The AusNet Services Ltd (ASX: AST) share price looks set to end its positive run on Wednesday.

In late morning trade, the electricity distributor’s shares are down 5% to $2.46.

However, the AusNet share price is still up almost 24% since this time last week.

What’s happening with the AusNet share price?

Investors have been bidding the AusNet share price higher this week after it received two takeover approaches.

On Monday Brookfield Asset Management made a non-binding offer to acquire the company for $2.50 per share. In response to this, AusNet decided to provide Brookfield with the opportunity to conduct exclusive due diligence for a period of eight weeks.

The latter was a blow for rival electricity distributor APA Group (ASX: APA), which tabled an even better offer of $2.60 per share in cash and shares on Tuesday. However, due to the period of exclusivity granted to Brookfield, the AusNet board will not be considering that offer at this time.

This didn’t go down well with APA, particularly given how it had made AusNet aware that an offer was coming.

AusNet hit back and explained: “The Board of AusNet agreed to this period of exclusivity in return for a materially increased indicative all cash offer price from Brookfield, as well as retaining the option to engage with other parties, including the provision of due diligence, with respect to any potential competing proposals post expiry of the exclusivity period with Brookfield.”

What’s next?

Given the due diligence situation, AusNet shareholders will have to wait until late November to learn whether the higher APA offer is going to be considered.

However, there are a couple of potential scenarios to consider before then. One is that if Brookfield were to make its offer binding, there’s always a chance AusNet could accept a lower, but binding offer, rather than run the risk of rejecting it and betting everything on a higher but non-binding offer. Especially given how APA’s offer is a mix of cash and shares.

In APA’s favour, there is the foreign investment review board (FIRB) to consider. Given that Spark Infrastructure Group (ASX: SKI) is in the process of being taken over by a North American consortium, there are concerns that the FIRB might not let another electricity distributor fall into the hands of overseas investors.

Especially given how all of Victoria’s electricity distribution and transmission infrastructure would be foreign owned if the Spark deal completes and AusNet were sold to Brookfield.

All in all, this takeover approach, and the AusNet share price, could be worth watching closely over the coming weeks and months.

The post AusNet (ASX:AST) share price down 5% amid takeover battle uncertainty appeared first on The Motley Fool Australia.

More reading

• Why APA, Kathmandu, Nickel Mines, & Sigma shares are dropping
• Which ASX 300 shares are the biggest winners and losers on Tuesday?
• ASX 200 (ASX:XJO) midday update: APA makes AusNet bid, New Hope results impress
• AusNet (ASX:AST) share price to rise after APA (ASX:APA) starts bidding war
• Here are the top 10 ASX shares 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 no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/2Zf3xCR

The Genesis Minerals Ltd (ASX: GMD) share price has soared into the green during early trade on Wednesday.

Genesis shares are now changing hands at 19 cents apiece, a 160% gain from the market open.

Let’s take a look.

What’s fuelling the Genesis Minerals share price today?

Genesis shares are on the move after the company made a key announcement regarding a capital raise and board restructuring.

The company advised its planned “strategic funding and board restructure”, which is “aimed at delivering extensive financial and management strength” to Genesis.

Overall, the moves are a part of the plan to “grow Genesis into a mid-tier Australian gold company”.

Under the above proposal, Genesis will seek to raise $16 million via a placement at 6 cents per share.

This signifies a 65% discount to the current Genesis Minerals share price. However, just prior to the announcement, it represented just an 18% discount.

The proposal is “led” by “highly regarded gold mining executive”, Raleigh Finlayson, who hails from previous managing director positions at Saracen Mineral Holdings (ASX: SAR) and Northern Star Resources Ltd (ASX: NST), as per the release.

Finlayson will be “appointed managing director of Genesis by no later than 31 March 2022”, and will have performance option rights attached to his tenure.

