at $2.47 a share. That puts Pilbara’s losses over the past month at a whopping 16.5%.

The post Here are the 3 most heavily traded ASX 200 shares on Thursday appeared first on The Motley Fool Australia.

More reading

• Why are these ASX coal shares having a top run today?
• If you’d bought $10,000 of Pilbara Minerals shares 10 years ago, congratulations! Here’s what you’d have now
• Blockdown! Why is the Block share price crashing by 16% today?
• ASX 200 midday update: CBA’s Q3 update impresses, Xero and Block crash
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/Tf40b9C

The AGL Energy Limited (ASX: AGL) share price is in the green on Thursday. That’s despite environmental group Greenpeace rebutting claims made by the company’s management.

Greenpeace Australia Pacific’s Glenn Walker slammed the company’s refusal to exit coal by 2030, saying AGL has “the memory of a goldfish and the agility of an elephant at a time which calls for the opposite”.

At the time of writing, the AGL share price is $8.30, 1.34% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 1.63%.

Let’s take a closer look at the latest push back to the company’s split.

AGL slammed for refusing to ditch coal this decade

The AGL share price is recovering from its previous four-session tumble on Thursday.

Meanwhile, Greenpeace has gone head-to-head with the company after it reportedly claimed ditching coal by 2030 is an “engineering impossibility”.

AGL’s management said that, to exit coal-fired power generation by the end of the decade, it would need to build twice as many wind farms over the next five years as it did over the prior five years, reports The Australian.

It also reportedly claimed transitioning to renewables by 2030 would require $30 billion and an area twice the size of the ACT.

“Time and time again, they have been caught with their pants down by the rapidly accelerating energy transition,” Walker rebutted.

AGL plans to shutter its Bayswater coal-fired power plant by 2033 and its Loy Yang A plant by 2045.

The AGL share price tumbled 3% amid the company’s decision to bring those dates forward by two and three years respectively in February.

But many environmental advocates believe that’s not soon enough. Walker continued:

AGL CEO Graeme Hunt claims that renewables cannot be built twice as fast as the past five years but that is exactly what the vast majority of his peers in the energy sector believe will happen …

This outdated adherence to coal is the same disastrous mistake repeated yet again, at the expense of shareholders, customers, the climate, and all Australians.

Walker also labelled the company’s planned split “dodgy” and “the latest in a long line of terrible decision making”.

The demerger would see AGL’s energy generation assets run by Accel Energy. Meanwhile, its retail business would be operated by AGL Australia.

Walker has previously dubbed the split “a turd rolled in glitter“.

AGL share price snapshot

Today’s gains included, the AGL share price is almost 32% higher than it was at the start of 2022.

Though, it has fallen 4.6% since this time last year.

The post AGL share price lifts despite Greenpeace accusing leadership of being ‘caught with their pants down’ appeared first on The Motley Fool Australia.

More reading

• Is Cannon-Brookes getting ready to pitch a third takeover bid for AGL shares?
• Own AGL shares? Expert warns Cannon-Brookes’ stake might not be all it seems
• Cannon-Brookes warns AGL dividends at risk from demerger
• AGL share price makes partial recovery as expert declares demerger favourable
• AGL share price follows market lower despite demerger milestone

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/RxVBsbc

The S&P/ASX 200 Index (ASX: XJO) is back heading south again on Thursday afternoon. At the time of writing, the benchmark index is down 1.5% to 6,961 points.

Four ASX shares that are falling more than most are listed below. Here’s why they are dropping:

Block Inc (ASX: SQ2)

The Block share price is down a massive 17% to $101.08. This follows a similarly sharp decline for the payments giant’s NYSE listed shares on Wall Street overnight. Block appears to have been caught up in a tech selloff in the United States amid concerns over sky high inflation.

IDP Education Ltd (ASX: IEL)

The IDP share price is down over 9% to $22.69. Investors have been selling this language testing and student placement company’s shares after it announced the resignation of its long-serving CEO, Andrew Barkla. He will be stepping down from the role in September after more than seven years at the helm. A global search for a replacement will now get underway.

Monash IVF Group Ltd (ASX: MVF)

The Monash IVF share price is down 5.5% to $1.10. This follows the release of a trading update out of the fertility treatment company. That update revealed that the current environment has negatively impacted stimulated cycle activity and profitability between January to April as patients defer treatment. As a result, Monash IVF’s adjusted net profit after tax is expected to be $22 million in FY 2022. This will be down from $23.3 million in FY 2021.

