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  • Why buying Bitcoin might be the best investment right now: broker

    Two investors look at a graphic showing a bitcoin in the centreTwo investors look at a graphic showing a bitcoin in the centre

    Bitcoin (CRYPTO: BTC) hasn’t been the best of investments this calendar year.

    At all.

    Since 1 January, the price of the world’s top crypto has tumbled a painful 59%. That compares to a 32% loss posted by the tech-heavy NASDAQ.

    The rout has been driven by fast-rising interest rates across the world to combat soaring inflation. And it’s hit almost every crypto, not just BTC. In fact, only three of the top 100 tokens by market cap – stablecoins aside – are in the green year-to-date.

    But as far as Bitcoin is concerned, the token just might be the best investment on the market right now.

    Is Bitcoin set for massive outperformance?

    According to a report by JPMorgan (sourced from The Crypto Basic), Bitcoin is forecast to be the highest projected excess return asset class.

    The data (which lists Refinitiv Eikon, Bloomberg Finance and JP Morgan as sources), indicates that Bitcoin has a projected excess return rate of 38.1%.

    That beats out the number two asset class, private equity, which has a projected excess return rate of 21%, and number three global equities, with a projected excess return rate of 21%.

    In case you’re wondering, the projected excess return rate is a forecast estimate of how much the various asset classes are expected to beat the returns that the market has already priced in.

    The report also lists the historic volatility of the different asset classes.

    Not surprisingly, Bitcoin has by far the highest volatility rating among them. Meaning investors should be prepared for some big price swings, whether the token is trending higher or lower.

    Just don’t tell the CEO

    While the JPMorgan analysis may be bullish on Bitcoin, and the firm itself has embraced blockchain technology, CEO Jamie Dimon still isn’t a fan.

    Speaking at a US congressional hearing this week, Dimon said (courtesy of Bloomberg), “I’m a major sceptic on crypto tokens, which you call currency, like Bitcoin. They are decentralized Ponzi schemes.”

    Ponzi scheme? Top medium-term investment? Both?

    Time will tell.

    The post Why buying Bitcoin might be the best investment right now: broker appeared first on The Motley Fool Australia.

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    JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and JPMorgan Chase. The Motley Fool Australia has positions in and has recommended Bitcoin. 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 US stock market just hit new 2-year lows. But it’s not all bad news

    Broker holding red flag in front of bearBroker holding red flag in front of bear

    The US stock market is likely to suffer its worst September since 2008 but there may be light at the end of the tunnel.

    The S&P 500 Index (SP: .INX) tumbled 2.1% last night to its lowest level since November 2020 and it’s lost nearly 9% this month. The Nasdaq Composite Index (NASDAQ: .IXIC) fared worse last night with a 2.8% retreat to a fresh low this year.

    Why the US stock market is falling

    It’s a case of good news being bad news. Resilient jobs data in the US is reinforcing the view that the US Federal Reserve will need to keep lifting interest rates aggressively to fight inflation.

    The negative sentiment is spilling over to our market. The futures market is predicting a 0.3% drop in the S&P/ASX 200 Index (ASX: XJO) this morning.

    Signs of hope for a turnaround

    But there might be a little relief around the corner for embattled investors. US stock futures are trending up following Thursday’s sharp sell-off on Wall Street.

    The S&P 500 futures are up 0.3% and the Dow Jones Industrial Average Index (DJX: .DJI) futures are pointing to a 0.2% gain, reported CNBC. The NASDAQ-100 Index (NASDAQ: NDX) futures are also indicating a 0.1% gain for the tech heavy index.

    Could the worst be over for the US stock market?

    It might be too early to pop the champaign, but investors have another reason to celebrate. This month is just about over and September has a notorious reputation of being the worst month for the US stock market.

    In fact, history has shown that US equities have fallen almost every September over the past several years.

    Given the ASX 200’s correlation to the US share market, September isn’t a great month for us either. Our top 200 share index is nursing a loss of around 6% for the month.

    When bad news could be good

    But there are two other reasons to be hopeful. The flood of doom and gloom headlines about shares and the economy may signal that the bottom could be closer than you’d think.

    The overwhelming sense of pessimism tends to overtake everything just before the bear market turns. I am not suggesting we are there yet, but this is how bad news can turn good.

    Will Xmas save US and Australian shares?

    The other thing worth remembering is the end of year Santa Rally. This is another seasonal trend that occurs as dependably as the September sell-down.

    If next month’s US inflation data shows signs that price pressures are easing, this might just be enough to convince bargain hunters to jump back into the US stock market.

    There is no doubt that ASX investors will also be basking in the afterglow should US sentiment turn positive.

    It’s a big “if”, but most share investors are by their nature a “glass half full” kind of crowd, aren’t we?

    The post The US stock market just hit new 2-year lows. But it’s not all bad news appeared first on The Motley Fool Australia.

