The Charger Metals NL (ASX: CHR) share price is gaining again today, despite no news having been released by the company.

Right now, shares in Charger are 9.72% higher than their previous close, bringing its share price to 79 cents.

Today’s gains included, the Charger share price has gained a massive 80% over the course of this week. It is also 252% higher than it was when it completed its initial public offering (IPO) on the ASX on 9 July.

Let’s take a look at what’s been driving shares in the lithium and critical metals-focused minerals company higher.

Why is Charger’s stock gaining?

The Charger Metals share price has been performing exceptionally well since it released news of its 70% owned Bynoe Lithium Project on Wednesday.

The company announced it has begun fieldwork at the Northern Territory project, which it says is prospective for spodumene.

The Bynoe Lithium Project is also partly owned by Lithium Australia NL (ASX: LIT) and is surrounded by Core Lithium Ltd’s (ASX: CXO) Finnis Lithium Project.

The fieldwork that is now underway will include mapping, geochemistry, and aero-magnetics.

Charger says the project houses 14 identified pegmatite anomalies along a 5-kilometre-long zone.

Additionally, the project’s pegmatites have previously produced cassiterite. They are also prospective for tantalite.

After the fieldwork is finished, the Charger share price might be boosted by more news of the project. The company expects the fieldwork’s findings to refine the project’s lithium targets so Charger can begin a drilling campaign.

Charger Metals’ exploration portfolio also partly owns projects prospective for copper, nickel, platinum group elements, and gold.

Charger Metals share price snapshot

It goes without saying that Charger Metals’ first few weeks on the ASX have been outstanding.

The company’s prospectus had its shares going for 20 cents apiece — they’re now trading for nearly 300% more.

The company has a market capitalisation of around $36 million, with approximately 50 million shares outstanding.

The post Why the Charger Metals (ASX: CHR) share price is up 80% this week appeared first on The Motley Fool Australia.

More reading

• Charger Metals (ASX:CHR) share price is powering 28% today, up 240% in a month
• Here’s why the Charger Metals (ASX:CHR) share price has surged 100% in a week

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/3lWW055

At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. The benchmark index is currently up 0.5% to 7,627.7 points.

Here’s what is happening on the ASX 200 on Friday:

Telstra share price hits 52-week high

The Telstra Corporation Ltd (ASX: TLS) share price has climbed to a new 52-week high on Friday. This follows a positive reaction to its full year results release from brokers. Among the most positive were analysts at Credit Suisse, Goldman Sachs, and Morgans. They have all retained the equivalent of buy ratings and lifted their price targets. Credit Suisse has retained its outperform rating and increased its price target to $4.25. Whereas Goldman has a buy rating and new $4.30 price target and Morgans has an add rating and new price target of $4.34.

PointsBet shares higher on

The PointsBet Holdings Ltd (ASX: PBH) share price is pushing higher today. This morning it revealed that it has received regulatory approval from the West Virginia Lottery Commission and has now launched online sports betting operations in the state. West Virginia marks the seventh operational US state for PointsBet’s premium sports betting product. Management believes West Virginia represents another tremendous opportunity.

Lithium miners sink

A number of lithium miners such as Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS) are under pressure on Friday. This appears to have been driven by profit taking after some sensational recent gains. For example, the Orocobre share price is still up 32% in the space of a month despite tumbling 5% today.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Premier Investments Limited (ASX: PMV) share price with a 5% gain. This morning UBS resumed coverage on the retailer with a buy rating and $30.00 price target. The worst performer on the ASX 200 has been the Orocobre share price with a 5% decline. This appears to have been driven by profit taking in the lithium sector.

The post ASX 200 midday update: Telstra 52-week high, PointsBet rises on US update appeared first on The Motley Fool Australia.

More reading

• Telstra (ASX:TLS) share of Digicel acquisition must be a minority — CEO
• Top brokers give their verdict on the Telstra (ASX:TLS) share price
• Here’s why the PointsBet (ASX:PBH) share price is racing higher today
• 5 things to watch on the ASX 200 on Friday
• ASX 200 edges higher, Telstra climbs, NAB up

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 Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. 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/2Xp9ZX9

The Commonwealth Bank of Australia (ASX: CBA) has thrown its formidable weight behind the Reserve Bank of Australia’s (RBA) governor, Phil Lowe.

