Category: Stock Market

The Westpac Banking Corp (ASX: WBC) share price has not been a star performer on the S&P/ASX 200 Index (ASX: XJO) of late. This big four ASX bank has lost more than 8% over 2022 thus far, as well as more than 21% over the past 12 months. That’s including the nasty 1.31% drop Westpac shares have copped so far today, which puts the bank at $19.90 a share.

But when it comes to ASX banks, share price growth is arguably only a secondary concern for many investors. When it comes to the banks, more often than not, it’s all about those dividends.

Westpac’s sluggish share price performance in recent months has done wonders for its dividend yield. Westpac now sits at a trailing dividend yield of 6.08%. As is typical with the ASX banks, these dividends also typically come fully franked, which means that 6.08% grosses up to an even more eye-catching 8.69% when we account for those franking credits.

But is that as good as it gets for Westpac shareholders?

Will Westpac shares be offering a dividend yield of 7.8% in FY2023?

Well, perhaps not. As my Fool colleague James covered yesterday, broker Citi has been keeping an eye on Westpac. This ASX broker reckons Westpac is a buy today, with a 12-month share price target of $29. That implies a potential upside of more than 45% from current pricing.

But it’s Citi’s predictions over Wetpac’s dividend where things get even more interesting. The bank’s interim dividend for FY2022 came in at a fully franked 61 cents per share.

But Citi is expecting Westpac’s final dividend for the financial year to be worth 62 cents. If that turns out to be the case, Westpac would have an FY2022 dividend yield of 6.18% based on current prices.

But Citi is also expecting Westpac to ramp up its dividends to $1.55 per share for the current 2023 financial year. If Westpac can pull that off, it would boost its forward dividend yield to a whopping 7.79% (or 11.13% grossed up) on current pricing.

This is by no means guaranteed, Westpac might not end up forking out $1.55 in dividends per share across FY2023.  But if it does, income investors might have some hefty paycheques coming their way over the next 12-18 months.

The post Will Westpac shares really offer a 7.8% dividend yield this year? appeared first on The Motley Fool Australia.

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More reading

• Surprise US inflation pumps the brakes on ASX 200 bank shares
• Analysts name 2 ASX 200 dividend shares to buy now
• Are falling BNPL shares pushing the ASX banks higher today?
• Are clouds gathering for the Westpac share price in FY23?
• Where’s the Westpac share price heading in July?

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 recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Core Lithium Ltd (ASX: CXO) share price is trading 3.43% in the green today.

At the time of writing, Core Lithium shares are swapping hands at 90.5 cents apiece, sharply reversing a downtrend started on 28 June.

In broad market moves, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) is pushing 2.34% higher today.

Core Lithium shares to rally again in FY23?

Core Lithium delivered outsized returns in the last financial year, helping the ASX lithium share surge 300% in the past 12 months.

The question is, can the company continue at this kind of pace, and what should investors keep an eye out for?

Lithium carbonate pricing continues to remain buoyant, trading at US$70,702 per tonne – in line with February 2022 highs.

It has held this range since 27 May after reversing out of a short-term downtrend, as seen below.

Demand continues to outweigh supply along the lithium supply chain. This could push the cost of batteries higher – or at least keep them relatively high – JP Morgan said in its 2022 annual energy paper in May.

This could bode well for the Core Lithium share price.

Moreover, Core Lithium is rated as a buy by 100% of the brokers covering the share, according to Refinitiv Eikon data.

The consensus price target from this list is $1 per share, suggesting a small amount of upside should the bull thesis be correct.

However, mining shares have traded down recently as investors begin to unwind the commodity trade, lithium being the exception.

If weakness from the broad sector were to transpose onto the company, this could be a downside risk.

As seen on the chart below, the Core Lithium share price has tracked the ASX 300 Metals and Mining Index with striking similarity in 2022.

The post What’s the outlook for the Core Lithium share price in FY23? appeared first on The Motley Fool Australia.

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• The best and worst ASX All Ords mining shares of FY22
• 3 ASX lithium shares that flew in FY22, and 1 that sank
• How did the Core Lithium share price gain 300% in the 2022 financial year?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why is the Core Lithium share price powering down 6% today?

