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Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares edged lower on opening. At the time of writing, the ANZ share price is down 0.77% to $28.49. Comparatively, the S&P/ASX 200 Index (ASX: XJO) is down 0.29% at the time of writing.

Below we look at the details of the bank’s $1 billion capital raising plans.

How will the bank raise $1 billion?

ANZ shares are edging lower after the big 4 bank announced its intention to raise $1 billion in new tier 1 capital.

The company will raise the funds via its new ANZ Capital Notes 6 (CN6), saying it has the ability to raise more or less than $1 billion.

Under a reinvestment offer, investors holding existing ANZ Capital Notes 1 (CN1) can apply to sell some or all of those holdings. Furthermore, this will then be reinvested into the new CN6 notes. The CN1 notes were issued in August 2013.

Current holders of ANZ shares who wish to participate in the new CN6 offer or the reinvestment offer are looking at a closing date of 30 June.

The company points out that, “ANZ Capital Notes 6 are complex, involve increased risks compared to other less risky and less complex bank investments such as deposits and may not be suitable for all investors.”

The bank said it expects the offer to open on 9 June. It will use the newly raised funds both for general corporate purposes and refinance CN1.

ANZ shares snapshot

ANZ shares first listed in Australia way back in 1969. These days the bank counts amongst the largest listed companies on the ASX 200. The company also has a market cap of $81.7 billion.

ANZ shares are also well known for providing a reliable dividend stream. At the current price of $28.49 per share, the bank pays an annual dividend yield of 3.68%, fully franked. 

Atop dividends, shareholders have also enjoyed some outperforming capital gains over the past year. This is due to ANZ shares being up 59% over the past 12 months. By comparison, the ASX 200 has gained 23% over that same time.

Year-to-date ANZ shares are up 25%. 

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The post ANZ (ASX:ANZ) shares in focus on $1 billion raising announcement appeared first on The Motley Fool Australia.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Moderna‘s (NASDAQ: MRNA) vaccine is successfully helping people avoid the coronavirus. The billion-dollar product has demonstrated more than 90% efficacy in adults. And new data show it’s 100% effective in teens. But Moderna faces one big challenge that could wreak havoc on how well its vaccine protects the population. And that’s the rapid emergence of variants.

The vaccine has handled them so far. Moderna even says one of its booster candidates may be ready by fall. One of the candidates specifically targets the South African variant. But the biotech company realizes it can’t constantly chase the next variant. It has to stay a step ahead. Let’s take a closer look at how Moderna plans to do that — and what it means for investors.

Investing “intensively”

Moderna gave us a hint a few weeks ago. During the company’s earnings call, CEO Stephane Bancel emphasized Moderna’s commitment to artificial intelligence (AI). He said the company planned on investing “intensively” in AI, automation, and digital over the coming five to 10 years.

Fast forward a few weeks to the company’s annual Science Day. Here, Moderna said one major way to stay ahead of variants involves AI and machine learning. They help predict strains that may “escape” protection provided by current vaccines. Based on this, Moderna will be able to create next-generation vaccines and boosters before need becomes critical.

Researchers worldwide have made available on a database more than one million genome sequences of SARS-CoV-2 since the virus emerged. Moderna uses a special app to quickly review sequences as soon as they appear. The company then selects variants to explore in-depth.

From here, Moderna examines the situation from various angles and using various tools. Researchers look at the prevalence of particular variants over time by location. They use structural mapping of neutralizing antibody contact sites to determine where “escape” from protection is likely to happen. And they perform deep mutational scanning on a library of mutations. This helps scientists understand the possible mutations available to a virus so that it may continue to progress and infect. Moderna also examines sequencing information from coronavirus infections that may occur in its clinical trials or out in the real world.

Tomorrow’s coronavirus

All of this is key for one big reason: The coronavirus we’re fighting today may not be the same as the one we’ll fight a year from now. We’ve seen a steady emergence in variants over the past several months. It’s possible that will continue. To maintain leadership, companies must be able to address new variants before they gain ground.

Moderna is a leader now. The company is set to generate $19.2 billion in product revenue this year according to advance purchase agreements. And the potential availability of a booster this fall may get the ball rolling when it comes to handling variants. But what makes me even more confident about Moderna’s prospects in the coronavirus space are the efforts to stay ahead of the variants rather than chase them.