CBA’s CEO Matt Comyn said he agreed with Lowe that payment laws that apply to traditional banks should also apply to the big-name technology companies moving into the payments space.

Why are tech company payments regulations different?

The different regulatory playing fields for traditional banks like CBA and companies like Afterpay Ltd (ASX: APT), which Square Inc (NYSE: SQ) proposes to acquire for $39 billion, largely comes down to 2 words: system and services.

As the Australian Financial Review reports, Australian courts “have restricted the definition of payments ‘system’”. For that reason, the RBA wants to extend its mandate from “oversight of the payments ‘system’ to payments ‘services’”.

That would ensure that companies like Afterpay, as well as tech giants like Google (Alphabet Inc Class A (NASDAQ: GOOGL)) and Apple Inc (NASDAQ: AAPL) which are also moving into the payments space, will have to play by the same rules as CBA and the other big banks.

“I agree with the Governor’s comments in that the definition of payments is very narrow at the moment,” Comyn said.

He added (quoted in the AFR):

I do believe some competition issues could look to be addressed. I am sure policy makers will start at the principle [of what is in the best interest of country and customers] and it could lead to some quite significant reshaping of the laws, that currently aren’t applied to a number of providers.

Comyn pointed out that this wasn’t just an issue Down Under. “These exact discussions and debates, and some early legislation, are already occurring in other markets around the world,” he said.

How has CBA been performing?

The CBA share price is up 44% over the past 12 months, well outpacing the 25% gains posted by the S&P/ASX 200 Index (ASX: XJO).

Year to date, the CBA share price continues to outperform, up 25% in 2021.

The post Why CBA (ASX:CBA) is backing the RBA in push for payment reforms appeared first on The Motley Fool Australia.

More reading

• ASX 200 bank shares to follow suit after CBA dividend hike: expert
• Cathie Wood loves these 3 crypto stocks
• How to make the most of the CBA (ASX:CBA) share buyback
• CBA’s bumper profit, IAG’s loss and Telstra expectations. Scott Phillips on Nine’s Late News
• Why AGL, Appen, CBA, & Rio Tinto shares are tumbling lower

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Alphabet (A shares), Alphabet (C shares), Apple, and Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. 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/3AyikG0

The Galan Lithium Ltd (ASX: GLN) share price opened lower on Friday after the company successfully completed a $50 million institutional placement. The lithium explorer plans to use the funds raised to accelerate the development of its lithium projects.

At the time of writing, the Galan share price is down 5.86% trading at $1.21.

Galan Lithium share price lower following capital raising

Galan advised that it has received firm commitments to raise $50 million through a two-tranche institutional placement at $1.15 per share or a 10.2% discount to its last closing price of $1.28 on 11 August.

Tranche one will raise a total of $29.8 million, with new shares to be issued on Friday, 20 August.

Tranche two will seek to raise a further $20.2 million, subject to Galan shareholder approval, sought at the company’s extraordinary general meeting in late September.

Galan notes that tranche two was subscribed by two institutional investors with a track record of successful investments in the natural resources sector.

What are the funds for?

Galan’s June quarter results highlighted near term plans to convert lithium resources to reserves as well as the commencement of drilling programs.

According to today’s announcement, the proceeds from the placement will be used to accelerate drilling activities to convert existing resources to reserves, fund ongoing exploration activities and the completion of feasibility studies.

What did management say?

Galan managing director Juan Pablo Vargas de la Vega said:

We are delighted to announce the completion of the placement which has enabled us to introduce a number of high quality institutions to Galan’s register.

This represents a significant milestone in the history of the company and the recognition from these leading investors provides significant external validation for Galan’s extensive portfolio of strategic lithium projects.

Galan Lithium share price snapshot

Despite today’s pullback, the Galan Lithium share price is up 229% year-to-date and has surged 713% in the last 12 months.

