The S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a solid gain. In afternoon trade, the benchmark index is up 0.5% to 7,346.6 points.

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

Harvey Norman Holdings Limited (ASX: HVN)

The Harvey Norman share price is down 3.5% to $4.90. The majority of this decline is attributable to the retail giant’s shares going ex-dividend this morning. Eligible shareholders can now look forward to being paid Harvey Norman’s fully franked 15 cents per share final dividend next month on 15 November.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price has fallen 3% to $4.92. Investors have been selling the insurance giant’s shares after it revealed that ASIC has launched civil proceedings against it in the Federal Court. The corporate regulator is alleging that the company misled customers by applying discounts while simultaneously upping premiums. It is alleged that NRMA customers missed out on more than $60 million worth of discounts.

Pendal Group Ltd (ASX: PDL)

The Pendal share price has tumbled almost 13% to $6.75 following the release of its funds under management (FUM) update for the September quarter. Although Pendal reported strong growth in its FUM, this was largely due to an acquisition. Excluding this, Pendal actually reported net fund outflows of $2.3 billion during the three months.

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price is down 5% to $11.67 after the release of a first quarter trading update at its annual general meeting. The wine giant revealed that its performance during the quarter was softer than it was expecting. Management advised: “As we exit the first quarter of fiscal 22, the recovery of key luxury channels impacted by the pandemic are slightly behind the expectations we had at the beginning of the year.”

The post Why Harvey Norman, IAG, Pendal, and Treasury Wine are dropping appeared first on The Motley Fool Australia.

More reading

• Here’s why the IAG (ASX: IAG) share price is down 3% on Friday
• ASX 200 (ASX:XJO) midday update: Rio Tinto cuts guidance, Treasury Wine disappoints
• Why the Treasury Wine (ASX:TWE) share price is tumbling 6% on Friday
• Why the Pendal (ASX:PDL) share price is sinking 9% today
• IAG (ASX:IAG) share price on watch as ASIC launches legal action

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 owns shares of and has recommended Harvey Norman Holdings Ltd., Insurance Australia Group Limited, and Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Tabcorp Holdings Limited (ASX: TAH) share price is crawling higher in afternoon trade today and is currently up 0.57% to $5.29.

As of today Tabcorp shares have reached a new 52-week high, after rallying 10% in the last month and being added to the S&P/ASX 50 Index (ASX: XFL) in September.

Gambling giant on a winning run

Tabcorp shares made a jump late last month. This coincided with the NSW Premier’s roadmap navigating the reopening of NSW’s economy, once the state hit an 80% double vaccination target.

The gambling services company saw its share price climb 8.5% in the week or so following the government’s announcement, as investors regained confidence in a more favourable consumer environment.

Tabcorp shares popped once more on 11 October, the same day NSW announced it was reinstating a suite of “freedoms” after hitting the required vaccine numbers.

And since, the Tabcorp share price has shown no signs of slowing.

As the easing of Covid-19 related restrictions begins to ramp up over the coming months, many investors are wondering, can Tabcorp shares sustain this momentum?

One leading broker has weighed in on the debate, and offered its opinion on the Tabcorp share price.

Can the Tabcorp share price continue charging higher?

Analysts and investment banking giant Macquarie Group Ltd (ASX: MQG) certainly think so, and see the winding back of restrictions as a big plus to the company’s future prospects.

The broker anticipates an improved gaming and wagering environment as more and more lockdown mandates ease.

It also reckons this improved environment is accretive to Tabcorp’s earnings, and could attract investors betting on a “reopening play”.

Consequently, it has upgraded its FY22 and FY23 earnings before interest, taxes, depreciation, and amortisation (EBITDA) forecasts by 3% and 4% respectively, baking these many growth levers into its modelling.

Aside from this, Macquarie also believes Tabcorp’s demerger from its lotteries business earlier this year will be a catalyst to drive valuations into the coming years.