In addition, former Fortescue Metals Group Limited (ASX: FMG) managing director and CEO Neville Power will be invited to join the board, alongside “highly experienced corporate lawyer” Michael Bowen.

The moves appear to be a big step in credibility for the company, which now has an “enviable team” filling its board, according to the statement.

Genesis’ largest shareholder, Alkane, has advised the company that it “strongly supports the strategic investment and board changes”.

Investors appear to strongly support the changes too and are driving the Genesis Minerals share price into unseen heights during early trade on Wednesday.

What did management say?

Commenting on the announcement, Genesis chairperson Tommy McKeith said:

Raleigh is a highly successful gold miner with an exceptional track record of creating value for
shareholders, growing Saracen from a junior explorer and developer into a $6 billion company at the
time of its merger with Northern Star.

Speaking on the additional appointments to the board, McKeith added:

With Raleigh working alongside Neville, whose vast experience and achievements are widely acknowledged across the Australian business spectrum, and Michael, who is one of Perth’s most highly regarded corporate lawyers, Genesis will have an enviable team in the Boardroom.

Genesis Resources share price snapshot

The Genesis Resources share price wasn’t producing anything exciting before today’s announcement.

It closed yesterday’s session at 7.3 cents, down from around 8 cents a year ago.

It is now up 156% this year to date, and over 130% in the last 12 months – a huge plus for investors who bought Genesis shares back then.

The post Why the Genesis Minerals (ASX:GMD) share price is rocketing 160% today appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares to potentially buy in this volatility
• Woodside (ASX:WPL) share price rallies 3% as oil weighs in on Evergrande collapse
• South32 (ASX:S32) share price edges higher after plan to restart Brazil plant
• Archer Materials (ASX:AXE) share price soars 29% on US patent
• Mineral Resources (ASX:MIN) share price falls amid gas discovery update

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.

from The Motley Fool Australia https://ift.tt/3zuIQ2j

Volatility could provide an opportunity to look at ASX shares at lower prices.

Share prices are changing all the time, but a few negative days in a row can make a business much better value quite quickly, if the long-term profit isn’t being hurt as well.

Looking at the market can lead to finding opportunities that are now much better value.

Here are two to consider:

Accent Group Ltd (ASX: AX1)

The Accent share price has fallen 8% over the last week and it’s down 31% since 28 April 2021.

This is a shoe business with a number of stores which sells a large variety of brands. Skechers, Vans, Stylerunner, Glue Store, Pivot, The Athlete’s Store and The Trybe are just some of the names in the portfolio. It recently signed a distribution agreement with Skechers to extend it by another six years to December 2032.

The FY21 result showed what the business is capable of. Total sales increased around 20% to $1.14 billion. Total online sales increased 48.5% to $209.9 million.

But there were a number of profit margin improvements across the ASX share which helped deliver a large amount of profit growth. The gross profit margin increased 30 basis points, rising from 55.8% to 56.1%. This helped earnings before interest and tax (EBIT) rise 32.1% to $124.9 million and earnings per share (EPS) rose 38.2% to 14.2 cents.

This helped the business grow its annual dividend by 21.6% to 11.25 cents per share.

Accent continues to roll out more stores. It opened 90 new stores during the last financial year. Including the acquisition of Glue Store, its total store number increased to 638. New stores continue to perform better than older stores on more favourable rents.

It’s expecting to reach 700 stores in FY22, opening at least 65 new stores across all banners. Store growth in New Zealand continues to be a key focus. It currently has 75 stores in New Zealand and it’s targeting more than 100 stores by December 2023.

However, lockdowns are expected to hurt EBIT by at least $15 million, though it has implemented a range of inventory management and cost reduction initiatives. Store sales are obviously suffering, but digital sales continue to grow strongly.

According to Commsec, the Accent share price is now valued at 12x FY23’s estimated earnings. The projected FY23 grossed-up dividend yield is 8.5%.