The lithium explorer has a market capitalisation of just $313 million.

The post Galan Lithium (ASX:GLN) share price tumbles 6% after $50 million placement appeared first on The Motley Fool Australia.

More reading

• Why is the Galan Lithium (ASX:GLN) share price frozen?

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/3sdZamb

The National Australia Bank Ltd (ASX: NAB) share price is pushing higher again on Friday.

In morning trade, the banking giant’s shares are up over 1% to $27.62.

This latest gain means the NAB share price is now up 21% since the start of the year.

Can the NAB share price keep climbing?

The good news for investors is that Goldman Sachs is tipping the NAB share price to continue its rise.

According to a note, the broker has retained its conviction buy rating and lifted its price target to $30.62.

Based on the latest NAB share price, this implies potential upside of almost 11% over the next 12 months excluding dividends. Including dividends, this potential return stretches to over 15.5%.

What did the broker say?

Goldman Sachs was pleased with NAB’s performance in the third quarter. It notes that the bank is tracking ahead of its second half expectations.

It said: “NAB reported unaudited cash earnings from continuing operations of A$1.70 bn, up 1% on the previous period average, run-rating 11% ahead of what was implied by our previous 2H21E forecasts (lower BDDs). PPOP trends were softer on account of weak Markets and Treasury revenues and 3Q21 CET1 ratio of 12.6% was running ahead of our forecasts.”

This stronger than expected performance led to Goldman Sachs upgrading its earnings estimates for FY 2021 and FY 2022. This underpinned the increase in its NAB share price target.

Why is Goldman bullish?

NAB is the broker’s preferred sector exposure due to four key reasons. These are its cost management initiatives, its position as the largest business bank, its management of volumes and margins, and its potential return.

In respect to its cost management, Goldman said: “NAB’s cost management initiatives, which seem further progressed relative to most of its peers, should drive productivity benefits sooner and free up investment spend to be directed more towards customer experience, as opposed to infrastructure (3Q21 update shows NAB is tracking well against this).”

And Goldman feels that NAB’s position as the largest business bank and its investment in its mortgage capability means it is “strongly positioned to benefit from the current recovery in both housing and commercial volumes.”

All in all, the NAB share price may be smashing the market this year, but this leading broker doesn’t believe the run is over.

The post Why the NAB (ASX:NAB) share price can keep rising appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• ASX 200 edges higher, Telstra climbs, NAB up
• Is the NAB (ASX:NAB) share price in the buy zone after its Q3 update?
• ASX 200 midday update: Telstra, NAB, & QBE results
• NAB (ASX:NAB) share price on watch following June quarter update

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 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/3ADuT38

The Commonwealth Bank of Australia (ASX: CBA) share price lifted to another record following its full-year results on Wednesday.

Part of the excitement stemmed from Australia’s biggest bank increasing its full-year dividend by 17% compared to the previous year. An investing expert expects similar cash splashes from other banks in the ASX 200.

Speaking of the benchmark, the S&P/ASX 200 Index (ASX: XJO) has also been ascending to new heights in the past week. On Wednesday, the Aussie index cemented a record level of 7,614.2 points. The continued strength in the CBA share price has certainly helped to achieve this.

Money shower for bank investors

Earlier in the week, CBA announced its FY21 results which came along with an extra big dividend payday. The bank had plenty of excess capital to reward shareholders, with net profits burgeoning to $8,843 million.

Indeed, shareholders are not complaining after CBA revealed a 17% increase in its dividend. This takes the full-year payment to $3.50 per share. In addition to the dividend splurge, investors will be treated to a $6 billion off-market share buy-back.

Over the past year, the ASX-listed bank share has been flushed with cash. This was the result of monetary policies and government stimulus propping the economy up throughout the COVID-19 pandemic. As a result, strong growth across business lending, home lending, and household deposits occurred.

Portfolio Manager of Ausbil Active Dividend Income Fund, Michael Price, suggested investors can expect to see others follow CBA.