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    Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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  • Here’s what one billionaire thinks about crypto right now

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

    man standing and looking at an inclining road with the word cryptocurrency written on it and a question mark at the top of the road

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

    In early September, Coinbase Global‘s (NASDAQ: COIN) CEO, Brian Armstrong, appeared on CNBC to discuss his company’s management of the crypto winter, his thoughts about particular cryptocurrencies, and where he thinks the market is headed in the coming months. 

    Armstrong has been at the helm of Coinbase since he founded the company in 2012. Since then, the cryptocurrency market has gone through numerous boom-and-bust cycles. When Armstrong started his business, Bitcoin (CRYPTO: BTC) traded for less than $15. Today, it is hovering around $20,000, and Armstrong’s net worth is believed to be around $2 billion. 

    A challenging time, but there is reason for hope

    Just because Armstrong is the CEO of one of the most popular cryptocurrency exchanges doesn’t mean he knows exactly what will happen next in the crypto market.

    But he has been around since just about the beginning of cryptocurrencies and has managed to keep his company afloat regardless of economic conditions. So when he shares his thoughts on the market today, people inevitably listen. 

    In the CNBC interview, Armstrong was asked about the current crypto environment and what it could look like once it returns to healthier levels. Most notable were his comments on a transition from primarily retail investing in crypto to larger institutions now joining in.

    Armstrong believes that one particular sector will drive the next wave of crypto adoption: big tech. He cited the agreement between Coinbase and the world’s largest asset manager, BlackRock (NYSE: BLK).

    In the agreement, the latter’s investing software will integrate directly with Coinbase so BlackRock clients can purchase Bitcoin seamlessly.

    Armstrong thinks that more and more companies will follow this business model in the future. Since these large companies typically have more money on hand than retail investors, he is optimistic that this influx of capital entering the crypto market could send it to heights we have yet to see. 

    But until then, Armstrong’s company faces an uphill battle as investors shy away from risky assets like cryptocurrencies due to poor macroeconomic conditions.

    Coinbase primarily generates profits from the transaction fees it charges for trades. With less trade volume, Coinbase’s profits are taking a severe hit. 

    He was asked about when he sees the current crypto winter ending. He said that this one is a little different from other crypto winters in the past since it “happens to coincide with the broader macro environment coming down.” He was mainly referring to rising inflation and climbing interest rates. 

    Armstrong hopes that the macro environment improves in the next 12 to 18 months, allowing crypto to have a “nice recovery”.

    The main takeaway

    Investors shouldn’t hang on to every word that comes out of the mouths of billionaires, but they should consider these statements when making decisions because they may contain valuable insights.

    Armstrong does have more experience in the crypto industry than just about anyone else, and his knowledge can be helpful in gaining more perspective on the sector’s current position. 

    Armstrong believes that there are cycles when it comes to crypto, similar to the stock market. The incredible growth that the sector experienced from 2020 to 2021 was not sustainable, and it was inevitable that some sort of correction would follow.

    Suppose Armstrong is correct, and the market is in for a lackluster performance over the next year and a half. In that case, that means now could be the time for investors to take advantage of incredibly discounted prices in preparation for a return to a healthier market. 

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

    The post Here’s what one billionaire thinks about crypto right now appeared first on The Motley Fool Australia.

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    RJ Fulton has positions in Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Coinbase Global, Inc. The Motley Fool Australia has positions in and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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



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  • Everything you need to know about the latest Premier Investments monster dividend

    A laughing woman wearing a bright yellow suit, black glasses and a black hat spins dollar bills out of her hands signifying the big dividends paid by BHP

    A laughing woman wearing a bright yellow suit, black glasses and a black hat spins dollar bills out of her hands signifying the big dividends paid by BHP

    The Premier Investments Limited (ASX: PMV) share price was a very strong performer on Thursday.

    The retail conglomerate’s shares rocketed higher after investors responded positively to the release of a better than expected full year result.

    What happened in FY 2022?

    For the 12 months ended 30 July, Premier reported a 5.2% increase in global sales to $1,497.5 million. This was despite the company losing 42,675 trading days from COVID-related store closures.

    Goldman Sachs was impressed with its performance. It commented:

    PMV reported strong FY22 results with Sales +3.8% YoY (+6% vs GSe, +4% vs Factset Consensus) and normalized NPAT +7.4% YoY (29% vs GSe, 9% vs Factset Consensus). The beat was largely driven by stronger than expected sales across all key segments, with Peter Alexander (+10% vs GSe), Smiggles (+7% vs GSe) and Apparel Brands (+3% vs GSe), while expenses were largely in-line with GSe.

    Also getting investors excited was the Premier Investments dividend for FY 2022.

    The Premier Investments dividend

    In light of its strong performance, the Premier Investments board declared a fully franked final dividend of 54 cents per share and a fully franked special dividend of 25 cents per share.

    This took its full year dividend to $1.25 per share, which was up a massive 56.3% year over year.

