The S&P/ASX 200 Index (ASX: XJO) is having a pretty ordinary end to the week and currently is sliding by 0.31% Meanwhile, buy now, pay later operators like Zip Co Ltd (ASX: Z1P) and Afterpay Ltd (ASX: APT) are faring even worse.

At the time of writing, the Zip share price has slumped by 2.48% and Afterpay shares have fallen 1.67%. This follows an overnight sell-off on the tech-heavy Nasdaq but also comes on the heels of news the Reserve Bank of Australia (RBA) is again hinting at the possibility of regulating the BNPL sector.

The news may also be dragging on Commonwealth Bank of Australia (ASX: CBA) shares, currently down 0.68%, after the banking giant recently announced plans to launch its own BNPL offering.

Let’s take a closer look at what the RBA discussed in relation to the BNPL sector.

BNPL companies may be banned from dictating ‘no surcharge’ rules to merchants

In an article published in its Bulletin newsletter yesterday, the RBA reaffirmed it is considering preventing BNPL operators from banning merchants passing on fees to their customers.

Merchant fees, which can be up to 8x more than those charged by credit card providers, cannot be passed onto consumers under the terms of service of most BNPL providers – including Zip and Afterpay. The RBA believes the rules stymie innovation and competition in the sector.

In its article, the Bank provided the example of American Express Company (NYSE: AXP)’s merchant fees having halved over the course of a decade. The article cited the development of increased competition arising from merchants being able to pass on fees to their customers.

Since Zip and Afterpay, among others, don’t charge interest or consumer fees (only late fees), the majority of their operating revenues come via merchant fees.

RBA Governor, Philip Lowe, talked about the issue back in December, saying:

“…BNPL operators in Australia have not yet reached the point where it is clear that the costs arising from the no-surcharge rule outweigh potential benefits in terms of innovation.”

According to the RBA, less than 1% of “the number and value of consumer transactions” in Australia are currently made using BNPL services.

If the RBA were to regulate removal of the ‘no surcharge’ rule, research by the Bank suggests around 50% of consumers would switch to an alternative form of payment. According to the RBA, 10% of consumers stated they would cancel the purchase.

However, the RBA is having active discussions internally and with key stakeholders (such as Zip and Afterpay) about what criteria or thresholds would be appropriate for applying the no-surcharge ban.

Zip, Afterpay, and CommBank share price snapshots

The Zip share price has rocketed over the past year. Despite having fallen lower recently, from 12 months ago until now, shares in the company have increased by more than 600%. However, Zip shares have lost 43% of their value since hitting their 52-week high last month.

Afterpay shares, too, have been a dream investment for some over the year. Exactly one year ago, the Afterpay share price was sitting at $9.90. Today’s valuation represents a 1,000% return on investment. Yet, just like the Zip share price, Afterpay has been trending lower in 2021. Year to date, the company has lost over 8% of its value.

CommBank, which is making an aggressive push into the BNPL space, has seen relatively modest gains over the past year compared to Zip and Afterpay. Its share price is ‘only’ 40% higher compared to this time last year. Unlike Zip and Afterpay, however, the CommBank share price has only fallen 4.8% down from its 52-week high.

The market capitalisations of Zip, Afterpay and CommBank are $4.7 billion, $31.7 billion, and $152.1 billion respectively.

More reading

• Brokers name 3 ASX shares to buy right now
• ASX tech shares: A once-in-a-lifetime buying opportunity?
• ASX 200 down 0.3%: Afterpay & Zip lower, AGL signs Portland Smelter deal
• Why the Afterpay (ASX:APT) share price may be under pressure today
• Here’s why the Zip (ASX:Z1P) share price is now down 44% from its high

Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Zip (ASX:Z1P) and other BNPL shares face looming prospect of regulation appeared first on The Motley Fool Australia.

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

Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Afterpay Ltd (ASX: APT)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $159.00 price target on this payments company’s shares. This follows news that Commonwealth Bank of Australia (ASX: CBA) is launching a buy now pay later product that will come with much lower fees for merchants. Morgan Stanley doesn’t appear concerned due to its belief that Afterpay has developed a moat thanks to its sales referrals and global brand. Furthermore, the broker notes that CBA’s offering is limited only to eligible customers, unlike Afterpay’s platform. The Afterpay share price is currently trading at $108.94.