This is compounded by the low EBITDA multiple the broker assigns on Tabcorp’s wagering segment.

As a result of its analysis, Macquarie expanded its price target by 1.6% to $6.55, implying a 23% upside potential from the current market price.

The Tabcorp share price has climbed 36% this year to date, and 56% over the past 12 months.

The post Why Macquarie tips the Tabcorp (ASX:TAH) share price to jump 22% appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Splitit Ltd (ASX: SPT) share price has been in the red all day today, sinking by as much as 8% in afternoon trade.

The plunge follows the company’s annual general meeting, where Splitit’s leaders outlined its future direction and reflected on a year in which COVID-19 amplified its business.

The company’s interim CEO, John Harper, noted that his view as an involved newcomer had led to a new action plan to increase the company’s value.

Despite positive overtones and forward planning from its leaders, the buy now, pay later (BNPL) company’s stock has failed to rally. At the time of writing, the Splitit share price is trading at 41.5 cents, 5.68% lower than its previous close.

Simultaneously, the broader market is gaining. The S&P/ASX 200 Index (ASX: XJO) and the All Ordinaries Index (ASX: XAO) are both around 0.5% higher right now.

Splitit’s next steps forward

According to today’s releases, Splitit’s annual general meeting was topped off by the company’s interim CEO’s address. Within his speech, Harper outlined several changes Splitit will be making soon, saying:

We are operating in a market that is moving and growing quickly. We need to bring a greater sense of urgency to capitalise on this opportunity from a sales perspective…

[Splitit has] a natural and untapped opportunity in the market, but we need to do a better job of effectively articulating [its] value.

To help grasp such opportunities, Harper will bring in a chief people officer and a product team. He said the new additions would foster collaboration within Splitit’s global segments and allow its technical engineers to remain connected to customers’ needs.

The company will also focus on the North American and United Kingdom markets. Harper said doing so would enable it to tap into more “higher-value merchants”.

It will also focus on improving its core product and attracting new merchants while reducing costs.

Splitit share price snapshot

The Splitit share price has had a challenging year so far, falling 68% since the start of 2021. Splitit shares are also trading 72% lower than this time last year.

The post The Splitit (ASX: SPT) share price slumped 8% today. Here’s why appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX BNPL shares in September
• Despite today’s falls, the Splitit share price is up 23% in 7 days. Here’s why
• Why the Splitit (ASX:SPT) share price is surging 10% today
• ASX tech shares are leading the market’s gains 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 Bruce Jackson.

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Yesterday I looked at three ASX shares brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why these brokers are bearish on them:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Macquarie, its analysts have retained their underperform rating and $5.40 price target on this infant formula company’s shares. The broker notes that smaller rival Bubs Australia Ltd (ASX: BUB) reported a strong rebound in sales in the first quarter. While this could be good news for A2 Milk, Macquarie appears to believe that investors should wait for an update from the company before getting too excited. It notes that an investor briefing is scheduled late this month. The A2 Milk share price is fetching $6.72 today.

Evolution Mining Ltd (ASX: EVN)

A note out of Goldman Sachs reveals that its analysts have retained their sell rating and cut their price target on this gold miner’s shares to $3.70. Goldman believes that Evolution’s shares are expensive in comparison to peers. In addition, the broker has been looking at commodities and has updated its price expectations. Goldman has reduced its average gold price estimate for 2021 to US$1,850 per ounce (from US1,890 per ounce). The Evolution share price is trading at $3.94 today.

Pact Group Holdings Ltd (ASX: PGH)

Analysts at Morgan Stanley have retained their underweight rating and $3.30 price target on this packaging company’s shares. This follows the release of a trading update that disappointed the market earlier this week. Though, it was largely in line with what the broker was expecting. One thing that did surprise Morgan Stanley was the company’s decision to cancel the sale of its Contract Manufacturing business. The broker was expecting the sale of the struggling business to be a positive catalyst. The Pact share price is now trading below this price target at $3.09.