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.

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Appen Ltd (ASX: APX) shares will be worth watching like a hawk next month when the artificial intelligence data services company releases its half-year results.

Particularly after its last results release in February, which disappointed the market and sent its shares crashing deep into the red.

What is Appen guiding to this time around?

Expectations are low for Appen’s half-year results next month. That’s because management is guiding to a weak first-half followed by a much stronger second-half to FY 2022.

In May, the company provided a trading update which stated the following:

The company expects 1H FY22 EBITDA to be materially lower than the prior corresponding period [FY21 H1 – US$27.7 million] due to lower than expected revenue and reflecting investment in our transformation office, product and technology and lower share based payments in the prior corresponding period. The company expects FY22 EBITDA to be significantly weighted to 2H reflecting the revenue skew and fixed cost operating leverage.

What is the market expecting?

According to a recent note out of Bell Potter, its analysts believe “materially lower” underlying EBITDA will mean US$17.3 million for the half. This represents a decline of 37.5% over the prior corresponding period.

This certainly puts Appen in a difficult position to deliver full-year operating earnings in excess of the US$78.9 million reported in FY 2021.

So much so, the market is now forecasting an earnings decline in FY 2022. Current consensus estimates are for EBITDA of US$72.7 million this year, which will mean a year on year decline of 7.9%. But even that may prove ambitious based on its poor start to the financial year.

Time will tell what happens. But with the Appen share price down 46% in 2022, shareholders will no doubt be hoping for a positive surprise to get its shares heading higher at long last.

The post Why the upcoming first-half result could be pivotal for Appen shares appeared first on The Motley Fool Australia.

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More reading

• Tech tumble: How this ASX share plunged 59% last financial year
• Why did the Appen share price sink 13% in June?
• What on earth happened to ASX 200 tech shares in June?
• Bargains or value traps? Expert rates 3 ASX shares that halved this year
• Why are ASX tech shares struggling today?

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 Appen Ltd. 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.

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What a month it has been for the Carnaby Resources Ltd (ASX: CNB) share price.

After rocketing 22% on 23 June and another 15% the following day on the back of significant discoveries, the Carnaby Resources share price is again on the move today.

This follows the company’s exploration update for the Greater Duchess Copper Gold Project in Mt Isa, Queensland.

At the time of writing, the Carnaby Resources share price is up 24.3% to a two-month high of $1.15. In earlier trading, the share price reached $1.18.

Carnaby uncovers another encouraging anomaly

In its statement, Carnaby advised exploration activities are ramping up with extensive induced polarisation (IP) surveys conducted at the Mount Hope and Duchess prospects.

Results from a further nine IP lines reveal a very large and extremely strong IP chargeability anomaly.

As such, a very strong chargeability inversion anomaly of 47 milliseconds was modelled at Mount Hope at approximately 150 metres below the surface.

Carnaby stated that plans are underway to complete first pass drilling of this IP anomaly immediately.

In addition, the miner found highly encouraging and undrilled IP anomalies at the Duchess prospect.

Management said the source of this IP anomaly is unknown but represents an excellent drill target in the upcoming programs.

Lastly, Carnaby received rock chip and sampling results from the Shamrock prospect. These have further enhanced the potential to host copper sulphide mineralisation.

Rock chip results included up to 17.7% copper and four grams per tonne (g/t) of gold.

Channel sample results include two metres at 7.2% copper, 0.5 g/t of gold.

Carnaby will complete heritage surveys at Shamrock first before commencing first pass drilling.

‘Cause for excitement’

Carnaby managing director, Rob Watkins commented:

The IP continues to delineate outstanding new drill targets at the Greater Duchess Copper Gold Project. This along with the ongoing drilling success continues to grow the scale and value of these discoveries. The inventory and quality of the drill ready targets about to be tested is cause for excitement.

Carnaby Resources share price snapshot

Including today’s euphoric gains, the Carnaby Resources share price has soared by 238% over the past 12 months.