Insurance Australia Group Ltd (ASX: IAG)

A note out of UBS reveals that its analysts have retained their buy rating and $6.00 price target on this insurance giant’s shares. UBS has been busy looking into the company’s margins and believes that they may now have bottomed. The broker expects improvements in the coming quarters. It also suspects that there could even be upside risk to margins if IAG successfully delivers its ongoing initiatives. The IAG share price is fetching $4.87 on Friday afternoon.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Analysts at Goldman Sachs have retained their buy rating and $6.73 price target on this airport operator’s shares. According to the note, the broker was pleased to see a big improvement in passenger volumes during February after a slowdown in January driven by border restrictions. Looking ahead, the broker believes the company will be a major beneficiary of the Australian domestic inoculation strategy. The Sydney Airport share price is trading at $6.22 on Friday.

More reading

• ASX tech shares: A once-in-a-lifetime buying opportunity?
• ASX 200 down 0.3%: Afterpay & Zip lower, AGL signs Portland Smelter deal
• Shocking new numbers reveal Sydney Airport (ASX:SYD) share price resilience
• Why the Afterpay (ASX:APT) share price may be under pressure today
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Brokers name 3 ASX shares to buy right now appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3qWt381

Australian investors woke up this morning to yet another night of carnage on the US markets. Although, at first glance, it doesn’t look that bad. The Dow Jones Industrial Average (INDEXDJX: .DJI) was only down 0.46% last night, after all. That’s a pretty routine kind of movement.

But it was the tech sector that once again copped the brunt of the falls on the US markets overnight. Even though the Dow was ‘only down 0.46%, the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) fell a far more substantial 3.02% last night.

That saw favourite US tech shares like Amazon.com Inc (NASDAQ: AMZN), Netflix Inc (NASDAQ: NFLX) and Tesla Inc (NASDAQ: TSLA)  fall 3.44%, 3.75% and 6.93%, respectively. Ouch.

Once again, the catalyst for these moves appears to be rising US government bond yields. As we’ve discussed before, rising bond yields hurt tech shares especially hard because it reduces the appeal of companies with less cash flow certainty.

In contrast, US blue-chip shares like Procter & Gamble Co (NYSE: PG), Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) and Bank of America Corp (NYSE: BAC) actually rose last night. Since these companies can deliver cash flow today (rather than hope to in the future), they are suddenly more appealing. That’s just the way these things work.

We saw this paradigm reflected on the ASX this morning as well. ASX tech shares like Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO) and Zip Co Ltd (ASX: Z1P) open sharply lower.

But could this be a once-in-a-lifetime buying opportunity? Most of us would be used to the sight of tech share rising by now. That’s what they have seemingly done over the past few years, after all.

Well, that might be true. It all hinges on one dynamic – the bond markets have to be wrong, and the Reserve Bank of Australia (RBA) right.

Tech shares vs bonds

Let me explain.

What the bond markets are doing right now is pricing in future inflation and future interest rate rises in response. If the RBA and the US Federal Reserve raise rates, it automatically raises the government bond yield. The markets are just pricing this in ahead of time.

According to a report from the Australian Financial Review (AFR) this morning, 10-year US Treasury bonds spiked to their highest yield in 14 months yesterday.

And yet, both the US Fed and the RBA are emphatically telling investors that this isn’t what they are anticipating. The AFR report notes that Fed chair Jerome Powell this week told investors that the “strong bulk” of the Fed’s committee does not expect rates to rise until at least 2024.

Our own RBA governor Philip Lowe has also said as much.

So someone’s right, and someone’s wrong here. The only question is who. If it’s the RBA and the Fed that is right, then the bond markets are overreacting.

And that means, by extension, that investors are overreacting by selling US and ASX tech shares off. That could well mean this is a once-in-a-lifetime buying opportunity in the ASX tech space. Something to keep in mind!