Mineral Resources Limited (ASX: MIN)

The Mineral Resources share price is down 15% in a week and down almost 30% since the end of July 2021.

This ASX share generates a lot of profit from its iron ore operations, so investors may be focused on the impact of the falling iron ore price.

However, Citi notes that the company’s exposure to lithium may be able to limit the damage done by the weaker iron ore price. That’s one of the main reasons why the broker rates Mineral Resources as a buy with a price target of $65 for the next 12 months.

Including the expected profit decline, the Mineral Resources share price is valued at 12x Citi’s projection for FY23’s earnings with a projected grossed-up dividend yield of around 6% in that year.

In FY21 iron ore was still strong, which helped grow underlying net profit by 230% to $1.1 billion and the annual dividend soared 175% to $2.75 per share.

The post 2 ASX shares to potentially buy in this volatility appeared first on The Motley Fool Australia.

More reading

• Mineral Resources (ASX:MIN) share price falls amid gas discovery update
• 2 ASX dividend shares to buy next week
• The Mineral Resources (ASX:MIN) share price is down 7% today. Is it a buy?
• Why Accent, Ioneer, Lifestyle Communities, & Vulcan are sinking
• 2 buy-rated ASX dividend shares with attractive yields

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

from The Motley Fool Australia https://ift.tt/3CB8jZK

The Woodside Petroleum Limited (ASX: WPL) share price is a top performer on Wednesday, adding 3% to a 1-month high of $21.55.

Evergrande rattles oil markets

Oil prices fell sharply on Monday, sparked by fears that China’s Evergrande Group could default on its debt obligations and trigger a domino effect across the global economy.

Crude oil fell from US$71.68 to lows of US$69.63 before bouncing back to US$70.63 at the time of writing.

This dragged the Woodside share price lower on Tuesday, sliding 2.51% to $20.58.

The Evergrande crisis has made a dent in OPEC’s positive outlook for oil markets.

In its monthly oil market report, OPEC said that:

… the recovery in various fuels is expected to be stronger than anticipated and further supported by a steady economic outlook in all regions. Oil demand in 2022 is now projected to reach 100.8 mb/d, exceeding prepandemic levels.

S&P Global quoted analysts from Price Futures Group who said that “oil prices are trying to bounce back after being under pressure because of the concerns about China’s economy due to the possible default of China’s biggest property developer”.

“Those concerns had people running for haven protection in the dollar [and] put downward pressure on a lot of commodities.”

That said, analysts believe that oil demand is supported by a “surge in prices of alternative energy sources such as natural gas, particularly in Europe, where UK gas futures surged to record highs”.

“The region is set to face energy issues because of insufficient stockpiles, a situation that may worsen in the coming months as they enter the Northern Hemisphere winter.”

Woodside share price bounces to a 1-month high

The Woodside share price is making a comeback this month, pushing to a 1-month high of $21.55.

Shares in the oil and gas giant have gone nowhere since November last year, despite oil prices rallying more than 60% over the same period.

The post Woodside (ASX:WPL) share price rallies 3% as oil weighs in on Evergrande collapse appeared first on The Motley Fool Australia.

More reading

• ASX 200 rebounds into positive territory led by energy and materials shares
• 5 things to watch on the ASX 200 on Tuesday
• The Woodside (ASX:WPL) share price has just had a great week. What’s next?
• 5 things to watch on the ASX 200 on Monday
• These were the best performing ASX 200 (ASX:XJO) shares last week

Motley Fool contributor Kerry Sun 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.

from The Motley Fool Australia https://ift.tt/3lJs8HH

The South32 Ltd (ASX: S32) share price has been rattled by concerns about China’s economy and the possible default of its second-largest property developer, Evergrande Group.

Despite getting caught in the hysteria, the company announced some positive news regarding its Brazilian operations.

At the time of writing, the South32 share price is 0.76% higher to $3.315.