Xero Limited (ASX: XRO)

The Xero share price is down 12% to $76.53. Investors have been selling the cloud accounting platform provider’s shares amid weakness in the tech sector and the release of its full-year results. In respect to the latter, Xero reported a 29% increase in revenue to NZ$1.1 billion and an 11% lift in earnings before interest, tax, depreciation and amortisation (EBITDA) to NZ$212.7 million. However, this fell short of Goldman Sachs’ estimates, as did its subscriber growth.

The post Why Block, IDP Education, Monash IVF, and Xero shares are dropping appeared first on The Motley Fool Australia.

More reading

• Blockdown! Why is the Block share price crashing by 16% today?
• Thursday thrashing: ASX tech shares tumble
• ASX 200 midday update: CBA’s Q3 update impresses, Xero and Block crash
• Zip share price tumbles 5% to another multi-year low
• How much further can ASX 200 tech shares tumble? Macquarie weighs in

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc., Idp Education Pty Ltd, and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc. and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/nH57F3X

When it comes to founder-led companies, many ASX investors like to keep a close tab on whether that founder has been buying or selling shares in their own company. If a founder is indeed buying up shares, it can be a strong signal that it might be a good time to follow suit. Conversely, many investors don’t like to see their founder selling shares, as it can be perceived as a vote of no confidence. Luckily for ASX investors of WAM Capital Limited (ASX: WAM) shares, its founder has been going down the former path of late.

WAM Capital is one of the largest and most popular listed investment companies (LICs) on the ASX. It was founded by the eponymous Geoff Wilson’s Wilson Asset Management (the WAM in WAM Capital) back in 1999. Since then, its portfolio has returned an average of 15.8% per annum (before fees).

WAM Capital’s ASX founder is buying shares

But eagle-eyed investors might have picked up on a recent trend. According to a series of ASX notices, Wilson has been buying WAM Capital shares, and quite enthusiastically too. According to WAM’s ASX releases, Wilson (through subsidiaries) has bought six parcels of WAM Capital shares over May thus far (which works out to be one buy every two days on average).

These were all buys ranging from between $20,000 and $69,000.

It comes after Wilson did a similar rate of selling shares over March. The difference is that Wilson was selling WAM Capital shares when they were being priced at around $2.25. Most of the more-recent buys were instead revolving around the $2.05 mark. That’s your classic ‘buy low, sell high’ play. Wilson might continue his buying spree going forward too. At the current time, WAM Capital shares are worth $2.02.

WAM only releases the net tangible asset (NTA) value of its shares once every month. The last disclosed NTA of WAM Captial shares was $1.73 per share. But that was as of 31 March. Given the volatility we’ve seen on the ASX over April and now into May, this value has probably fluctuated quite a bit.

So Geoff Wilson clearly thinks his own WAM Capital is a buy right now. He’s certainly been buying at any rate. No doubt WAM Capital’s ASX investors will appreciate this show of confidence.

The post WAM Capital’s ASX founder has been buying shares. Here’s what we know appeared first on The Motley Fool Australia.

More reading

• 13%? Why some ASX LICs have such high dividend yields
• 2 ASX shares rated ‘buy’ by this top fund manager

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/FWVKifd

Since Fortescue Future Industries entered the fray as a subsidiary of Fortescue Metals Group Limited (ASX: FMG), there have been plenty of discussions about how it will bring its green hydrogen vision to reality.

From the outset, the green energy company’s goal of producing 15 million tonnes per year of green hydrogen by 2030 has been met with some scepticism. Given the current uneconomical structure for producing green hydrogen, these beliefs aren’t without some reason.

Last week, the Smart Energy Expo in Sydney provided some additional context to the hydrogen challenge. So, are the Fortescue Future Industries (FFI) aspirations really possible?

What does Fortescue Future Industries need to do?

Scaling a nascent ‘fuel’ is not something that can be done overnight. By the International Energy Agency’s (IEA) estimates, less than 0.1% of global hydrogen production is via water electrolysis. As such, going from zero to one will be a challenge for FFI — but, how much of a challenge?

Well, according to FFI New South Wales manager, Joshua Moran, there’s a lot of work to be done. For production to reach the target of 15 million tonnes per annum, Fortescue Future Industries will need 450 gigawatts of renewable electricity generation.

The above number may not have much meaning when listed by itself, but here’s the kicker. The International Renewable Energy Agency estimates that only 225 gigawatts of renewable energy were installed across the entire world last year.

Furthermore, Moran shared that 150 gigawatts worth of electrolysers will also be needed to make the operation a reality. Remarkably, this would be equivalent to roughly half of the entire electrolyser capacity in the world by 2030, according to Jefferies.

While this all seems pessimistic, it is important to keep in mind the potential for exponential ramping. Currently, the global rate of production of electrolyser capacity is 1 gigawatt to 2 gigawatts per year. There is a chance this rate could exponentially grow as renewables become cheaper.

