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At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) has bounced back from yesterday’s decline and is charging higher. The benchmark index is currently up a sizeable 1.1% to 6,705.9 points.

Here’s what has been happening on the market today:

ANZ annual general meeting.

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is storming higher today following the release of its annual general meeting presentation. At the meeting, the bank’s CEO Shayne Elliott spoke positively about the future. “We have a substantially simpler business that is less focused on dealing with problems and more focused on winning and keeping customers. […] I believe this sets us up to win in the coming years as we help shape a world where the people and communities we serve once again thrive.”

Resolute Mining jumps.

The Resolute Mining Limited (ASX: RSG) share price has racing higher today for a couple of reasons. One is a rebound in the gold price overnight amid optimism that there will be major COVID related stimulus coming soon. The other was news that the gold miner has signed an agreement to sell its Bibiani Gold Mine in Ghana to China’s Chifeng Jilong Gold Mining Co. The two companies have agreed a fee of US$105 million.

Travel shares soar.

It has been a very positive day for Australian travel shares. The likes of Corporate Travel Management Ltd (ASX: CTD), Flight Centre Travel Group Ltd (ASX: FLT), and Webjet Limited (ASX: WEB) are all pushing notably higher today. This follows news that Moderna’s COVID vaccine is likely to be given emergency use approval in the coming days. Another positive development was Aussie company Ellume being granted approval by the US FDA for its at-home COVID test.

Best and worst ASX 200 performers.

The best performer on the ASX 200 today has been the Resolute Mining share price with a 7% gain following its aforementioned asset sale. The worst performer has been the Tassal Group Limited (ASX: TGR) share price with a 4.5% decline. Concerns that China could ban salmon imports from Australia have been weighing on its shares.

More reading

• Why Beacon Lighting, Flight Centre, REX, & Resolute Mining are shooting higher
• The Commonwealth Bank (ASX:CBA) share price is climbing higher today. Here’s why.
• Why the Resolute Mining (ASX:RSG) share price is charging higher today
• The ASX bank with the best dividend yield under APRA’s new guidelines
• Why the Beacon Lighting (ASX:BLX) share price is on watch today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corp Travel Management, Flight Centre, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Uniti Group Ltd (ASX: UWL) share price remains in a temporary trading halt this morning. This follows the company’s announcement it has acquired select fibre-to-the-premises (FTTP) assets owned by Telstra Corporation Ltd (ASX: TLS). The Uniti share price was trading at $1.48 at market close yesterday.

What’s the deal?

In an ASX announcement this morning, Uniti revealed it has entered into a binding agreement to acquire Telstra’s FTTP assets, which provide high speed broadband to the Telstra Velocity estates and South Brisbane Exchange regions (Velocity).

The company said Telstra would become a retail service provider (RSP) of its FTTP business. Following on Uniti’s recent acquisition of OptiComm Ltd, this segment of the company has been rebranded as OptiComm.

The acquisition represents Australia’s second largest private FTTP network, with 65,000 connected premises of which 50,000 are active.

Uniti is paying $140 million for the assets, with $85 million payable upon completion. The acquisition will be funded via a combination of debt, underwritten equity placement and a share purchase plan.

The company forecasts the new assets will contribute $21 million in annual earnings before interest, tax, depreciation and amortisation (EBITDA), starting early January 2021.

What Uniti’s CEO had to say

Commenting on the Velocity acquisition, Uniti CEO Michael Simmons said:

To have secured such a large FTTP network aligned to our core strategy which can be integrated quickly to grow our ‘core plus’ infrastructure earnings is a wonderful way to end what has been a completely transformative year for Uniti Group.

The agreement struck with Telstra for it to become an RSP of our W&I business is perhaps the most significant strategic aspect of this transaction, given the large universe of presently untapped greenfield property opportunities it will enable us to target with Australia’s largest RSP as part of our FTTP offering and associated range of value added services, such as access control, CCTV and perimeter WIFI services.