South 32 share price higher on smelter restart plans

South32 holds a 40% share in the Alumar aluminium smelter, which has been in care and maintenance since 2015.

Earlier this week, its joint venture partner Aloca announced plans to restart its operations. This announcement came on the back of surging spot prices.

The process to restart the idled capacity will begin immediately. First production is due around the second quarter of 2022.

The company expects the plant to ramp up to its full 268,000 metric tonne a year of capacity by the fourth quarter of 2022.

Aloca said that the restart is forecast to cost around US$75 million, including US$10 million in capital expenses.

The South32 share price has so far traded flat this week. Though it has fared much better than the S&P/ASX 200 Index (ASX: XJO).

“Our restart decision is based on an analysis that shows the smelter can be competitive throughout all cycles, leveraging the co-located refinery, a strong workforce, and competitive, renewable power arrangements,” Alcoa COO John Slaven said in a statement.

To add some perspective, South32 produced a total of 982,000 tonnes of aluminium in FY21.

Aluminum prices boom to 10-year highs

Aluminium is a top-performing commodity this year thanks to increasing production mandates from Chinese policymakers.

Aluminium prices were sitting around 2-year lows of about US$1,450 a tonne in May 2020, before rallying to US$2,550 a tonne by the end of FY21.

China’s supply squeeze, in addition to the recent military coup in the West African nation of Guinea, has propped up aluminium prices to a decade high of US$2,700 in early September.

This has helped drive the South32 share price to 2-year highs of $3.52 last Thursday.

The post South32 (ASX:S32) share price edges higher after plan to restart Brazil plant appeared first on The Motley Fool Australia.

More reading

• Here are the ASX 200’s most active shares this Tuesday
• New Hope (ASX:NHC) share price jumps on $337m profit turnaround
• Is the South32 (ASX:S32) share price a buy for dividends?
• Here are 3 of the most popular ASX 200 shares by volume today
• Top broker names 2 ASX dividend shares to buy

Motley Fool contributor Kerry Sun 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.

from The Motley Fool Australia https://ift.tt/3tZD2wA

The Archer Materials Ltd (ASX: AXE) share price has bolted out of the gates in today’s session.  

Shares in the high-tech materials company are flying more than 29% higher after releasing an announcement.

Let’s take a look at why investors are scrambling to bid the Archer share price higher.  

Archer share price soars on US patent

Shares in Archer are flying after announcing a commercialisation milestone earlier today.

The company notified investors that its CQ quantum computing chip has been granted a US patent.

According to Archer, the patent will provide the company with protection of the related intellectual property rights in the US.

Archer regards the US as a critical strategic jurisdiction to help protect and potentially commercialise its products.

As a result, the company noted that the granting of the US Patent is a significant step in its efforts to access global markets and participate in the US technology economy.

In particular, Archer’s announcement highlighted the US government’s commitment to continue investment in quantum technologies.

Archer CEO Dr Mohammad Choucair commented:

Most of the investments, R&D, innovation, and commercialisation in quantum computing takes place in, or originates from, the US. At the core of this thriving innovation ecosystem are patents and the accompanying IP rights. Archer is one of few companies with a patent portfolio protecting quantum computing chip technology and one with a unique global competitive advantage.

More on the Archer Materials share price

Archer is a technology company that operates within the semiconductor industry.

The company has a vast pipeline of semiconductor devices that are in various developmental and commercialisation stages.

Shares in Archer Materials recently rocketed to a record high of $3.08 last month, following a patent update.

However, the company’s share price came under pressure following media speculations regarding its patent application in Australia.

The company rejected the accusations made against its CQ quantum computer chip patent.

Despite suffering a sharp pullback, the Archer share price remains more than 300% higher for the year.

At the time of writing, shares in Archer are trading nearly 9% higher for the day at around $2.19.

Shares in the tech company were up more than 29% earlier after hitting an intra-day high of $2.61.