The shares were trading for as little as 24 cents in November 2021 before a spectacular copper discovery at the Greater Duchess Project put the company into stardom.

Based on today’s share price, Carnaby Resources commands a market capitalisation of $133.71 million.

The post What is catapulting the Carnaby Resources share price 24% higher? appeared first on The Motley Fool Australia.

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• 2 tiny ASX mining shares surging on new discoveries

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 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.

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The Calix Ltd (ASX: CXL) share price is 2.2% higher at the time of writing to trade at $5.58.

The price boost for this small-cap ASX share comes as the Calix founder discusses his patented kiln, which is currently being trialled by some mining companies to create low-carbon or ‘green iron’.

What does Calix do?

Calix is an Aussie company that has developed a kiln capable of extracting substantial amounts of carbon dioxide from metals and minerals.

The company was founded in 2005 by its chief scientist Dr Mark Sceats and the late Connor Horley. Dr Sceats invented the kiln.

According to an article in the Australian Financial Review (AFR) today, Sceats hopes his kiln technology will be used across many industries to help the world decarbonise.

The kiln enables metals and minerals companies to decarbonise the stuff they dig out of the ground.

This includes being able to create low-carbon iron ore, which could then be turned into low-carbon steel. Game changer.

Mining companies trialling Calix technology

The kiln that Sceats invented has already proven itself in Europe’s cement industry. It can extract 95% of the carbon dioxide in cement.

According to the article, Sceats has spent the past year adapting his kiln technology for iron ore processing.

The article states: “Dr Sceats, 73, has spent the past year focused on developing a low-carbon, affordable method for removing the oxygen from iron ore in the hope that he can help Australia’s biggest export industry start selling “green iron” rather than iron ore.”

In an interview on the Tech Zero podcast, Sceats declined to say which mining companies were trying his kiln out in current green iron trials.

But the AFR points out that Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) have publicly said they want to sell more green iron to reduce their customers’ scope three emissions when they heat the iron ore to make steel.

‘Enormous’ opportunity

Sceats has also adapted the kiln technology for other industries, including lithium mining, agriculture, and water treatment. But he says the massive global iron ore and steel industries potentially present Calix’s biggest opportunity.

Sceats said: “It’s enormous. It’s got too many zeroes after it for me to make any sense of it at all.”

Dr Sceats’s kiln requires less expensive fuel for combustion and is able to use renewable energy to create heat. The kiln also provides better control over that heat to ensure maximum carbon dioxide extraction.

The kiln essentially heats minerals to their exact unique temperature at which gases escape. This escape makes the remaining mineral substance purer, while the extracted oxygen turns into harmless steam.

Australia could make its own steel

Sceats told Tech Zero that he could imagine an electric arc steel furnace in every major iron ore mining town in Australia by 2050.

Sceats said: “There is no impediment to Australia making steel, really. Shipping is going up, so the cost of transporting ores throughout the world is going up. Why not make the product here? The skills are here.”

What else is happening at Calix?

The most recent price-sensitive news from Calix came on 1 June when Pilbara Minerals Ltd (ASX: PLS) announced that key commercial terms had been agreed for a joint venture.

The JV involves the development of a demonstration plant and potential future commercialisation of Calix’s technology for lithium refining processes at Pilbara’s Pilgangoora Project.

The Federal Government awarded them a $20 million Modern Manufacturing Initiative Grant to help fund the project.

Pilbara Minerals Managing Director and CEO, Ken Brinsden, said their common goal was “to further decarbonise lithium raw material supply chains”.

Calix share price snapshot

The Calix share price has risen by more than 75% over the past 12 months.

In 2022, the share price is down 14.3%.

The post ‘Enormous opportunity’: Calix share price lifts as founder flaunts decarbonising technology appeared first on The Motley Fool Australia.

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More reading

• Could this be why the Lynas share price is rallying 6% today?
• These ASX 200 mining shares are bolstering the market today
• Aurizon share price sinks despite ‘transformative’ acquisition win
• Why Aurizon, Bega Cheese, Flight Centre, and Lake Resources shares are sinking
• TPG share price rises as telco hits back at Optus over ‘factual errors’

Motley Fool contributor Bronwyn Allen 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.