Uniti share price and company snapshot

Uniti Group provides internet and telecommunication products and services. Formerly Uniti Wireless Limited, the company also focuses on the acquisition and construction of communications infrastructure such as fibre, wireless towers and ground leases. Uniti makes up part of the All Ordinaries Index (ASX: XAO).

After crashing 53% during the February and March COVID-19 market panic, the Uniti share price came charging back, up 90% from its 19 March lows.

More reading

• Why Meteoric Resources (ASX:MEI) share price is soaring 6% higher
• Why the Cardiex (ASX:CDX) share price, up 73% in 2020, is gaining again today
• Why the Immuron (ASX:IMC) share price is rocketing up 10% today
• Here’s why the Zelira (ASX:ZLD) share price just rocketed to a new high
• Why the Botanix (ASX:BOT) share price is soaring up today

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.

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The S&P/ASX 200 Index (ASX: XJO) has followed the lead of US markets and is on course to record a strong gain on Wednesday. In late morning trade the benchmark index is up 1.2% to 6,710.5 points.

Four shares that have climbed more than most today are listed below. Here’s why they are shooting higher:

Beacon Lighting Group Ltd (ASX: BLX)

The Beacon Lighting share price is up over 8% to $1.54 following the release of a trading update. That update revealed that the retailer’s performance has been very strong in the first half of FY 2021. It is expecting to report sales of $147 million to $152 million, up from $122.5 million in the prior corresponding period. It was even better on the bottom line, with Beacon providing half year profit after tax guidance of $19.5 million to $21.5 million. This is more than double the $9.5 million it achieved in the first half of FY 2020.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price has risen 5% to $16.82. A number of travel shares are surging higher today. This may be due to news that US FDA staff have endorsed the emergency use of another COVID-19 vaccine. The regulator endorsed Moderna’s COVID vaccine ahead of a meeting to review its emergency use. This means it could be administered to the public as early as next week if all goes to plan.

Regional Express Holdings Ltd (ASX: REX)

The Regional Express share price has jumped 8% to $2.03. Investors have been buying the regional airline operator’s shares after it was granted the High Capacity Air Operator’s Certificate (HCAOC) by the Civil Aviation Safety Authority (CASA). This means Regional Express can now commence domestic operations between Sydney and Melbourne from 1 March 2021 and thereafter to other major cities.

Resolute Mining Limited (ASX: RSG)

The Resolute share price has stormed 7% higher to 77.5 cents. This has been driven by a rebound in the gold price and news that the gold miner has signed an agreement to sell its Bibiani Gold Mine in Ghana to China’s Chifeng Jilong Gold Mining Co. According to the release, the two parties have agreed a total cash consideration of US$105 million.

More reading

• Why the Regional Express (ASX:REX) share price is soaring 10% higher today
• Why the Resolute Mining (ASX:RSG) share price is charging higher today
• Why the Beacon Lighting (ASX:BLX) share price is on watch today
• Qantas (ASX:QAN) budget flights to exceed pre-COVID levels by March
• Creso Pharma and Nuix were among the most traded shares on the ASX last week

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

Tesla Inc (NASDAQ: TSLA) is facing a serious challenge as it wraps up 2020. But the challenge isn’t necessarily a bad one. Demand for its vehicles is too great.

Vehicle orders currently easily exceed production, Tesla CEO Elon Musk confirmed in a leaked email (via Electrek) to employees last Friday. Despite this high level of demand, investors shouldn’t consider the company’s targeted 181,000-plus deliveries for the final quarter of the year to be totally in the bag yet. To pull off these record deliveries, it comes down to Tesla employees rallying to tackle manufacturing and logistical challenges.

Demand exceeds supply

“We are fortunate to have a high-class problem of demand being quite a bit higher than production this quarter,” Musk said in an email to employees late last week.

The CEO urged employees to quickly respond, helping justify customers’ and investors’ confidence in the company.

“To ensure that we have the best possible outcome and earn the trust of the customers and investors who have placed their faith and hard-earned money with us,” Musk explained, “we need to increase production for the remainder of this quarter as much as possible.”

Musk went on to tell employees to contact him directly if they identify ways to improve vehicle production output.