The post Archer Materials (ASX:AXE) share price soars 29% on US patent appeared first on The Motley Fool Australia.

More reading

• The Archer Materials (ASX:AXE) share price is flying 7% higher today

Motley Fool contributor Nikhil Gangaram 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.

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

The Mineral Resources Limited (ASX: MIN) share price is falling today despite good news from its 80%-owned gas discovery.

The Lockyer Deep-1 Gas Discovery is expected to contain more gas than pre-drilling activities found previously.

The resource is 80% owned by Mineral Resources’ subsidiary Energy Resources Limited and 20% owned by Norwest Energy NL (ASX: NWE). It is located in the Perth Basin.

Right now, the Mineral Resources share price is $44.39, 2.7% lower than its previous close.

Let’s take a closer look at today’s news of the Lockyer Deep-1 Gas Discovery.

Positive update on Lockyer Deep-1

The Mineral Resources share price is in the red amid Norwest Energy’s announcement of the companies’ gas discovery.

The Lockyer Deep-1, a joint venture between the companies, has been found to be more prosperous than previously thought.

Norwest Energy released an update on wireline logging operations at the discovery this morning, stating the findings upgrade the discovery’s prospects.

Lockyer Deep-1’s Kingia target, found within Kingia sandstone, has been found to be of higher quality than previously predicted.

Norwest stated high reservoir pressures indicate the target has a gas column of between 600 metres and 800 metres.

This means the indicative areal extent of the discovery is around 66 square kilometres. The area’s estimated gas resources are now believed to be greater than the company’s pre-drill prospective resources.

The reservoir is now estimated to have a net gas pay of 20.2 metres, total vertical depth. It’s expected to have an average porosity of 16% and average permeability of 500 millidarcys.

The companies’ petrophysical analysis of the target found a 34-metre gross pay interval at the top of the Kingia sandstone. The gross pay interval has a total vertical depth of between 3,888 metres and 3,922 metres from sea level, with no gas-to-water contact found.

According to Norwest, the finding is remarkable and confirms the fault-seal integrity of the structure’s main bounding faults despite a very significant gas column.

Mineral Resources share price snapshot

Despite today’s dip, the Mineral Resources share price has been performing well lately.

It is currently 16% higher than it was at the start of 2021. It has also gained 77% since this time last year.

The post Mineral Resources (ASX:MIN) share price falls amid gas discovery update appeared first on The Motley Fool Australia.

More reading

• The Mineral Resources (ASX:MIN) share price is down 7% today. Is it a buy?
• 2 buy-rated ASX dividend shares with attractive yields
• The latest ASX 200 mining shares to get hit by broker downgrade
• ASX 200 midday update: Macquarie jumps, gold miners sink
• Why the Mineral Resources (ASX:MIN) share price is moving higher 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 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.

from The Motley Fool Australia https://ift.tt/3u0wOfN

Shareholders in ASX 200 companies heavily reliant on the iron ore price, like BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO), could be a little worried after the Australian Strategic Policy Institute (ASPI) said Australia’s iron ore exports with China may be at risk.

At close of trade yesterday, shares in BHP ended the day at $37.75 – up 0.59%. The Rio share price closed yesterday at $95.71 – up 0.49%. The S&P/ASX 200 Index (ASX: XJO) ended the day 0.35% higher.

Let’s take a closer look.

‘…would (the metal) join the long list of lesser Australian exports subject to Chinese coercion?’

In a report for ASPI, investment analyst David Uren argues the falling iron ore price represents an opportunity for the Chinese government to finally free itself from its dependence on Australia’s iron ore.

Australia is the cheapest and closest iron ore exporter to China and is one of the few surviving exports between the two nations. The People’s Republic has placed heavy tariffs on Australian barley, beef, wine, and seafood and completely banned Australian coal.