Of course, rivals are working to handle variants too. Pfizer is testing a variant-specific vaccine and expects to report data this summer. Smaller rival Inovio Pharmaceuticals is investigating a “pan-COVID” vaccine to handle all variants — the company expects to start a clinical trial this year.

But here are two reasons why that shouldn’t worry Moderna investors. First, considering the worldwide need for vaccination, there is room for more than one player to generate billions annually in this space. And second, from a timeline and technology perspective, Moderna seems to be ahead of the pack right now. So, Moderna has a good chance of becoming a leader when it comes to handling variants.

All of this means Moderna’s nearly 180% share price gain over the past year isn’t the end of the story. It’s probably just the beginning. It’s important to remember that the stock is trading at only seven times forward earnings estimates. And it’s trading at 26 times sales.

MRNA PE Ratio (Forward) data by YCharts

Considering these numbers and the points I mention above, Moderna shares aren’t expensive at these levels. The good news for Moderna investors and potential investors? It’s not too late to get in on shares of this biotech company — and reap rewards over the long term.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Starpharma Holdings Limited (ASX: SPL) share price is pushing higher on Tuesday morning.

At the time of writing, the dendrimer products developer’s shares are up over 2% to $1.84.

This latest gain means the Starpharma share price is now up almost 20% year to date.

Why is the Starpharma share price pushing higher?

Investors have been bidding the Starpharma share price higher on Tuesday following the release of a positive announcement relating to SPL7013. This is the active in its Viraleze antiviral nasal spray.

According to the release, new data confirms that SPL7013 has potent antiviral activity against the UK COVID-19 variant in laboratory studies, achieving more than 98% reduction in infectious virus in antiviral assays.

The release explains that the antiviral testing of SPL7013 was conducted in the laboratory of virologist Professor Philippe Gallay at The Scripps Research Institute in the United States. Previous studies at the same laboratory have demonstrated the same level of antiviral activity of SPL7013 against the US strain of COVID-19.

Management notes that this indicates that there is no loss of potency for SPL7013 against the UK variant compared with earlier strains of the virus. This is thought to be due to its mechanism of action, which is not reliant on specific binding sites within the spike protein.

The active in Viraleze acts by blocking the interaction between the SARS-CoV-2 viral spikes and the human cells the virus is seeking to infect. It feels the lack of reliance on specific binding sites within the spike protein could represent a key advantage for the breadth of activity of SPL7013 against multiple variants

Overall, it feels the broad-spectrum antiviral activity of Viraleze is a compelling feature for the product to be used alongside other prevention strategies and complementary to vaccines. This is particularly the case as health authorities respond to the emergence of new SARS-CoV-2 coronavirus variants.

Starpharma’s CEO, Dr Jackie Fairley, commented: “Given the constantly evolving public health challenges presented by SARS-CoV-2 variants, we are delighted to see that Viraleze retains potent activity against the important UK variant. SPL7013 has consistently shown high levels of antiviral activity, not only against multiple COVID-19 variants, but also against a broad spectrum of other respiratory viruses, including influenza, making Viraleze an ideal product to use alongside vaccines and other measures.”

Starpharma is pursuing avenues to provide rapid access to Viraleze in a number of countries where outbreaks have occurred. It is also exploring expedited registration where applicable and progressing other regulatory activities for a number of markets, including Australia.

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The Infomedia Limited (ASX: IFM) share price is on the rise in early morning trade. This comes after the company provided an update on its SimplePart acquisition, and FY21 guidance.

At the time of writing, Infomedia shares are up 8.86% to $1.48.

Business update and FY21 guidance

Investors are pushing Infomedia shares higher following the company’s positive announcement.

According to this morning’s release, Infomedia advised it has completed the acquisition of United States-based e-commerce platform, SimplePart.

Infomedia’s CEO, Mr Jonathan Rubinsztein commented:

We are delighted to officially welcome SimplePart into the Infomedia family. Our respective teams have started to engage and identify opportunities to leverage existing relationships in the Americas and elsewhere.

SimplePart is a strategic extension of Infomedia’s core global offering and uniquely positions us to offer our customers an expanded range of market leading business-to-business and business-to-consumer parts, service and data insights solutions.

The procurement which was finalised towards the end of the 2021 financial year, is not expected to contribute materially to Infomedia.