An old problem

Tesla’s problem of demand regularly exceeding supply is an old one for the company. Indeed, even if demand came close to supply levels in a given quarter in the past, this was likely on purpose. There’s no reason to pull demand levers by spending money on advertising or offering significant discounts when production can only increase so fast. Nevertheless, Tesla hasn’t had to worry much about taking major actions to increase demand, as orders for its vehicles have generally tracked up and to the right.

Sure, Tesla has certainly pulled some demand levers from time to time. For instance, it regularly launches referral programs to boost sales. In addition, the company has repeatedly lowered its vehicle prices as its vehicle costs have come down over the years. But it wouldn’t be fair to say that Tesla has ever had a meaningful demand problem if the company hasn’t participated in any meaningful advertising campaigns — and it hasn’t.

Tesla’s high-class demand problem is a testament to how satisfied its customers are. Demand has generally grown proportionate to the company’s delivery volume in given regions. For every new Tesla on the road, there’s another brand evangelist — and a vehicle that will ultimately serve as many people’s first electric vehicle experience.

Word-of-mouth marketing is particularly important for Tesla since many buyers need to be educated on why electric cars are feasible. Some potential Tesla customers, for instance, may not realise that the company has a Supercharging network enabling long-distance travel essentially anywhere in the U.S., Western Europe, and most places in Canada, Australia, and China.

Investors will get to see whether or not Tesla was able to hit its target for 181,000-plus vehicle deliveries for Q4 at some point during the first few days in January, when the automaker typically reports fourth-quarter deliveries. In the meantime, Tesla shareholders of the growth stock should be encouraged by Musk’s optimistic report on demand for the company’s vehicles.

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

More reading

• With the high Aussie dollar, is now a good time to buy US shares?
• This is Jeff Bezos’s most important investing lesson
• Here are the US shares ASX investors are buying
• Can Tesla Q4 production meet soaring demand?
• How the 21st century actually started in 2020

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

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

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There are some ASX dividend shares that have a history of paying attractive income payments to shareholders.

The Reserve Bank of Australia (RBA) official interest rate is now down to a low of just 0.1%.

Here are three examples of shares with a reputation for paying dividends:

Transurban Group (ASX: TCL)

Transurban is one of the world’s biggest toll road businesses. According to the ASX, it has a market capitalisation of $38 billion. At the end of September 2020, Transurban was Magellan Infrastructure Fund’s (ASX: MICH) largest position in its portfolio.

Before COVID-19 came along, it was steadily increasing its distribution every year. But then the pandemic significantly reduced traffic for a period of time whilst people worked and learned from home.

In the quarter ending 30 September 2020, Transurban said that its average daily traffic (ADT) was down by 25.2%. Volumes were down at the group level, but there had been continuing improvement in Brisbane, Sydney, the Greater Washington Area and Montreal. Melbourne was where most of the decline was, with Melbourne ADT down 58.6%. However, Melbourne restrictions have now been lifted.

The FY21 distribution by the ASX dividend share is anticipated to be in line with free cash excluding capital releases. The Commsec forecast distribution for Transurban in FY21 is expected to be around 38 cents per unit, equating to a distribution yield of 2.7%. FY22 is expected to have a distribution of 49.5 cents per unit, representing a forward yield of 3.5%.

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) which specialises in owning and leasing out agricultural properties. According to the ASX, it has a market capitalisation of $837 million.

It has a diversified portfolio of properties across different sectors including cattle, vineyards, almonds, macadamias and cropping (sugar and cotton). Its properties are also spread across different climates and states to add diversification.

Rural Funds owns a large amount of water entitlements for its tenants to use, which is helpful during times of low rainfall.

The REIT has rental growth built into all of its contracts. That growth is linked to either a fixed 2.5% increase per year or CPI inflation, plus market reviews. Rural Funds also retains some of its annual rental cash profit to invest into improvements at its farms which can boost the rental income and farm value.

The ASX dividend share aims to increase its distribution by at least 4% per year. It’s aiming to grow its distribution to 11.28 cents per unit in FY21, which equates to a forward distribution yield of 4.6%.