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The Lynas Rare Earths Ltd (ASX: LYC) share price is lifting on Thursday despite no news from the miner.

At the time of writing, the share is trading 5.74% higher at $8.11 apiece. Today’s trading volume is roughly 65% of the four-week average at 3.08 million shares.

Meanwhile, the price of the rare earth, neodymium is trading lower today at US$170,250 per tonne.

In broad market moves, the S&P/ASX 200 Materials index (ASX: XMJ) is strengthening today. It’s trading 2.2% in the green.

What’s up with the Lynas share price?

Despite no market-sensitive updates today, it’s noteworthy that the Sydney Energy Forum is on its final day.

The event brings together a raft of key stakeholders. These range from Prime Minister Anthony Albanese to industry specialists and company executives.

US Energy Department secretary, Jennifer Granholm, is among an extensive list of speakers that also includes Lynas CEO, Amanda Lacaze.

China’s domination in rare earths a risk

Rare earths was discussed at yesterday’s forum. International Energy Agency (IEA) executive director Dr Faith Birol was critical of China’s dominance in the global supply of rare earths, The Sydney Morning Herald reports.

Birol argued the country’s dominance could be a risk. She advocated for countries like Australia to speed up the development of the renewables supply chain.

Other speakers at the event echoed this sentiment on Wednesday. Various experts said the world needs to bump up its production of renewable energy and diversify the supply of key materials.

The opportunity for Lynas

Lynas is the only producer of rare earths at scale outside China. So, this kind of sentiment potentially bodes well for the Lynas share price.

It’s unlikely any speech at the event will impact the Lynas share price. However, it’s worth thinking about the content of the presentations given.

Combined with new government initiatives to support mineral exploration and discovery, it appears there’s a push to get resources out of the ground and into production.

The Lynas share price has held a 34% gain in the past 12 months despite a 26% loss in the year to date.

The post Could this be why the Lynas share price is rallying 6% today? appeared first on The Motley Fool Australia.

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More reading

• The Lynas share price soared 53% in the 2022 financial year. Here’s what happened
• Why did the Lynas Rare Earths share price tumble in June?
• Own Lynas shares? Here’s the latest challenge faced by the rare earths miner
• Mineral Monday: What you need to know about rare earths and which ASX shares are cashing in on them
• Guess which ASX 200 mining shares these experts are backing

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.

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Multiple ASX 200 mining shares are in the green today. BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) shares are rising 2.59% and 2.97% respectively.

Meanwhile, the Rio Tinto Limited (ASX: RIO) share price is jumping 2.47% and South32 Ltd (ASX: S32) shares are up 2.57%. For perspective, the  S&P/ASX 200 Index (ASX: XJO) is currently up 0.45%.

Let’s take a closer look at what’s happening with these mineral explorers today.

Why are these ASX 200 mining shares rising?

Iron ore prices may be impacting multiple ASX 200 mining shares today. Rio Tinto, BHP, and Fortescue are all major iron ore producers.

The iron ore price jumped in global markets on Wednesday. It leapt 0.93% to US$108.5 per tonne, Trading Economics data shows.

ANZ economist Madeline Dunk said iron ore futures were steady after trade data from China showed imports of iron ore were “better than expected”.

In a research note, she added: “China’s imports of the steel-making raw material were down only 0.5% y/y in June to 89mt.”

Silver and gold prices also jumped in global markets overnight, although they are pulling back now. South 32, Rio, and BHP all produce silver. Rio Tinto, BHP, and Fortescue all explore and produce gold.

As my Foolish colleague Bernd noted, US inflation has rocketed to 9.1%, according to the latest figures from America.

Gold can go up when inflation rises as it can be considered an inflation hedge. On the flip side, high rate rises can lead to a higher US dollar. The S&P/ASX All Ordinaries Gold Index (ASX: XGD) is jumping 1.86% today.