According to IEA, the cost of green hydrogen production could fall by 30% by 2030. This is on the basis of realised economies of scale.

Progress so far

Already this year, Fortescue Future Industries have been busy pushing the needle forward on its new clean dream. A milestone moment for the company occurred with the commencement of construction of its first electrolyser facility in Gladstone, Queensland.

In March, FFI announced a partnership with Airbus to collaborate on developing green hydrogen for use in the aviation industry.

Meanwhile, the company has also earmarked Papua New Guinea and Argentina as potential locations for future green hydrogen projects.

However, Fortescue Future Industries is yet to produce any green hydrogen to date. FFI’s parent company, ASX-listed Fortescue Metals Group, is trading 21% below where it was a year ago.

The post Is the Fortescue Future Industries hydrogen dream more fantasy than feasible? appeared first on The Motley Fool Australia.

More reading

• Why is the Fortescue share price rebounding today?
• Why are ASX 200 mining shares in the green today?
• Why are ASX 200 mining share prices slipping today?
• Fortescue share price dives another 3%, down 12% in a week
• Could Fortescue Future Industries’ green hydrogen help Europe ditch Russian energy?

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/gxPkuGX

The National Australia Bank Ltd (ASX: NAB) share price is moving higher today amid news the big four ASX bank wants to buy the banking segment of Suncorp Group Ltd (ASX: SUN).

At the time of writing, NAB shares are trading up 0.69% at $30.74 apiece.

NAB is one of the largest banks alongside Australia and New Zealand Banking Group Ltd (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), and Westpac Banking Corp (ASX: WBC). Both ANZ and Westpac are in the red today, while CBA is 0.58% higher.

NAB seems interested in making bolt-on acquisitions to increase the size of its consumer division. It recently bought the Australian consumer division of Citigroup. The purchase price is the net assets of the business, plus a premium of $250 million. At the time of the announcement, the required equity was approximately $1.2 billion.

NAB’s interest in Suncorp Bank

According to reporting by the Australian Financial Review, if Suncorp decides to put up its banking division for sale then NAB would be interested in trying to buy it.

The newspaper reported that NAB’s leadership has “informally” told Suncorp’s management about the interest.

The approach was reportedly so that Suncorp’s board would know there was a large potential bidder that would be serious if a sale process were to proceed.

It’s possible that a potentially enlarged NAB is a reason that investors are sending the NAB share price higher.

How much would this add to the big four bank?

In its quarterly update for the three months to 31 March 2022, Suncorp reported that its total housing loans were $48 billion (up 1.7% over the quarter). It also had $11.3 billion of business loans, up 0.8% for the quarter.

The Suncorp Bank impairment expense was $1 million for the quarter. Suncorp Bank CEO Clive van Horen said its lending portfolio continued to be “high-quality and conservatively positioned”.

It was also noted that turnaround times were “consistently competitive” over that quarter, reflecting “continued delivery of a targeted program of work to improve customer and broker experiences”.

Wouldn’t other banks be interested?

It’s possible that banks other than just NAB would be interested in acquiring the Suncorp Bank business.

The AFR suggested that each of the big four ASX banks of NAB, CBA, Westpac, and ANZ would be interested. However, for varying reasons, NAB may be the best-placed candidate.

The newspaper noted that CBA may be too large to buy the business due to competition reasons. Therefore, CBA could attract the attention of the Australian Competition and Consumer Commission (ACCC). Westpac’s “painful” restructuring could mean it isn’t in a position to make an acquisition. The AFR said that ANZ is “in the doldrums”.

However, the newspaper did point out that Macquarie Group Ltd (ASX: MQG) could be a bit of a wildcard – the Macquarie banking division is looking to grow its mortgage book.

What would happen to Suncorp?

For starters, the company would have a few billion dollars to decide to return to shareholders and/or invest into its remaining business.

The company would then still have its insurance operations with multiple brands including AAMI, Bingle, Apia, Terri Scheer, Vero, and Asteron Life.

NAB share price snapshot

The NAB share price is up almost 7% this year to date and 16% over the past 12 months. However, it is down 6.5% over the past month and 5% over the past week.

The post NAB share price lifts amid Suncorp rumours appeared first on The Motley Fool Australia.

More reading

• Why GrainCorp, Link, NAB, and Pendal shares are sinking today
• The NAB share price is in reverse today. Here’s why
• What’s the outlook for ASX 200 bank shares amid rising interest rates?
• Looking to secure the latest NAB dividend. Here’s what you need to do
• Suncorp share price outperforms as home lending portfolio grows $800m

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/6BF7zUc