Service Stream Limited (ASX: SSM)

Service Stream is a business that’s involved in essential network services to the telecommunications and utility sectors. It’s involved in the design, construction, operation and maintenance of service networks.

According to the ASX, Service Stream has a market capitalisation of $979 million.

Service Stream has just announced that it has secured a “significant” long-term agreement with the NBN Co for the provision of service activations, operations and maintenance of the NBN.

The agreement is for an initial period of four years, with two two-year extension options. The deal will replace the existing operations and maintenance master agreement (MMA) that had been going since December 2015.

Under the Unify Services’ regional allocation model, NBN has allocated Service Stream the regions of Queensland, South Australia, Northern Territory and Western Australia, with additional regions able to be allocated at the NBN’s discretion. Unify Services is expected to generate approximately $70 million of revenue for the group in its first year, with subsequent years depending on annual work volumes.

In FY20 Service Stream maintained its dividend at 9 cents per share, which equates to a trailing grossed-up dividend yield of 5.3%.

More reading

• 2 ASX dividend shares with attractive yields
• What’s lifting the Transurban (ASX:TCL) share price today?
• ASX 200 Weekly Wrap: ASX 200 hits a 6! Thank iron ore
• These ASX dividend shares will help you overcome low interest rates
• 5 ASX dividend shares to buy for income in 2021

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of Transurban Group. 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 Scott Phillips.

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The Whitehaven Coal Ltd (ASX: WHC) share price has surged up 4.61% this morning, reclaiming most of yesterday’s loss, after the miner announced an upgrade to its coal resources.

At the time of writing, the Whitehaven share price is trading 7 cents higher at $1.59.

What’s moving the Whitehaven share price?

Whithaven advised today that its Winchester South’s metallurgical coal mine has been upgraded to 1,100Mt from 530Mt.

The company says the 1,100Mt figure includes 665Mt of measured and indicated resources, which has resulted in Whitehaven Coal’s total resources increasing 12% since August. In addition, Whitehaven’s total coal reserves have seen a 26% boost since August 2020. 

Winchester South is located approximately 30km southwest of Moranbah within the Northern Bowen Basin in Central Queensland, and is 100% owned by Whitehaven Coal. 

The mine life is approximately 20 years, with up to 15 million tonnes per annum (Mtpa) ROM capacity production. The total capital expenditure for the mine was $980 million, including biodiversity offsets and contingencies.

Whitehaven Coal managing director and CEO, Paul Flynn, said today’s declaration on Winchester South was an important milestone, providing “further confidence around resource definition and the various options to ensure the company maximises returns to shareholders from the project”.

Latest China coal ban

Today’s announcement is a welcome relief for the company which may be affected by China’s latest ban on Australian coal. 

Although still unofficial, Chinese media has reported that its top economic planner was allowing the country’s power plants to import coal without clearance restrictions from several countries, “except for Australia”.

This would seem to effectively ban Australia’s $13.7 billion exports to China indefinitely.

The Whitehaven share price dropped 6% on that news yesterday, along with other coal mining shares.

About the Whitehaven share price in 2020

The Whitehaven share price has fallen by around 40% in 2020 as the Australia-China geopolitical spat continued to unfold, in addition to weak global demand for coal as a result of the coronavirus pandemic.

The share price is a long way off from its 52-week high of $2.73.

More reading

• ASX 200 Weekly Wrap: ASX 200 on track for a top month
• These were the best performing ASX 200 shares last week
• Why Aroa Biosurgery, Straker, Virgin Money, & Whitehaven shares are dropping lower
• Why the Whitehaven (ASX:WHC) share price is rocketing 10%
• Why Aristocrat Leisure, Chalice Gold, Westpac, & Whitehaven Coal shares are charging higher

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Westgold Resources Ltd (ASX: WGX) shares have today remained in a trading halt after ceasing trading around midday yesterday. This comes after the company last night announced an incident had taken place at its Big Bell mine. Regrettably, the incident involved a mine worker being killed after she was struck by mobile plant.