Meanwhile, looking at the bigger picture for ASX 200 mining shares, Japan Institute of Energy Economics chairman Tatsuya Terazawa has warned China is dominating global supply chains for rare earths used in batteries. He said in comments quoted by the Sydney Morning Herald:

Frankly, we’re not aware that we were so dependent on Chinese rare earths. The embargo almost paralysed entire industrial activities, and the prices of rare earths skyrocketed quickly.

Share price snapshot

The BHP share price has fallen nearly 17% in the past year, while Fortescue has descended nearly 31%. Rio Tinto shares have fallen nearly 25%, while South32 shares have risen 23%.

For perspective, the ASX 200 has lost nearly 10% in the past year.

The post These ASX 200 mining shares are bolstering the market today appeared first on The Motley Fool Australia.

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More reading

• Why experts have named these ASX 200 dividend shares to buy
• Why did the Rio Tinto and BHP share price struggle today?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Analyst names 3 reasons to be bullish on the BHP share price
• South32 share price backtracks amid sale of royalties

Motley Fool contributor Monica O’Shea 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.

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The Aurizon Holdings Ltd (ASX: AZJ) share price is in the red despite a big win for the company’s planned acquisition of One Rail.

The $2.35 billion purchase has been given the tick of approval from Australia’s competition watchdog.

At the time of writing, the Aurizon share price is $3.75, 2.09% lower than its previous close.

The company is currently its sector’s worst performer, helping drag the S&P/ASX 200 Industrials Index (ASX: XNJ) 0.1% lower.

Let’s take a closer look at today’s major news from the S&P/ASX 200 Index (ASX: XJO) rail freight operator.

Aurizon share price slips despite ACCC win

The market is bidding the Aurizon share price lower on Thursday despite the company’s multi-billion-dollar acquisition passing a notable hurdle.

The Australian Competition and Consumer Commission (ACCC) won’t oppose Aurizon’s purchase of One Rail if the ASX 200 company divests its east coast business.

One Rail operates the 2,200-kilometre Tarcoola-to-Darwin railway line. It also controls an east coast haulage business in New South Wales and Queensland.

“Without the divestment of One Rail’s east coast business, the ACCC considered that the proposed acquisition would reduce the number of main competitors in the supply of coal haulage in New South Wales and Queensland from three to two, likely resulting in higher prices or decreased service levels,” ACCC chair Gina Cass-Gottlieb said.

Aurizon now expects to finalise the acquisition by the end of this month. It will get started on the demerger immediately afterwards.

The company plans to integrate the remaining One Rail assets into its bulk business.

Aurizon managing director and CEO Andrew Harding commented on today’s news of the “transformative” acquisition, saying:

The transaction secures one of Australia’s most important infrastructure assets, connecting regions rich in resources and agricultural commodities with Darwin, the closest port to Asia.

In addition, the business includes bulk haulage operations, facilities, and a 400-strong workforce in South Australia and the Northern Territory to serve existing customers and growth opportunities in base metals, agriculture, iron ore and for new economy metals such as manganese and copper.

The Aurizon share price slumped 6% when Aurizon’s planned acquisition of the business was announced in October 2021.

Then, One Rail was described as a “strong, profitable business”. It had aggregate estimated earnings before interest, tax, depreciation, and amortisation (EBITDA) of $220 million for 2021.

Around $140 million of that was expected to come from the east coast rail business.

The post Aurizon share price sinks despite ‘transformative’ acquisition win appeared first on The Motley Fool Australia.

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More reading

• Why Aurizon, Bega Cheese, Flight Centre, and Lake Resources shares are sinking
• Here are the top 10 ASX shares today

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 recommended Aurizon Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is on course to record a decent gain despite weakness on Wall Street overnight. In afternoon trade, the benchmark index is up 0.45% to 6,652.2 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Aurizon Holdings Ltd (ASX: AZJ)

The Aurizon share price is down 2% to $3.75. This is despite the company revealing that the ACCC will not oppose the proposed acquisition of One Rail by Aurizon. However, the rail freight operator will have to divest One Rail’s east coast business to complete the deal.