We have been expecting a big dividend from CBA – and we expect similar announcements from the other majors, and have been positioned accordingly.

According to Ausbil’s June fact sheet for the income fund, the fund manager’s top holding is CBA. Furthermore, Ausbil is overweight on bank shares including CBA, National Australia Bank Ltd (ASX: NAB), Westpac Bank Corp (ASX: WBC), and Macquarie Group Ltd (ASX: MQG).

We see a multi-year growth path for bank dividends as they unwind the excess COVID capital they are holding, and as the economy grows.

Michael Price, Ausbil

When are ASX 200 bank shares reporting?

Well, as you would know by the end of this article CBA has already released its full-year results. At the time of writing, there are still some notable ASX 200 bank shares left to release their financials this reporting season.

Monday (16 August) will see Bendigo and Adelaide Ltd (ASX: BEN) dish out its full-year result to investors. Following that, Westpac Banking Corp (ASX: WBC) will report the next day, and ANZ on 18 August. A complete list of ASX companies reporting, including the ASX 200 bank shares, can be found on our ASX reporting season calendar.

The post ASX 200 bank shares to follow suit after CBA dividend hike: expert appeared first on The Motley Fool Australia.

More reading

• How to make the most of the CBA (ASX:CBA) share buyback
• CBA’s bumper profit, IAG’s loss and Telstra expectations. Scott Phillips on Nine’s Late News
• Why AGL, Appen, CBA, & Rio Tinto shares are tumbling lower
• Brokers give their verdict on the CBA (ASX:CBA) share price
• Top brokers name 3 ASX shares to sell today

Motley Fool contributor Mitchell Lawler owns shares of Commonwealth Bank of Australia and Macquarie Group 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 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.

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

The Duratec Ltd (ASX: DUR) share price has jumped out of the starting blocks in early trade, landing firmly in the green.

Duratec shares are on the move in this morning’s session as the company announced it had secured another key contract win in its defence portfolio.

Let’s investigate futher.

A quick recap on Duratec

Duratec is an investment holding company that has exposure to defence, mining, industrial, and building (among other segments) in its portfolio.

The company has a wide service offering, spanning from asset protection to spatial integration.

As a result of its efforts thus far, Duratec has a market capitalisation of $102 million at the time of writing.

What did Duratec announce?

In a positive for the Duratec share price, the company advised it has been awarded “a $53 million design and construction wharf project”, under its joint venture with Ertech Group.

In addition, Durtec confirmed “initial works” have started, while the project is “due for completion in September 2023”.

Duratec has now secured $32 million in defence contracts in recent months. Consequently, the company’s “defence-focussed order book” now comes in at $110 million, whereas its total order book now sits at $230 million.

Duratec’s exposure to defence “continues to be a strategic focus” for the company. For instance, it now has a “presence” on 37 of 75 defence bases delivering “whole-of-life projects” in Australia.

Moreover, the company now has $200 million in defence tenders “submitted and awaiting decision”, with a further $1 billion in “tangible opportunities”.

As a result of this fundamental momentum, Duratec is “confident of ongoing growth” in each of its key sectors, another positive for the Duratec share price.

Further, with $635 million in “tendered works” and an additional $2.2 billion in “pipeline opportunities” visible, this may not an unreasonable expectation.

Investors seem to have enjoyed the announcement and are pushing up the Duratec share price today.

Duratec shares are now exchanging hands at 49 cents apiece, a 13.95% jump from yesterday’s closing price.

Duratec share price snapshot

The Duratec share price has faced headwinds this year to date, posting a loss of 17% since January 1. It has also fallen 19% in the past 12 months.

These results have lagged the S&P/ASX 200 Index (ASX: XJO)’s return of around 25% over the past year.

Despite the downward pressure this year, Duratec shares are up 18% in the last month, and have climbed 14% into the green over the last week.

The post Duratec (ASX:DUR) share price rockets 14% on new contract appeared first on The Motley Fool Australia.