In response to the incident, Westgold halted production at its Big Bell mine and suspended trading of its shares on Tuesday. The company advised that trading in its shares will be halted for 48 hours as investigations into the incident continue. 

The Westgold share price fell by more than 5% yesterday when news of the incident first broke out, before trading was halted.

What happened at Westgold’s mine?

Westgold has reported that a female worker was struck and fatally injured at the Big Bell mine. The company’s emergency response teams attended the scene and rendered assistance to the injured worker before the Royal Flying Doctor Service attended and transported the patient to Perth.

Tragically, the injured worker passed away while in transit to Perth. 

The incident is currently being investigated by the WA Department of Mines, Industry Regulation and Safety (DMIRS), and the company says it is cooperating with those investigations.

Mining operations at Big Bell have been temporarily suspended and will remain so until further notice.

Westgold says it will continue to provide support to the family of the worker and the team at Big Bell.

Westgold Resources executive chairman Peter Cook said:

Our hearts go out to the family of our employee as well as her colleagues. This devastating news has shaken all of us at Westgold to our core.

The safety and wellbeing of our people is a priority to us, which is why we will ensure that a thorough investigation is conducted into this tragic incident.

In the meantime, we will be extending all the support required to her family and to her colleagues at this difficult time.

Westgold shares last traded at $2.62.

More reading

• Why the Regional Express (ASX:REX) share price is soaring 10% higher today
• Why the Pilbara Minerals (ASX:PLS) share price crashed 17% lower today
• The Commonwealth Bank (ASX:CBA) share price is climbing higher today. Here’s why.
• Why the Bendigo and Adelaide Bank (ASX:BEN) share price is jumping higher today
• The Global Health (ASX:GLH) share price is lifting today. Here’s why.

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Regional Express Holdings Ltd (ASX: REX) share price has been a strong performer on Wednesday.

In morning trade the regional airline operator’s shares jumped as much as 10% to $2.07.

The Regional Express share price has since given back some of these gains but is still up 8% to $2.03 currently.

Why is the Regional Express share price soaring?

Investors have been buying the company’s shares this morning after it announced the receipt of the High Capacity Air Operator’s Certificate (HCAOC) by the Civil Aviation Safety Authority (CASA).

This means that the airline is now approved for Regular Public Transport services using the Boeing 737-800NG on its existing network where appropriate.

Why is this important?

With the HCAOC in hand and the airline able to fly its 737-800NG for Regular Public Transport services, Regional Express can now start preparing to compete with Qantas Airways Limited (ASX: QAN) and Virgin Australia on some of the busiest domestic travel routes.

The company is planning to commence domestic operations between Sydney and Melbourne from 1 March 2021 and thereafter to other major cities.

In preparation for this, it has launched a special promotion of 100,000 tickets offered at $79 on its nine daily return flights between Sydney and Melbourne.

What now?

There is expected to be some meaningful economic and traveller benefits from this development.

The company revealed that it hopes to be able to help in the national recovery effort by offering jobs to some of the thousands made redundant by other carriers during the pandemic.

Furthermore, it is looking forward to providing “domestic travellers with a safe and reliable yet affordable air service with its trademark country hospitality.”

Management spoke positively about the CASA team, acknowledging that it wouldn’t have been able to achieve this without its help.

Regional Express’ Executive Chairman, Lim Kim Hai, commented: “CASA’s commitment and dedication to the recovery effort during this period of national emergency is nothing short of outstanding and exemplary. Under the leadership of Shane Carmody and Craig Martin, CASA has gone above and beyond to ensure that the aviation industry is fully supported by the regulator in all aspects. CASA’s assistance was critical at a time when all airlines were fighting for survival.”

The good news for Qantas shareholders is that this news hasn’t put a dampener on its shares. The Qantas share price is up approximately 2% in morning trade.

More reading

• Qantas (ASX:QAN) budget flights to exceed pre-COVID levels by March
• ASX 200 rises on Monday
• Why I’m sticking with my Afterpay shares: fundie
• This is when ASX airport shares will take off
• Why this broker thinks it’s time to buy Qantas (ASX:QAN) shares

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

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The Pilbara Minerals Ltd (ASX: PLS) share price has returned from its trading halt on Wednesday and crashed lower.