More reading

• ASX 200 down 0.3%: Afterpay & Zip lower, AGL signs Portland Smelter deal
• Why Tesla stock fell sharply on Thursday
• Why the Afterpay (ASX:APT) share price may be under pressure today
• Why are the Nasdaq’s highest-growth stocks panicking about a strong economy?
• Here’s why the Zip (ASX:Z1P) share price is now down 44% from its high

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Procter & Gamble and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Berkshire Hathaway (B shares), Netflix, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO and recommends the following options: short March 2021 $225 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), long January 2022 $1920 calls on Amazon, short January 2022 $1940 calls on Amazon, and long January 2023 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia owns shares of AFTERPAY T FPO and Xero. The Motley Fool Australia has recommended Amazon, Berkshire Hathaway (B shares), and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX tech shares: A once-in-a-lifetime buying opportunity? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3qUt3FK

The Race Oncology Ltd (ASX: RAC) share price is sliding today, despite the announcement of a new preclinical study by the specialty pharmaceutical company. At the time of writing, shares are down 0.5% to $3.98.

Race Oncology share price unfazed by Bisantrene study

Race Oncology focuses on the development of cancer-targeting drugs in an effort towards better outcomes. The company’s flagship drug is Bisantrene, a small molecule inhibitor of the fat mass and obesity-associated (FTO) protein. A link between FTO and a range of cancers has led Race to investigate Bisantrene further.

According to the release, Race has now entered into an agreement with The University of Newcastle to explore the use of Bisantrene as a novel FTO-directed treatment for melanoma. The preclinical research program is designed to identify drug combinations that improve existing melanoma treatment.

Renowned melanoma researchers Professor Xu Dong Zhang and Associate Professor Lei Jin will run the project. Another focus of the study will be improving drugs for treatment-resistant cancer patients.

The results of this newly announced program will support phase 2 human trials. These studies of Bisantrene in humans are scheduled for commencement in Australia in early 2022. Meanwhile, The University of Newcastle will commence its study immediately with findings expected during the next 12 months.

Chief scientific officer commentary

Race’s chief scientific officer Dr Danial Tillet commented on the study:

This is an exciting development for Race and we are looking forward to collaborating with Prof Zhang and Jin on this transformational project. Recent scientific developments have identified Bisantrene as a potent targeted agent of FTO which offers the possibility of novel treatment options for patients with drug resistant melanomas that can rapidly be translated into the clinic.

Professor Xu Dong Zhang brings 15 years of experience searching for a cure for metastatic melanoma to the research team. Additionally, Professor Lei Jin provides immense knowledge on overcoming resistance mechanisms of melanoma cells to chemotherapy.

Race has been busy

Impressively, today’s announcement is mere weeks after the company reported preclinical breast cancer results. Race found that Bisantrene could kill some breast cancer cells resistant to other existing treatments. Even more significant, when used in conjunction with existing treatments it exemplified near-identical additive benefits. 

The company continues to expand upon studies for the types of cancer that Bisantrene may be able to treat. 

At the time of writing, accounting for the current Race Oncology share price, the comany now has a market capitalisation of $541 million.

More reading

• Race Oncology (ASX: RAC) share price higher on preclinical breast cancer results
• Subreddit ASX Bets is gambling these 4 ASX shares will follow in GameStop’s footsteps
• Up 61% in 2021, why the Race Oncology (ASX:RAC) share price is marching higher again

Motley Fool contributor Mitchell Lawler 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.

The post Race Oncology (ASX:RAC) share price slides on a new melanoma preclinical study appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3cNaT3F

Blue Energy Limited (ASX: BLU) shares have been among the best performers on the ASX this morning, rocketing by as much as 44% in early trade. This comes after the company announced a Heads of Agreement (HOA) with Origin Energy Ltd (ASX: ORG).

Since leaping to an intraday high of 11 cents soon after market open, some quick profit taking has seen the energy producer’s shares retreat to 9.1 cents apiece, up 19.74%.

What’s driving the Blue Energy share price?

Investors were scrambling to get a hold of Blue Energy shares after the company provided a positive update to the market.

According to its release, Blue Energy has executed a non-binding HOA with Origin Energy for the supply of up to 300 petajoules of gas at Wallumbilla, Queensland. One petajoule is equivalent to 278 gigawatt hours, or enough energy to power 19,000 homes for a year.

Under the agreement, the gas will flow from Blue Energy’s Northern Bowen Basin ATP814 coal seam gas tenure. The contract will commence in 2024 and run for a period of ten years, providing 20 to 30 petajoules annually.

This is the second HOA involving supplying gas to the east coast domestic market implemented by the company. In early December, a similar deal was signed between Blue Energy and EnergyAustralia to deliver 100 petajoules of gas from the North Bowen basin into Wallumbilla.