Bega Cheese Ltd (ASX: BGA)

The Bega Cheese share price is down 7.5% to $3.28. This morning the food company released its FY 2023 guidance and revealed that it expects to report EBITDA of $160 million to $190 million. This will mean no growth and potentially even a decline year on year based on FY 2022’s guidance of $175 million to $190 million. A note out of Bell Potter today reveals that it was forecasting EBITDA of $195 million in FY 2023.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is down 3% to $16.53 despite there being no news out of the travel agent. However, it is worth noting that other travel shares are also falling on Thursday. Investors may be concerned that rising inflation could impact consumer spending on travel.

Lake Resources N.L. (ASX: LKE)

The Lake Resources share price is down 5% to 64 cents. This morning this lithium developer’s shares returned from a trading halt after responding to a scathing report from J Capital. Although management said that the report “puts forth incorrect information on technical matters and inaccurate assertions on Lake Resources’ progress to date,” it hasn’t stopped investors selling down its shares today.

The post Why Aurizon, Bega Cheese, Flight Centre, and Lake Resources shares are sinking appeared first on The Motley Fool Australia.

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More reading

• Here are 3 ASX 200 shares tumbling to new 52-week lows today
• ASX 200 midday update: Telstra completes acquisition, Lake Resources and Bega Cheese sink
• Own ASX travel shares? Here’s the outlook for FY23
• ‘Incorrect’ and ‘inaccurate’: Lake Resources delivers response to shares short-seller
• The best and worst ASX All Ords mining shares of FY22

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Aurizon Holdings Limited and Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a positive day so far this Thursday for the S&P/ASX 200 Index (ASX: XJO). The ASX 200 is up a pleasing 0.5% or so as it currently stands. But it’s been an even better day for the TPG Telecom Ltd (ASX: TPG) share price thus far.

TPG shares are rising robustly today. This ASX 200 telco is currently up 3.5% at $6.06 a share, well outperforming the broader market. So what’s going on with TPG that might be eliciting this share price reaction today?

Well, it could be the result of a statement TPG put out this morning. TPG and its telco peer Telstra Corporation Ltd (ASX: TLS) are currently involved in a tussle with rival Optus. Back in February, Telstra and TPG surprised investors by announcing a partnership.

This will see TPG gain access to roughly 3,700 of Telstra’s mobile network assets in regional and suburban areas, resulting in the company boosting its 4G coverage from 96% to 98.8% of the Australian population. In return, Telstra is expecting to bank an extra $1.6-$1.8 billion in revenues over the next decade.

TPG share price climbs as telco bites back

But TPG and Telstra rival Optus is not happy about this tie-up. Last month, the Singaporean telco put out a press release calling on the Australian Competition and Consumer Commission (ACCC) to reconsider the deal.

It stated that if the arrangement were to proceed, it would “lead to a loss of competition and material consumer and public detriment… [and] ‘locking’ competition out of the regional market and eliminating choice in regional Australia”.

Well, today, TPG has exercised its right of reply. According to reporting in The Australian, TPG has issued a rebuttal. It described Optus’ comments as “scaremongering” and stated they were based on “factual errors”.

Here is some of what TPG executive James Rickards went on to say:

Contrary to the assertions of Optus, this is not a merger… To suggest otherwise is an attempt to mislead the public, industry and key stakeholders in the hope of creating controversy where none exists.

This is an infrastructure sharing agreement in the interests of all Australians... Similarly, statements regarding the arrangements for pooling of spectrum in the shared network have seemingly been twisted intentionally.

So perhaps investors have been comforted by this defiant statement from TPG today. Whatever the reason, it’s certainly been a pleasing day for the telco.

At the current TPG share price, this ASX 200 telco has a market capitalisation of $10.97 billion, with a dividend yield of 2.83%.

The post TPG share price rises as telco hits back at Optus over ‘factual errors’ appeared first on The Motley Fool Australia.

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More reading

• Here are 3 ASX 200 shares tumbling to new 52-week lows today
• ASX 200 midday update: Telstra completes acquisition, Lake Resources and Bega Cheese sink
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

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 Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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