Infomedia indicated that its core parts and service Software-as-a-Service (SaaS) platform has seen an uptick since December, particularly this quarter. While COVID-19 has somewhat impacted the business, FY21 revenue is projected to come between $95 million and $96 million. In addition, cash earnings before interest, tax, depreciation, and amortisation (EBITDA) are expected to be around $19 million and $20 million.

Infomedia noted that growth in organic monthly recurring revenue coupled with SimplePart revenue will lead to strong momentum for FY22.

The company is scheduled to release its full-year results on 24 August, 2021.

About the Infomedia share price

Over the past 12 months, Infomedia shares have lost roughly 15%, with year-to-date performance down by 30%. The company’s share price reached a 52-week high of $2.02 in late December, before sinking on its half-year results.

Infomedia presides a market capitalisation of about $509 million, with approximately 375 million shares on issue.

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The BHP Group Ltd (ASX: BHP) share price hit a new record all-time high of $51.82 on 10 May.

But instead of it being smooth sailing at record highs, its shares experienced a sharp 10.60% pullback to a low of $46.34 by 26 May. By the end of the month, its shares had delivered an unfortunate flat month-on-month gain.

Why was May such a bipolar month for the BHP share price?

May seemed like a tug-of-war between record high iron ore prices and China’s policies against “unreasonable” commodity prices.

Looking back, it might have felt like iron ore prices had topped in April. Factors such China’s infrastructure stimulus easing and an anticipated improvement in Brazil’s iron ore output could see the supply demand pendulum shift closer to equilibrium.

But against all odds, iron ore staged yet another rally to break above US$200/tonne for the first time on record. This unexpected move up was arguably the catalyst behind the BHP share price hitting new all-time record high.

But just as things started to get even more euphoric for BHP shares, China issued a number of statements including plans to increase domestic iron ore production, strength its domestic management of commodities and summoned major producers, urging them to safeguard price stability.

While iron ore spot prices have remained above US$200, Chinese iron ore futures contracts on the Dalian Commodity Exchange fell from as high as 1,300 yuan (US$204) to lows of 1,000 yuan (~US$156). Prices have since rebounded to 1,100 yuan (~US$172) levels.

Despite spot prices standing firm above US$200 per tonne, the dive in Chinese iron ore futures contracts could be a reason why BHP shares retreated so quickly from record highs. It might be worth keeping an eye out for any continued divergence in Chinese iron ore futures prices, and if any weakness spills over into spot markets.

With that said, the BHP share price is still 11.10% higher year-to-date, alongside a generous 5.80% dividend yield.

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The post Falling from record highs, why the BHP (ASX:BHP) share price couldn’t keep it together in May appeared first on The Motley Fool Australia.

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The Woolworths Group Ltd (ASX: WOW) share price is trading lower on Tuesday despite the release of an announcement.

At the time of writing, the retail conglomerate’s shares are down 1% to $41.20.

What did Woolworths announce?

The Woolworths share price is under pressure today despite announcing the successful completion of its Quantium transaction this morning.

According to the release, this transaction has strengthened its partnership with the data science and advanced analytics business, increasing its shareholding from 47% to 75%. Woolworths paid $223 million for the additional stake.

What is Quantium?

Quantium is a world-class data science and advanced analytics business that has been helping Woolworths and its supplier partners to make customer-first decisions across pricing, ranging, and promotions.

It has been growing exponentially in Australia and internationally since Woolworths’ original investment back in 2013.

Why did Woolworths increase its stake?

Woolworths’ CEO, Brad Banducci, believes that advanced analytics is becoming incredibly important for businesses and expects Quantium to help unlock value.

Commenting on the investment in April, Mr Banducci said: “Advanced analytics is key to improving the experiences, ranges and services we provide to our customers and the support we provide to our teams and suppliers. The way we gather data, interpret it, and protect it, is becoming ever more important.”

“Through this transaction, we aspire to bring together Quantium’s advanced analytics capability and Woolworths Group’s retail capabilities to unlock value across our entire retail ecosystem. By working better together, we aim to transform the rapidly evolving retail sector, helping us better service our customers and support our team and supplier partners,” he added.

Quantium will now form part of Woolworths Group, and a new business unit called Q-Retail is being established. Q-Retail will bring together Quantium and Woolworths Group’s collective data science and advanced analytics capabilities with a focus on delivering against the company’s advanced analytics aspirations.

The Woolworths share price is up 18% over the last 12 months.