The post Top brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• Could the A2 Milk (ASX:A2M) share price hit $8 by the end of 2021?
• These 3 ASX 200 shares are topping the volume charts this Thursday
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• Why is the A2 Milk (ASX:A2M) share price leaping again today?
• ASX 200 (ASX:XJO) midday update: HUB24 & Netwealth impress, A2 Milk surges again

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 A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Commonwealth Bank of Australia (ASX: CBA) share price is largely flat in afternoon trading, up 0.07% having earlier posted gains of 0.5%.

CommBank shares closed up on Monday and Tuesday this week and retraced on Wednesday and Thursday. All told, the CBA share price is down 1.95% since the closing bell last Friday, currently at $101.97 per share.

We take a look at what’s been putting the big bank in the news this week.

A potential legal headache failed to dampen CBA share price

On Monday, the CBA share price closed up 0.2%, despite the bank reporting that the Fair Work Ombudsman (FWO) had commenced civil proceedings against it and its stockbroking subsidiary, CommSec.

As the Motley Fool reported on the day: “The FWO alleges that Australia’s largest bank breached the Fair Work Act by not paying 7,425 of its employees their correct entitlements. Staff mainly in customer services roles were affected by the underpayment.”

CBA said it had self-reported the issue to the FWO and publicly disclosed this in 2019. With a remediation program launched in early 2018, the bank believes the situation is resolved without the need for additional compensation payments.

Highlights from the Annual General Meeting (AGM)

The CBA share price slipped on Wednesday when the bank held its AGM.

CommBank’s CEO, Matt Comyn, and Chairman, Catherine Livingstone, both presented at the AGM.

Livingstone highlighted the bank’s $6.2 billion in dividends paid out during FY 21. She also noted that CBA shareholders received another $6 billion from the bank’s off-market share buyback.

Pointing to the profit line, Livingstone said, “Cash net profit after tax was up 19.8 per cent on the prior year, reflecting an improvement in economic conditions, and the strong operating performance of our core banking businesses.”.

Looking at the year ahead, Comyn added, “The stimulus provided by our governments during lockdowns has been doing its job. Australians continue to accumulate more savings and many businesses are ready to take advantage of opportunities ahead.”.

Comyn also pointed to the rapid pace of technological development. “We’re seeing digital technology enable a raft of changes, which come with both opportunities and risks,” he said.

CBA share price snapshot

Year to date, the CBA share price is up about 22%, well outpacing the 10% gains posted by the S&P/ASX 200 Index (ASX: XJO) so far in 2021.

Over the past month, CBA shares edged out the ASX 200, gaining 0.54% compared to a loss of 1.03% on the index.

The post What’s happening with the CBA share price this week? appeared first on The Motley Fool Australia.

More reading

• These ASX 200 banks just made a decision that will affect 76,000 workers
• Own CBA (ASX:CBA) shares? Here’s the bank’s latest stance on climate pressures
• Leading brokers name 3 ASX shares to sell today
• Own CBA (ASX:CBA) shares? Here are the highlights from the bank’s AGM
• Own CBA (ASX: CBA) shares? Here’s the latest on the bank’s AI technology

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 Bruce Jackson.

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The BHP Group Ltd (ASX: BHP) share price is on the move on Friday. This follows the company conducting its annual general meeting (AGM) yesterday. In this meeting, the miner discussed a multitude of important topics, not the least of which was its commodity portfolio transformation.

Heading into afternoon trade, shares in the diversified mining company are exchanging hands for $38.73 apiece, up 2.46%. Despite this, the BHP share price is still 29.6% off its 52-week high of $54.55.

Nevertheless, the company’s management shared its ambitions for the future in its AGM. Let’s unpack what was covered during this event.

What’s happening with the BHP share price today?

The pressure for companies, governments, and organisations to abide by some form of climate target is a growing trend. As we speak, the Australian government is squabbling over the details of a climate agreement before heading into the Glasgow Climate Conference (COP26).