More reading

• ASX 200 bank shares to follow suit after CBA dividend hike: expert
• Why the Province Resources (ASX:PRL) share price is up 9% on Friday
• Why the Lithium Australia (ASX:LIT) share price is powering 10% ahead today
• Telstra (ASX:TLS) share of Digicel acquisition must be a minority — CEO
• Evolution (ASX:EVN) share price higher on major funding announcement

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/2VUP91f

The Province Resources Ltd (ASX: PRL) share price is surging on Friday after a company announcement.

The announcement contained a number of updates for its HyEnergy Zero Carbon Hydrogen Project.

Province Resources is aiming to become Australia’s first truly zero-carbon green hydrogen project.

At the time of writing, the Province Resources share price is up 9.37% to 18 cents.

What did Province Resources announce?

Province Resources advised that its scoping study data collection is proceeding as anticipated. It expects heritage, ecological, environmental and geotechnical studies to commence shortly.

In addition, the company has been undertaking advanced modelling of expected green hydrogen prices and the cost of production to optimise an initial Phase 1 development.

The green hydrogen industry is in its infancy. Province Resources is actively working with and assisting multiple state government departments to develop a comprehensive legislative regime.

The company hopes to secure a lead agency status to help advance the project’s environmental and other permitting requirements.

Province Resources highlighted that at the local government level, it secured the support of the Shire of Carnarvon. It has entered a memorandum of understanding (MoU) to investigate the use of 12.3 hectares north of the Carnarvon township.

The company will explore whether the area is suitable to develop infrastructure for the HyEnergy Zero Carbon Hydrogen Project.

Province Resources has also commenced discussions with a number of potential domestic offtake partners in the transport and utility sectors. It will expand these discussions to include potential international offtakers, too.

Management commentary

Province Resources’ CEO David Frances commented on the recent theme of hydrogen.

Globally we have seen more and more hydrogen projects being announced. Key market pricing predictions and technology developments at all stages of the value chain indicate this transition to green energy is happening even more rapidly than we anticipated.

Frances also shed light on the risks of operating in a relatively new sector.

As with any pioneering industry, there are of course risks facing the HyEnergy Partners, in particular the current absence of certainty of land tenure for green hydrogen projects or a comprehensive legislative regime to govern the industry.

But what is clear to us is that all stakeholders want the green hydrogen industry to succeed, that solutions will be found in a collaborative manner to the current obstacles to the development of the industry and that there is a recognition that the HyEnergy Partners are a key participant in the industry.

About the Province Resources share price

The Province Resources share price has surged an eye-watering 1,620% year to date.

The sharp surge was driven by the company’s acquisition of Ozexco Pty Ltd. This gave it access to a number of exploration licence applications in the Gascoyne region of Western Australia.

The company’s shares surged 458% from 2.5 cents to 14.5 cents on the day of the announcement.

The post Why the Province Resources (ASX:PRL) share price is up 9% on Friday appeared first on The Motley Fool Australia.

More reading

• Here’s why the Province Resources (ASX:PRL) share price is up 7%

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/3CIIYht

The Lithium Australia NL (ASX: LIT) share price is starting Friday morning with a bang following a positive announcement from the lithium company.

At the time of writing, Lithium Australia shares are up 10.34% to 16 cents apiece. In comparison, the All Ordinaries Index (ASX: XAO) is up 0.3% to 7,882 points.

What did Lithium Australia announce?

Investors appear to be excited about the company’s latest developments, sending Lithium Australia shares to a new 8-month high.

According to its release, Lithium revealed it has filed two new international patent applications to the Australia Patent Office.

Submitted under the Patent Corporation Treaty, the applications related to Lithium Australia’s 90% owned subsidiary, Envirostream Australia’s technology. The patent refers to the company’s recycling process for lithium-ion batteries and the recovery of electrode materials.

The first patent titled, “Process for recovering values from batteries”, describes the selective separation process for recovering electrode material from lithium-ion batteries. This includes mixed metal dust that comprises both cathode and anode powders.

The next patent, titled “Process for recovering values from process liquors” explains the process for selective recovery of mixed metal sulphates. This is performed when the leaching of mixed metal material is recovered from lithium-ion batteries.