In early trade the lithium miner’s shares were down as much as 17% to 72.5 cents.

The Pilbara Minerals share price has recovered slightly since then but is still down 13.5% to 75.7 cents at the time of writing.

Why is the Pilbara Minerals share price crashing lower?

The company’s shares have come under pressure today after it completed the institutional component of its equity raising.

According to the release, the company has raised a total of $61 million via an underwritten 1 for 7.6 pro-rata accelerated non-renounceable entitlement offer. These funds were raised at 36 cents per new share, which represents a massive 59% discount to its last close price.

This means the company has now raised a total of $180 million, following its previously completed $119 million cornerstone placement with AustralianSuper at the same price.

Pilbara Minerals will now push ahead with its retail entitlement offer, which is aiming to raise a further $60 million. This will bring its overall equity funding package to $240 million.

Why is Pilbara Minerals raising funds?

The proceeds from the equity raising will be used to fund the acquisition of the shares in Altura Lithium Operations for US$175 million. This is the company that owns Altura’s Pilgangoora Lithium Project in Western Australia.

Pilbara Minerals’ Managing Director, Ken Brinsden, commented: “We are very pleased with the extremely strong support for the Entitlement Offer shown from our institutional shareholders. This represents a clear endorsement of Pilbara Minerals’ highly strategic acquisition of the neighbouring Altura Project on an unencumbered basis.”

“The acquisition is expected to deliver significant benefits to Pilbara Minerals shareholders, including realisation of tangible operational synergies and consolidates our leading position in the Australian lithium market,” he concluded.

More reading

• Why everyone’s watching the Pilbara Minerals (ASX:PLS) share price
• Are ASX lithium shares a hot commodity right now?
• Why the PIlbara Minerals (ASX:PLS) share price is charging higher
• The 13 ASX shares that could have doubled your money in 2020
• Are ASX lithium shares making a comeback?

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

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The Commonwealth Bank of Australia (ASX: CBA) share price has opened strongly, climbing more than 1.4% since market open.

Why is the CBA share price lifting?

The S&P/ASX 200 Index (ASX: XJO) is up 0.5% to 6,666 points to start the day after Wall Street climbed higher overnight on COVID-19 vaccine news.

The CBA share price is lifting in early trade after a key announcement at the stroke of the bell. Broad market positivity alongside the announcement has helped boost the ASX bank share higher.

Australia’s largest bank announced it would merge Aussie Home Loans with Lendi, a leading online home loan platform. The merger will see Aussie’s strong brand name and significant network with Lendi’s market-leading technology and existing platform.

CBA acquired 100 per cent of Aussie back in August 2017 and has steadily grown the book in subsequent years. CBA will retain a 45% shareholding in the combined business with Lendi to take the remaining 55% stake. The bank will receive deferred consideration and a pre-completion dividend of $105 million in aggregate.

CBA CEO Matt Comyn said the business will offer “enhanced digital capabilities” for Aussie brokers with an improved customer experience. Lendi CEO and co-founder David Hyman was similarly bullish, hoping the merger will “drive even stronger outcomes for more homeowners and brokers alike”.

The proposed merger is subject to ACCC approval and other conditions, with completion expected by mid-calendar year 2021.

The CBA share price has reacted positively with the Aussie bank leading the way with a 1.48%% gain this morning. Shares in the other Big Four banks are also up with Australia and New Zealand Banking GrpLtd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) also gaining strongly.

Foolish takeaway

The Lendi merger has helped boost the CBA share price higher in early trade as the bank looks to sell down its stake in the mortgager broker business. 

More reading

• Why the Bendigo and Adelaide Bank (ASX:BEN) share price is jumping higher today
• The ASX bank with the best dividend yield under APRA’s new guidelines
• Why the Beacon Lighting (ASX:BLX) share price is on watch today
• Here’s how ASX 200 bank shares have performed in 2020 so far
• Why ASX banks are licking their lips right now

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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