Blue Energy hopes that the latest agreement will help push forward plans for a new gas pipeline between the two sites. The Queensland Government is behind a pre-feasibility study to connect the gas reserves for domestic consumption and exports.

The company’s wholly-owned permit, ATP814, around Moranbah, has been evaluated by Netherland Sewell and Associates (NSAI) to hold 3,248 petajoules of contingent resource. Furthermore, Blue Energy stated there are 71 petajoules of 2 petajoules reserves and 298 petajoules of 3 petajoules reserves nearby. This is considered to be in close proximity to the existing gas field infrastructure in the North Bowen Basin.

Management commentary

Blue Energy managing director John Phillips touched on the North Bowen Basin, saying:

The momentum for development of the North Bowen Basin gas resource for domestic east coast gas consumers continues to build, following the high grading of this significant gas resource by both Federal and State Governments. This prioritisation continues to give east coast gas buyers the confidence to secure long term gas supply agreements from this producing gas basin.

The Blue Energy share price has accelerated by 355% over the past 12 months but by only around 4% year to date.

More reading

• Goldman reaffirms its conviction buy on this ASX share on Yallourn shutdown
• Early Yallourn power station closure sets the pace for ASX energy sector shakeup
• ASX energy shares are booming as OPEC cuts production

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.

The post Why the Blue Energy (ASX:BLU) share price rocketed 44% this morning appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3r7fRxu

Paladin Energy Ltd (ASX: PDN) today announced the successful completion of its placement and institutional entitlement offer to raise $192.5 million at 37 cents per new share.

This will be followed by a fully underwritten retail entitlement offer to raise a further A$26.2 million. The Paladin share price opened 15% lower today at 39.5 cents to reflect the discount and is currently trading at 40 cents. 

Transformational capital raise for Paladin Energy 

According to its release, Paladin will use the capital raise proceeds to repay $208.2 million of senior notes, accrued interest and redemption fees. This includes removing its legacy corporate debt overhang as US$115 million in secured notes and accrued interest fall due on January 2023. 

The company believes this move will stop the value transfer from its equity holders to debt holders through the high ‘payment in kind’ coupon interest rate of 10%. 

With most of the debt behind the company, it hopes to restart funding for its Langer Heinrich mine in Namibia. The project began producing uranium back in 2007 with a peak production of 5.6 million lbs in 2014 before operations were suspended due to low uranium prices in 2018. 

Uranium prices were as high as ~US$130/lb back in 2007 before plunging to around the mid US$20/lb mark between 2016 to 2019. Prices have rebounded in recent months to US$30 lb. The recent resurgence in the Paladin share price reflects the rebound in uranium prices and the company’s plans moving forward. 

The improvement in the uranium market translated to a Mine Restart Plan from Paladin back in June 2020. This aims to bring Langer Heinrich back into production with targeted investment to maximise its reliability and runtime. 

The company estimates that US$81 million will be needed to restart its operations. The company believes the mine will have a life of 17 years and a cost of production of ~US$27/lb.

Paladin believes that the uranium market will shift into a supply deficit in the short to medium term as demand will outpace current supply.

More reading

• Why the Paladin (ASX:PDN) share price is in a trading halt today
• Why ASX uranium shares could run even hotter in 2021

Motley Fool contributor Kerry Sun 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.

The post The Paladin (ASX:PDN) share price dives 15% on capital raising appeared first on The Motley Fool Australia.

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

The Musgrave Minerals Ltd (ASX: MGV) share price is charging higher, up 9% in early afternoon trade.

Below we take a look at the ASX gold miner’s latest drill results.

What drill results did Musgrave Minerals report?

Musgrave Minerals shares are surging after the company reported additional high grade gold assay results from the reverse circulation (RC) drilling program at its New White Heat Prospect.

The White Heat prospect is situated on Musgrave’s wholly owned Cue Gold Project in Western Australia.