While some might see it as a hindrance, others are viewing the emerging policies as an opportunity. Australia’s third-largest listed company is one such player that is positioning for the potential megatrends to come out of this shift.

In its AGM yesterday, BHP explained it had conducted its own modelling in 2020 of a world aligned to the Paris Agreement. The result indicated such an environment would be beneficial to shareholders, with the company playing a role in the energy transition. From this, BHP reiterated its composition of assets will play a vital role in this trend.

In addition, the company highlighted its ongoing effort to assess its portfolio to ensure it delivers value to shareholders. Currently, import assets fitting the growing environmental, sustainability, and governance (ESG) narrative include copper, nickel, steel, and potash. As such, ESG investors might be taking the BHP share price more seriously today.

Climate efforts

Potash has been a major focus for BHP, with its Jansen mine expected to produce 4.5 megatonnes per year of the potassium-rich resource.

Furthermore, in its AGM, BHP outlined it has made strong progress towards meeting its climate initiatives. These include the following items:

• Establishing a pipeline of decarbonisation projects to achieve an emission reduction target of at least 30% by FY 2030.
• Committing an additional US$75 million to partnerships for decarbonising steelmaking customers.

To incentivise management towards achieving BHP’s climate goals, a component of executive remuneration is tied to climate-specific targets.

Shareholders will be hoping these targets provide better BHP share price returns than the past year. In the last 12 months, BHP shares have underperformed the benchmark index, rising only 4.4%.

The post BHP (ASX:BHP) share price climbs as miner hones in on ESG future appeared first on The Motley Fool Australia.

More reading

• Own BHP (ASX:BHP) shares? Here’s the miner’s latest push to reduce emissions
• 5 things to watch on the ASX 200 on Thursday
• Why did the BHP (ASX:BHP) share price have such a lousy FY22 first quarter?
• Could the Woodside (ASX:WPL) share price hit $27.50 by the end of 2021?
• BHP (ASX:BHP) share price rises amid coal asset sale rumours

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 Bruce Jackson.

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The Alumina Limited (ASX: AWC) share price is losing ground in afternoon trade today, trading 0.87% down at $2.27.

Alumina shares are edging lower following a release noting the quarterly earnings of its joint venture (JV) partner, Alcoa Inc.

Read on for more details.

What did Alumina announce?

Alumina gave investors an update of Alcoa’s Q3 FY21 earnings highlights, and its carry through to the pair’s joint venture known as Alcoa World Alumina and Chemicals (AWAC).

Alumina is a 40% owner of AWAC. The bauxite and alumina behemoth, established in 1995, holds about 25% of the global alumina market.

Given the pair’s geographically separate operations that are connected by the gulf of AWAC, Alumina found it prudent to provide a consolidated version of the three entities’ performance in Q3 FY21.

In its report, Alumina says AWAC produced 3.1 million tonnes in its refining business. It also mined 11.1 tonnes of material in Q3. This is a 3% downstep in both from the previous quarter.

The release also notes that the average one-month lagged alumina price index (API) for Q4 to date is approximately $410 per tonne.

This will “drive AWAC’s cash margin significantly higher than the $55 per tonne achieved in the third quarter”.

Alumina advises that the benefits of this increase will be reflected in AWAC’s Q4 earnings, plus the AWAC distributions to Alumina in Q1 FY22.

Alumina’s CEO, Mike Ferraro, said supply disruptions caused “the Chinese import parity price to rise sharply” in Q3.

Speaking about the announcement, Ferraro said:

This has been another solid quarterly performance by AWAC even though production costs remained at elevated levels and alumina prices were subdued due to high freight costs. However, since the end of the quarter, alumina prices have surged from the third quarter average one-month lagged price of $292 per tonne to around $480 per tonne.

The Alumina share price is up about 5.5% in the past week of trading.

Alumina share price snapshot

The Alumina share price has climbed about 21% this year to date and about 58% over the past 12 months.