“[I]n a market in which there’s surplus iron ore and China has the market power, it’s possible that political rather than market forces may determine which mines survive or close. It might not be the world’s lowest cost producers, which both Rio Tinto and BHP would consider themselves to be, that win the lion’s share of the business,” said Uren.

“There’s no plausible scenario in which China can dispense with Australian iron ore but, in a market with surplus supplies, it could limit supplies through quotas. If China’s campaign of economic coercion against Australia were to continue, it could take, say, 500 million tonnes/year from Australia rather than the 740 million tonnes it bought in 2020.”

Tensions between China and Australia have ratcheted up in recent days on the announcement of a new military alliance between Australia, the United Kingdom, and the United States, AUKUS.

Iron ore price today

At the time of writing, the iron ore price today is hovering around the US $104 per tonne mark. It’s fallen 25% in a month and 34% since the beginning of the year.

The BHP and Rio share prices have both taken similar falls to iron ore. Both companies are highly reliant on the metal and their finances can be largely dependent on the commodity’s movement.

According to the website Trading Economics, cuts to Chinese steelmaking quotas have caused a slump in demand for the product and, thus, the falling price. The situation may also be exacerbated by the Evergrande implosion.

The post Iron ore price may fall further as experts warn of China trade risk appeared first on The Motley Fool Australia.

More reading

• September has been a terrible month so far for the Rio Tinto (ASX:RIO) share price
• What the Evergrande crisis could mean for ASX 200 iron ore shares
• Leading brokers name 3 ASX shares to sell today
• ASX 200 rebounds into positive territory led by energy and materials shares
• New Hope (ASX:NHC) share price jumps on $337m profit turnaround

Motley Fool contributor Marc Sidarous 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.

from The Motley Fool Australia https://ift.tt/3u88wRm

The S&P/ASX 200 index (ASX: XJO) has cooled off over the last month and slipped 2.5% into the red.

Whereas the broad indices have taken a minor hit, the Bluescope Steel Limited (ASX: BSL) share price has lagged well behind its benchmark, and now trades at $21.54.

That’s an 8% drop over the last month, and a further 10% into the red in this past week.

What’s up with the Bluescope share price lately?

The Bluescope Steel share price has been on a rocky ride since the spot price of iron ore took a nosedive in July.

Iron ore’s come off a record high of US$230/Tonne (T) in May, and then US$226/T in July to now trade at US$104.50/T, a 53% drop.

At the same time, the spot price of steel has been in an uptrend since last month. Steel now trades at US$882.80/T, an approximate 15% gain since 19 August.

This disconnect in the price of steel and iron ore appears to have plagued Bluescope’s share price over the past 2 months. As mentioned – it’s been a bumpy road for shareholders.

However, Bluescope hasn’t escaped the elephant in the room, which remains the downward trend in iron ore’s spot price.

Iron ore is one main ingredient used to forge steel, and over 90% of all iron ore mined goes towards the production of steel.

But iron ore seriously appears to be on a one-way ticket to the south pole, having lost US$121.50/T in value over a matter of weeks.

As such, Bluescope shares have dropped a further 10% over successive days since 16 September.

What are analysts saying about Bluescope shares?

One leading broker is taking a more upbeat view on the Bluescope share price, despite the commotion in the commodity markets.

Investment banking giant UBS has weighed in with its view and sees pricing strengths in the steel markets as a plus for Bluescope.

It is bullish on steel prices and sees fundamental drivers propping steel markets higher over the coming periods.

The broker now assumes a US steel spread of US$1,361/T in the first half of FY22, which should favourably impact Bluescope’s financials.

UBS now estimates the steel giant’s earnings before interest and tax (EBIT) for H1 FY22 to come in at A$2.1 billion, which is higher than Bluescope’s guidance of A$1.8billion to A$2 billion.

This scenario is helped by a weaker Australian Dollar, which makes Australian exports cheaper for overseas buyers.

In addition to its steel forecasts, UBS is also keeping a close eye on developments out of China, where steel production has recently been curbed by Chinese authorities.