The company highlighted the following results from 3 of the RC drill holes:

• 11m at 19.6g/t Au from 48m (21MORC039) including: 2m at 94.0 g/t Au from 48m
• 21m at 7.4g/t Au from 64m (21MORC040) including: 1m at 35.9g/t Au from 64m; and 12m at 9.9g/t Au from 73m including: 1m at 84.5g/t Au from 83m
• 2m at 6.5g/t Au from 134m (21MORC041)

Commenting on the drill results, Musgrave Managing Director Rob Waugh said:

These high-grade, near surface gold results from White Heat further highlight the discovery potential of the project. Exploration is continuing to deliver strong results and add value for our shareholders. Drilling will resume at White Heat in a few weeks as we continue to define the limits and plunge of the mineralisation.

At a regional level, we are continuing to drill to better define the new gold corridor 800 metres west of Lena that is continuing to produce high-grade gold results in previously undrilled areas.

Waugh added that investors can expect regular news from the continuing test drilling over the coming months.

Musgrave Minerals share price snapshot

Musgrave Minerals shareholders have been well rewarded over the past 12 months, with shares up 375%. That compares to a gain of 45% on the All Ordinaries Index (ASX: XAO).

Year-to-date, the Musgrave Minerals’ share price is flat.

More reading

• The Paladin (ASX:PDN) share price dives 15% on capital raising
• The iCandy (ASX:ICI) share price is up today. Here’s why
• ASX 200 down 0.3%: Afterpay & Zip lower, AGL signs Portland Smelter deal
• The Cimic (ASX:CIM) share price slides despite new contracts
• Spacetalk (ASX:SPA) share price surges 77% on Telstra deal

Motley Fool contributor Bernd Struben 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.

The post Why the Musgrave Minerals (ASX:MGV) share price is charging 9% higher appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/30ZKaeN

The iCandy Interactive Limited (ASX: ICI) share price is up by 4% at the time of writing, after the company shared news of an acquisition.

The games and digital entertainment company has purchased hyper-casual mobile gaming platform NextGamer.

Let’s look closer at iCandy’s announcement. 

The next big thing

Singapore-based company NextGamer creates easy-to-master mobile games, taking no longer than 2–3 minutes per game. It profits off of in-game purchases and advertising. The company creates both web and mobile-based games, allowing players to enter into casual gaming tournaments online.

Hyper-casual gaming is that which is simple, easy to play, and takes a very short time to complete.

iCandy stated in this morning’s announcement that multiple sources claim hyper-casual mobile gaming is an up-and-coming trend in gaming. It noted reports that hyper-casual games recorded the most downloads in the first half of 2020.

NextGamer will have the ability to match gamers against one another for competitive gaming, iCandy stated.

iCandy has acquired 100% of NextGamer’s voting shares. The purchase cost iCandy $1.29 million, of which $900,000 was paid for in cash and the rest in iCandy shares, valued at 13 cents each.

The company states its new acquisition will take cue from iCandy’s library of more than 300 game titles.

Commentary from management

iCandy’s Chairman, Kin W Lau, commented:

We are really excited at the prospect of hypercasual gaming, and NextGamer has a unique proposition that offers very short game sessions on the go to mobile gamers via a casual competitive gaming environment.

iCandy has extensive expertise in casual mobile games and we can market NextGamer’s games to our large audience of mobile gamers internationally. 

iCandy share price snapshot

After announcing its new acquisition, iCandy shares are up 4.35% to 12 cents.

The iCandy share price is up 1,100% over the last 12 months but is down by 14.29%, year to date.

The company has a market capitalisation of around $65 million with approximately 571 million shares outstanding.

More reading

• The Paladin (ASX:PDN) share price dives 15% on capital raising
• Why the Musgrave Minerals (ASX:MGV) share price is charging 9% higher
• ASX 200 down 0.3%: Afterpay & Zip lower, AGL signs Portland Smelter deal
• The Cimic (ASX:CIM) share price slides despite new contracts
• Spacetalk (ASX:SPA) share price surges 77% on Telstra deal

Motley Fool contributor Brooke Cooper 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.

The post The iCandy (ASX:ICI) share price is up today. Here’s why appeared first on The Motley Fool Australia.

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

At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) is off its intraday low but still trading lower for the day. The benchmark index is currently down 0.3% to 6,726.1 points.

Here’s what is happening on the market today:

Tech shares act as a drag

Australian tech shares including Afterpay Ltd (ASX: APT) and Zip Co Limited (ASX: Z1P) are acting as a drag on the ASX 200 on Friday. This follows a selloff of US tech stocks overnight after bond yields surged to new 14-month highs. Positively, though, with US futures pointing higher, many tech shares are now recovering from their lows for the day.