It has rallied 7% in the past month as broader commodity markets have strengthened.

These returns have outpaced the benchmark S&P/ASX 200 index (ASX: XJO), which is up about 18% in the past year.

The post Alumina (ASX:AWC) share price edges lower on quarterly update appeared first on The Motley Fool Australia.

More reading

• Why Alumina, Aurelia Metals, Netwealth, & Piedmont Lithium are storming higher
• ASX 200 (ASX:XJO) midday update: Westpac’s $1.3bn earnings hit, Ansell sinks
• These were the 5 best performing ASX 200 resources in September
• Alumina (ASX:AWC) share price lifts on project update
• Use the sharp commodity sell-off to buy these ASX 200 mining shares

The author Zach Bristow has no positions 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 Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. At the time of writing, the benchmark index is up 0.45% to 7,345 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are rising:

ARB Corporation Limited (ASX: ARB)

The ARB share price is up 6% to $50.68. This morning the team at Citi upgraded this auto parts company’s shares to a buy rating with a $55.45 price target. The broker made the move in response to an update at ARB’s annual general meeting earlier this week. Citi was pleased with the positive start the company has made to FY 2022.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is up 4% to $22.55. Investors have been buying Flight Centre and other travel shares today after the New South Wales government announced plans to remove international travel restrictions from 1 November. Part of the plan will see NSW remove quarantine requirements for incoming travellers that have negative COVID tests.

HUB24 Ltd (ASX: HUB)

The HUB24 share price has risen a further 5% to $32.90. Investors have been buying this investment platform provider’s shares this week following the release of a strong first quarter update. One broker that was impressed was Morgans. In response, the broker retained its add rating and lifted its price target to $34.20. HUB24’s first quarter net inflows were stronger than the broker was expecting.

Qantas Airways Limited (ASX: QAN)

The Qantas share price is up 2% to $5.70. As well as getting a boost from the NSW border reopening plans, this morning Qantas released an announcement of its own. Qantas has agreed to sell its surplus land in Mascot, New South Wales to strengthen its balance sheet and pay down debt. LOGOS Property Group will be acquiring the 13.8 hectares of land for $802 million.

The post Why ARB, Flight Centre, HUB24, and Qantas shares are rising today appeared first on The Motley Fool Australia.

More reading

• The final Hub24 (ASX:HUB) dividend is being paid today. Here’s what you should know
• ASX 200 (ASX:XJO) midday update: Rio Tinto cuts guidance, Treasury Wine disappoints
• Qantas (ASX:QAN) share price rises after $800 million land sale agreement
• 5 things to watch on the ASX 200 on Friday
• Why the HUB24 (ASX:HUB) share price jumped 11% to a record high 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. owns shares of and has recommended Hub24 Ltd. The Motley Fool Australia has recommended ARB Corporation Limited, Flight Centre Travel Group Limited, and Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Fresh off of yesterday’s red hot gains, the Hub24 Ltd (ASX: HUB) share price is once again on fire this Friday. Hub24 shares are, at the time of writing, up a very pleasing 5.54% to $32.98 a share. That’s directly on top of the 8.77% gain this company saw yesterday.

It looks like Hub24 is going to cap off one of its best weeks in a long time. Since Monday, the company is now up more than 20%.

This all stems, of course, from Hub24’s first-quarter update that the company released yesterday. Investors were evidently excited by what Hub24 had to say. The company reported net inflows of $3 billion for the 3 months ending 30 September.

That boosted its overall funds under administration to $63.2 billion, an impressive increase of 229.1% over the prior corresponding period. Further, the company also crowed over pipping Netwealth Group Ltd (ASX: NWL) for the top spot for net inflows for the quarter. 

Hub24 shares pay out

But today, Hub24 shareholders have something else to look forward to. The wealth management company is set to pay out its final dividend for FY2021. Shareholders can look forward to seeing a payment of 5.5 cents per share, fully franked, hit their bank accounts sometime today. Well, shareholders who held Hub24 shares prior to the 13 September ex-dividend date, that is.