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The Australian dollar is expected to surge in the current half and that will create winners and losers among ASX shares.

The Aussie battler spent most of the first half of 2021 stuck between US76 and US78 cents. But several experts believe it’s set to breakout and test the US80 cent mark.

If our dollar does reach the psychologically important US80 cent-mark, it is unlikely to stop there. And the dramatic rise the currency will have far reaching implications for the S&P/ASX 200 Index (Index:^AXJO).

What’s holding the Australian dollar back?

The only caveat is that forecasting currency movements is one of the most challenging tasks for experts. Nonetheless, those who spoke with the Australian Financial Review believe the Aussie is significantly undervalued.

Their optimism is based on surging commodity prices. This usually lifts the Aussie, but Australia’s slow rollout of mass COVID-19 vaccinations has been blamed for our dollar’s underperformance.

Economic activity in other developed nations that have vaccinated a large proportion of their population have recovered strongly, according to Commonwealth Bank of Australia (ASX: CBA).

“The Aussie dollar has been range-trading around US77.5¢ for quite some time. A headwind has been the slow vaccination rollout compared to other developed economies,” the AFR quoted CBA’s currency strategist Kim Mundy.

“There was a very quick rollout in the US, UK and eurozone whereas Australia has really lagged, so that explains why the dollar has been stuck recently.”

Why the Aussie could surge past US80 cents in 2H21

But the Aussie will soon play catch-up with fundamentals. The bank is tipping the exchange rate to hit US83 cents by end of September before easing back to US81 cents by end of the calendar year as some of the steam comes out of the commodities supercycle.

CBA isn’t the only bank with a bullish Aussie dollar forecast. The National Australia Bank Ltd. (ASX: NAB) also believes that the Aussie will test US80 cents in the near-term before spending the latter half of 2021 above that level.

ASX shares that are negatively affected by the rising Aussie

A big rally in our dollar will weigh on a number of ASX 200 shares. Citigroup highlighted the Treasury Wine Estates Ltd (ASX: TWE) share price, Computershare Ltd (ASX: CPU) share price, Champion Iron Ltd (ASX: CIA) share price and Pilbara Minerals Ltd (ASX: PLS) share price as being negatively correlated to the rising Aussie.

It’s not all bad news though. The stronger Aussie could actually keep the ASX bull market going as it will dampen the effects of inflation.

Benefits of a strong exchange rate

The fear of rising prices is causing global equity markets to sputter. A stronger currency means that prices may not need to increase quite as fast here as we get a bigger bang for our buck.

Of course, ASX shares that import goods and pay in US dollars will also benefit from any re-rating in the Aussie dollar. These are mostly ASX small cap shares.

The key point here is that a surging Australian dollar in itself doesn’t necessarily spell gloom and doom for our bull market. But astute investors always have an eye on the exchange rate as this could affect their share allocation decision.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon (NASDAQ: AMZN) made its second multibillion-dollar investment in streaming content of the year with the acquisition of MGM Studios for $8.45 billion. The deal follows Amazon’s renewed partnership with the NFL for exclusive rights to an expanded Thursday Night Football schedule, starting with the 2022 season, which will cost about $1 billion per year.

After spending $11 billion on content across its Prime Video, Prime Music, and transactional video-on-demand service in 2020, Amazon’s quickly catching up to the industry giants like Netflix and Walt Disney. It’s all part of a strategy to transform Prime Video from a Prime add on to a must-have streaming service.

What Amazon gets with MGM

MGM brings quite a bit to the table that could help Amazon compete in streaming.

First, it brings production capacity. One of Amazon Studios’ limitations in original films and television was that it only had so many projects it could take on at once. As a result, it’s paying a lot in licensing fees to film studios receiving more bids than ever from streaming services. With MGM, it adds a mini-major film studio and brings on a TV studio that produced nearly 1,000 episodes of television in 2019.

Second, it adds valuable intellectual property (IP) such as James Bond and Rocky. The modern playbook for media companies includes using popular intellectual property to build franchises and expand into new content verticals. Disney has proven extremely adept at leveraging its IP with expansive Marvel and Star Wars universes and tapping the well of classic Disney characters every year with great success.

Amazon’s still searching for an ultra-popular title to draw repeat viewership to its Prime Video service. Netflix seems to have a constant stream of top-tier series debuting on its service every month.