Fortescue raises US$1.5 billion

The Fortescue Metals Group Limited (ASX: FMG) share price is edging lower today after revealing the successful completion of a US$1.5 billion bond offering. This was more than double what the company was seeking to raise. It upsized the offering due to strong demand. The proceeds will be applied to the repayment of its US$750 million 2022 Senior Unsecured Notes and general corporate purposes. The latter could include the repayment of debt.

AGL Portland Smelter update

The AGL Energy Limited (ASX: AGL) share price is pushing higher today after announcing that it has finalised a new agreement to supply a proportion of the electricity requirement of the Portland Smelter aluminium smelter. The agreement will take effect from 1 August 2021 when the existing supply contract ends and then run until July 2026. The energy company revealed that the new contract is for a volume of 275 MW and represents a mutually beneficial outcome in respect to commercial terms.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the News Corporation (ASX: NWS) share price with a 3% gain on no news. The worst performer has been the Service Stream Limited (ASX: SSM) share price with a 4% decline. Today is the final day that the essential network services company’s shares will be included in the ASX 200. They will be dumped out of the index at Monday’s rebalance.

More reading

• Why AGL, Clover, QBE, & Volpara shares are pushing higher today
• Why the AGL (ASX:AGL) share price is avoiding the market selloff
• Why the Afterpay (ASX:APT) share price may be under pressure today
• ASX weakness could be met with $19bn “dividend bonanza”
• Here’s why the Zip (ASX:Z1P) share price is now down 44% from its high

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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Service Stream Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 down 0.3%: Afterpay & Zip lower, AGL signs Portland Smelter deal appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2ODMs0F

The CIMIC Group Ltd (ASX: CIM) share price is trading lower this morning, down 2.4% at the time of writing. In comparison, the broader S&P/ASX 200 Index (ASX: XJO) is currently trading down 0.31%.

We take a look at the company’s latest contract announcement below.

What new contracts did Cimic announce today?

The Cimic share price is sliding today, despite the company reporting its second major contract win in as many days.

This morning, the ASX 200 construction, mining, and services company revealed that its minerals processing company, Sedgman, and construction company CPB Contractors were awarded 2 new contracts in Queensland. The company expects the combined contracts to generate $100 million in revenue.

QCoal awarded a contract to Sedgman to build a “tailings dewatering facility” at the Byerwen mine.

Meanwhile, the Queensland government awarded Broad Construction (a wholly-owned subsidiary of Cimic’s CPB Contractors) a contract to build additional educational facilities at the Yarrabilba State Secondary College.

What did management say?

Commenting on the new contract awards, Cimic CEO Juan Santamaria said:

CIMIC Group’s companies have a strong history of deliveringconsistent outcomes in Queensland.

We are pleased to continue our long-standing relationships with QCoal to deliver safe and efficient solutions for the industry; and with the Queensland Department of Education to deliver high-quality assets of lasting value that will benefit the local community.

Sedgman managing director Grant Fraser added:

We are pleased to continue working with QCoal with a key focus on reducing impacts and undertaking environmentally responsible practices. The tailings dewatering contract at Byerwen is a great opportunity to achieve joint goals in ESG, an important focus for the industry.

Cimic advised that it would complete both projects in 2022.

Today’s release follows a separate contract announcement yesterday when the company reported the Queensland government had awarded CPB Contractors the construct-only contract to upgrade the Bruce Highway. That contract is expected to generate $289 million, with work forecast to start this year.

Cimic share price snapshot

Over the past 12 months, Cimic shares are up 40%, right in line with the 40% gain on the ASX 200.

Year-to-date, the Cimic share price is down 27%, currently trading at $18.21 per share.

More reading

• ASX 200 drops, Webjet reveals B2B plan, Cimic wins again
• Decmil (ASX:DCG) share price lifts on $25 million contract win
• What’s going on with the Cimic (ASX:CIM) share price today?
• ASX 200 dips, CBA launches BNPL, Fonterra reports
• Cimic (ASX:CIM) share price falls despite positive update

Motley Fool contributor Bernd Struben 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.

The post The Cimic (ASX:CIM) share price slides despite new contracts appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3cN6mOD