Whilst it sees “lower Chinese steel production as a positive for Bluescope (on lower Chinese hot rolled coil exports)”, it also does see “some risk that a rapid deterioration” in the Chinese property sector could result in “excess tonnes being exported”.

The Bluescope share price is up 23% this year to date and has gained 68% over the last 12 months – well ahead of the broad index.

The post What this leading broker thinks of the BlueScope Steel (ASX:BSL) share price appeared first on The Motley Fool Australia.

More reading

• BlueScope Steel (ASX:BSL) share price sinks 7% despite strategy update
• These ASX 200 shares are trading ex-dividend today
• Why Appen, BlueScope, Fortescue, & Marley Spoon shares are dropping
• 5 things to watch on the ASX 200 on Tuesday
• 10 ASX shares we’re overweight in right now: fund

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.

from The Motley Fool Australia https://ift.tt/3ztbW28

The Zip Co Ltd (ASX: Z1P) share price is rising on Wednesday morning.

At the time of writing, the buy now pay later (BNPL) provider’s shares are up 1.5% to $6.33.

Why is the Zip share price rising?

The Zip share price is pushing higher this morning after investors responded positively to an announcement.

According to the release, the company has agreed to make a strategic US$50 million investment in India-based BNPL operator ZestMoney.

The release notes that ZestMoney was founded in 2015 and is now one of the largest and fastest growing BNPL platforms in India. It currently has 11 million registered users, over 10,000 online merchants on the platform, and a point of presence in over 75,000 physical stores.

Management advised that this investment is consistent with its strategy to build a truly global BNPL business. And one that supports regional and global partners in multiple markets, providing everyone, everywhere with access to fair and transparent payment products.

The India market

The company highlights that the India market is poised for consumption driven boom. This could potentially make it one of the largest markets globally one day.

In fact, the release reveals that the India market is forecast to have US$300 billion+ in BNPL payment volume by FY 2026.

This is expected to be driven by changing consumer spending trends, increased penetration of online shopping, population age demographics, a large underuse of credit, an emerging middle class, and transformation in the digital payment ecosystem.

Overall, the company sees the potential for the overall Indian BNPL user base to reach ~80 to 100 million users by FY 2026. This is more than the estimated 73 million unique credit card users in India at present.

The investment

The release explains that Zip will acquire a minority shareholding in ZestMoney. This will be by investing US$50 million to subscribe for Series C Preference Shares.

Zip has also negotiated terms to increase its shareholding over time, with specific reserved matters requiring Zip approval and a board seat as part of the investment.

It also notes that the investment has been executed using a similar strategy to the one that ultimately led to the acquisition of Quadpay.

Zip’s Co-founder and Chief Executive Officer, Larry Diamond, commented: “We are excited to partner with ZestMoney to drive fair and responsible payment solutions in India. While Buy Now, Pay Later is emerging as a preferred mode of payment globally, in India it also plays a crucial role in driving access to credit.”

“With more people using digital payments and online shopping, ZestMoney can positively impact hundreds of millions of lives in the coming years. With deep partnerships with online and offline merchants and lending partners, ZestMoney is poised to accelerate growth as the market develops. We have been incredibly impressed with the founders and leadership team and look forward to the next stage of the ZestMoney journey,” he added.

The Zip share price is now up 13.5% in 2021.

The post Zip (ASX:Z1P) share price higher on India BNPL investment news appeared first on The Motley Fool Australia.

More reading

• The Zip (ASX:Z1P) share price is down 10% in a week. Here’s why
• These are the 10 most shorted ASX shares
• Why is the Zip (ASX:Z1P) share price faring so much worse than Afterpay today?
• What percentage of Zip (ASX:Z1P) shares are owned by insiders?
• How has the Zip (ASX:Z1P) share price performed since reporting results?

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 ZIPCOLTD FPO. 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.

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