This final dividend represents some significant dividend growth for Hub24. Its last dividend, an interim FY21 payment, came in at 4.5 cents per share. Its previous final dividend for FY20 was 3.5 cents per share, meaning that today’s payment represents a dividend growth rate of 57% over last year’s final payout.

At Hub24’s current share price, this dividend puts Hub24’s annual yield at 0.3%. While that might sound too impressive, remember this. For a shareholder that purchased Hub24 shares exactly a year ago, Hub24’s last two dividend payments would give that investor a yield-on-cost of 0.46%.

At the latest Hub24 share price of $32.98, this company has a market capitalisation of $2.26 billion, and a price-to-earnings (P/E) ratio of 256.8.

The post The final Hub24 (ASX:HUB) dividend is being paid today. Here’s what you should know appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Why the HUB24 (ASX:HUB) share price jumped 11% to a record high today
• Why A2 Milk, HUB24, Netwealth & Perseus shares are storming higher
• ASX 200 (ASX:XJO) midday update: HUB24 & Netwealth impress, A2 Milk surges again
• HUB24 (ASX:HUB) share price on watch after record Q1 performance

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. owns shares of and has recommended Hub24 Ltd and Netwealth. The Motley Fool Australia owns shares of and has recommended Netwealth. The Motley Fool Australia has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Insurance Australia Group Ltd (ASX: IAG) share price is sliding on Friday after the Australian Securities and Investments Commission (ASIC) launched a Federal Court case against the company’s subsidiary.

ASIC alleges IAG’s subsidiary, Insurance Australia Limited, failed to honour discounts promised to some NRMA policyholders between March 2014 and November 2019.

The watchdog is arguing IAG misled customers by increasing insurance premiums while applying discounts for customer loyalty and ‘no claim bonuses’. Thus, some NRMA customers didn’t receive the full benefit of advertised discounts.

The news of legal action has seemingly sent the insurance provider’s stock plummeting today. At the time of writing, the IAG share price is $4.92, 3.05% lower than its previous close.

Let’s take a closer look at the case ASIC has brought against IAG.

What’s the court case about?

The IAG share price is slipping as ASIC takes the company to court, claiming it withheld more than $60 million of discounts from some of its customers.

The corporate watchdog alleges Insurance Australia Limited’s conduct was deceptive and misleading. The Federal Court will be determining if such behaviour contravened the ASIC Act and the Corporations Act.

According to ASIC, at least 596,000 NRMA home, motor, caravan, and boat Insurance customers were affected by the practice.

In a release to the ASX, IAG stated it reported itself to ASIC when an internal review found the behaviour in 2019.

It’s working closely with ASIC to undergo a remediation program. ASIC states the company’s remediation program will see $377 million returned to customers. IAG has already compensated 80% of the customers affected by the potentially misleading discounts.

It is worth noting, IAG is just the latest company to be caught up in payback programs.

According to ASIC, since 2018, QBE Insurance Group Ltd (ASX: QBE) has returned $15 million to customers. Westpac Banking Corp‘s (ASX: WBC) General Insurance Limited (now owned by Allianz Australia) has also remediated around $13 million. Finally, Commonwealth Bank of Australia‘s (ASX: CBA) Commonwealth Insurance Limited has handed back around $590,000 to customers since 2018.

IAG share price snapshot

The IAG share price has risen 4.4% this year to date, and around 3% over the past 12 months.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is up around 10% and 18% for the corresponding periods.

The post Here’s why the IAG (ASX: IAG) share price is down 3% on Friday appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Rio Tinto cuts guidance, Treasury Wine disappoints
• IAG (ASX:IAG) share price on watch as ASIC launches legal action
• Could the IAG share price hit $6 by the end of 2021?
• Why Ampol, Fortescue, IAG, & Perenti shares are charging higher
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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 owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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