Amazon will come out with an ultra-expensive series based on Lord of the Rings, but it’s a lot easier and less expensive to make series based on IP that the company owns. Using MGM’s characters could help produce another hit. (Note: Barbara Broccoli’s Eon Productions still co-owns James Bond with MGM, and Broccoli has been hesitant to greenlight TV series based on the characters.)

Finally, Amazon will gain access to MGM’s back catalog, which includes 4,000 films and 17,000 television episodes. MGM currently licenses those titles to various streaming services, as well as its own EPIX network.

Amazon will have the option to retain more of that library exclusively as existing deals expire. Priority for MGM’s content may prove extremely valuable in the future, as ongoing media consolidation and more companies offering direct-to-consumer services leave very few studios willing to make exclusive output deals for streaming.

The overall result could be a substantial increase in annual content spending for Amazon as it expands original productions and licenses more content from MGM. That’s on top of the purchase price. But those investments come with the expectation of increased Prime Video engagement.

Building a streaming video destination

The MGM acquisition fits into Amazon’s overall streaming strategy to make Amazon Prime Video a true destination for streaming entertainment. While Amazon managed to attract 175 million of its 200 million Prime members to its streaming service over the last year, the video service is seen as an add-on to the shipping service instead of a means of attracting new subscribers.

Amazon snagged a few high-profile films last year amid theater shutdowns — Borat and Coming 2 America — which attracted strong viewership. Meanwhile, consumers who exhausted Netflix or Disney+ may have decided to see what’s available on Prime Video since they already pay for Prime.

The addition of MGM, the production capacity, IP, and back catalog could help bring viewer-engagement levels with Amazon more in line with the largest competitors in the space. On top of that, millions of football fans will log in every week in the fall, and LOTR (Lord of the Rings) fans could have dozens of hours of new content to binge with a five-season commitment to its massive Tolkien-based series, starting with a 20-episode first season with a budget of $465 million.

The goal is to make Prime Video more of a destination for streaming instead of an afterthought. Not only could increased engagement with Prime Video lead to greater Prime retention rates and more shopping on its online marketplace, but it could also lead to broader adoption of Prime Channels. This would deeper entrench Prime into the home entertainment ecosystem and strengthen its customer relationships.

If it strengthens the appeal of the Fire TV platform, Amazon could benefit from greater ad revenue, as well. That’s what allows Amazon to justify spending as much as media giants like Netflix and Disney: It has more ways to monetize engagement.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Commonwealth Bank of Australia (ASX: CBA) share price made history in May, closing above $100 for the first time on record. Here’s a wrap on the month that was for Australia’s largest bank.

The CBA share price tips higher on third-quarter results

CommBank’s third-quarter results showed that its earnings recovery was gathering pace, with cash net profit after tax sitting at $2.4 billion. To add some perspective, its third quarter net profit slumped to $1.3 billion amidst the COVID-19 induced year of 2020, $1.70 billion in 2019 and $2.35 billion in 2018.

The bank also posted a decline in loan impairment expenses, with a majority of customers transitioning from its COVID-19 temporary loan repayment deferral program.

The price action for CommBank shares on 13 May, the day of its third-quarter results being released, was rather interesting. Its shares opened 0.76% lower to just under $94. Its shares progressively pushed higher throughout the day, before closing 1.06% higher at $95.58.

Economic tailwinds for CBA shares?

Australia’s domestic economic recovery could be tracking ahead of schedule according to the RBA’s May monetary policy meeting.

The minutes observed that:

The Australian economy was transitioning from recovery to expansion earlier and with more momentum than previously anticipated.

This translated into an upgrade in near-term GDP forecasts:

In response to the stronger starting point and improved outlook further out, the forecast for GDP under the baseline scenario had been revised upwards. GDP growth of 4¾ per cent was expected over 2021 and 3½ per cent over 2022. If realised, this would leave the level of GDP a little below that forecast before the pandemic, mostly owing to lower population growth.

Above $100 for the first time

On 28 May, the CBA share price closed above $100 for the first time, at $100.56. This also helped the S&P/ASX 200 Index (ASX: XJO) set a new all-time record high of 7,179.5.

CommBank shares have climbed an extraordinary 11.2% in May, which is impressive given the bank’s sheer size and the typical slow moving nature of banks.

Beyond the face value of the CBA share price, it is positive to see the broader Australian economy recovering at a rate exceeding the RBA’s expectations.

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