Lithium Australia managing director, Adrian Griffin commented:

The Lithium Australia group is acutely aware of its environmental footprint and that of the society within which we live and operate. We can no longer afford to discard any products to landfill, let alone those that have a high embedded energy footprint, contain critical materials, or – in the case of lithium-ion batteries – both.

We have developed unique processes to deal with battery waste and invite like-minded industry participants to work with us in improving the sustainability of our consumer-based society.

Lithium Australia share price summary

Over the last 12 months, Lithium Australia shares have accelerated by more than 170%, with year-to-date gains above 140%. The company’s share price reached a 52-week high of 21 cents in January 2021.

Based on today’s price, Lithium Australia has a market capitalisation of roughly $153.9 million, with 961 million shares on issue.

The post Why the Lithium Australia (ASX:LIT) share price is powering 10% ahead today appeared first on The Motley Fool Australia.

More reading

• Lithium Australia (ASX:LIT) share price powers 6% on new membership

Motley Fool contributor Aaron Teboneras 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/2VP8GQg

The Telstra Corporation Ltd (ASX: TLS) share price is on the radar once more due to its potential Digicel Pacific acquisition.

In early trading today, Telstra shares are swapping hands for $4 apiece, a gain of 0.88%.

Building on previous announcements, Telstra CEO Andy Penn added colour on the “incomplete” discussions in the telco giant’s FY21 results yesterday.

Let’s investigate further.

Bit of a refresher on the Digicel acquisition

The Australian federal government originally approached Telstra on 19 July, on the basis Telstra would “provide technical advice” on the acquisition of Digicel.

Telstra views the Pacific telco company, owned by an Irish billionaire, as “an attractive asset”.

As a result, speculative reports hint at a deal between the pair of approximately $2 billion to complete the transaction. The government’s portion is rumoured to be around $1.5 billion of that total.

Penn has stated in the past Telstra would only participate “as a minor portion of the transaction”, and that the government “has its own interests” in Digicel.

Digicel itself is a telecommunications company that owns the majority of 3G and 4G mobile networks across the Pacific.

The government seeks to purchase Digicel to compete with Chinese telecommunications infrastructure, which already has a strong presence in the region.

What’s the latest in the Digicel saga?

Penn has weighed in on the debate again, adding additional flavour on the transaction in Telstra’s FY21 earnings report.

According to Penn, the transaction will be contingent on “meet(ing) certain financial parameters”, in particular, Telstra’s stake “being the minor economic portion” in the deal.

Moreover, Penn stated ongoing discussions are still “incomplete” and there is doubt on the transaction going ahead in the first place.

Furthermore, the company “would own Digicel Pacific”, albeit maintaining a low-risk exposure “with appropriate risk projections”.

Should the deal close, Telstra would consolidate Digicel in its own financial results, as per the release.

Telstra will only go ahead with the acquisition “if it is in the best interests of (its) shareholders”, a point reinstated by both the CEO and chair.

In addition, the government is seeking to purchase Digicel to “block any Chinese transaction”, with “speculation the government has concerns over Chinese interests gaining a dominant position in pacific telco markets”, according to The Australian yesterday.

However, this posture has “led to concerns the government could overpay for the asset, as a result of a faux bidding war with China”, The Australian reports.

Telstra share price snapshot

The Telstra share price has posted a year-to-date return of 34%, extending the previous 12 month’s gain of 28%.

These results have outpaced the S&P/ASX 200 Index (ASX: XJO)’s climb of around 25% over the past year.

The post Telstra (ASX:TLS) share of Digicel acquisition must be a minority — CEO appeared first on The Motley Fool Australia.

More reading

• Top brokers give their verdict on the Telstra (ASX:TLS) share price
• 5 things to watch on the ASX 200 on Friday
• ASX 200 edges higher, Telstra climbs, NAB up
• The ASX reporting wrap-up: Telstra, AGL Energy, Downer
• Here are the 3 most heavily traded ASX 200 shares this Thursday

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

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