    Based on the current Premier Investments share price of $23.25, this represents a very generous 5.4% dividend yield.

    To qualify for the final and special dividends, investors will need to snap up shares before they trade ex-dividend. But unlike most companies that pay their dividends within a month to six weeks of their results, this won’t be happening any time soon.

    For reasons unknown, Premier Investments’ shares won’t be trading ex-dividend until 10 January 2023. The company will then pay these dividends to shareholders in just under four months from today on 25 January 2023.

    The post Everything you need to know about the latest Premier Investments monster dividend appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Premier Investments 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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  • Why Tesla shares tanked today

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

    A Tesla car on a road with a wide background.

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

    What happened

    At 2:05 p.m. ET today, Tesla (NASDAQ: TSLA) shares were trading near the lows of the day, down 7.1%. The company is ready to update investors over the next several days, but that isn’t likely the reason for the big drop today.

    So what

    Over the upcoming weekend, Tesla will provide its third-quarter delivery data, if it sticks to its typical timeframe for those numbers. One analyst just cut his delivery estimate as well as his stock price target, which may be contributing to today’s move. But the bulk of the drop today can be attributed to the market in general, as the tech-heavy Nasdaq Composite index was trading down by more than 3%.

    Piper Sandler analyst Alex Potter put out a note yesterday in which he lowered his estimated third-quarter deliveries from 380,000 to 354,000. He also cut the firm’s price target to $340 per share, reports Barron’s. Potter still thinks the stock is a buy, however, as the new price target implies a gain of more than 18% from yesterday’s closing price.

    Now what

    Tesla is also set to hold its second annual “AI Day” tomorrow. That should provide investors with updates on topics ranging from Tesla’s humanoid robot to its quest for a full self-driving vehicle.

    Until investors hear more from the company regarding both deliveries and its artificial intelligence segment, the stock is likely to trade with other higher risk assets. Today, that’s to the downside.      

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

    The post Why Tesla shares tanked today appeared first on The Motley Fool Australia.

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    The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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 Scott Phillips.

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

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  • The Beach Energy dividend is rolling in today. Here’s the lowdown

    A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop in front of them.A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop in front of them.

    The Beach Energy Ltd (ASX: BPT) share price is edging lower amid the company’s eligible shareholders being rewarded today.

    The energy producer’s shares are currently down 0.34% to $1.475 apiece.

    For context, the S&P/ASX 200 Index (ASX: XJO) is sinking during Friday morning trade following heavy losses on Wall Street overnight. The benchmark index is down 0.5% to 6,540.3 points.

    Beach Energy pays out FY 2022 final dividend

    Beach Energy reported strong financial growth in its full-year results despite recording lower production for the year.

    In summary, production fell 15% to 21.8 million barrels of oil equivalent (MMboe), but higher energy prices bumped up the company’s revenue.

    This led Beach Energy to achieve total revenue of $1.8 billion, up 13% over the prior corresponding period.

    On the bottom line, underlying net profit after tax (NPAT) rocketed 39% to $504 million.

    At the end of the financial year, Beach Energy had a net cash position of $765 million to complete its key objectives.

    This includes connecting the Thylacine and Enterprise wells to the Otway Gas Plant as well as progressing the Cooper Basin drilling.

    Subsequently, the board declared a fully franked dividend of 1 cent per share to be paid on 30 September (today). This is the same amount that has been paid by the company since March 2017.

    Beach Energy has a dividend reinvestment plan (DRP), but it is not being offered to shareholders at this point.

    Beach Energy share price summary

    Despite plummeting 15% lower in the past month, the Beach Energy share price has gained 16% in 2022.

    Beach Energy has a price-to-earnings (P/E) ratio of 6.65 and commands a market capitalisation of approximately $3.35 billion.

    The post The Beach Energy dividend is rolling in today. Here’s the lowdown appeared first on The Motley Fool Australia.

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    Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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  • A2 Milk share price drops despite solid start to FY23

    a woman sits with a glass of milk in front of her as she puts a finger to the side of her face as though in thought while her eyes look to the side as though she is contemplating something.

    a woman sits with a glass of milk in front of her as she puts a finger to the side of her face as though in thought while her eyes look to the side as though she is contemplating something.

    The A2 Milk Company Ltd (ASX: A2M) share price is under pressure on Friday.

    In morning trade, the infant formula company’s shares are down 1% to $5.32.

    Why is the A2 Milk share price falling?

    Investors have been selling down the A2 Milk share price despite the release of a trading update ahead of the start of the company’s on-market share buyback programme.

    According to the release, the company intends to commence its on-market share buyback programme on 5 October 2022.

    This will run for up to 12 months and could see A2 Milk acquire up to 37.2 million ordinary shares through both the NZX and ASX at the prevailing market price.

    Ahead of the start of the buyback programme, management decided to provide investors with a quick trading update.

    Trading update

    The good news for shareholders is that the new financial year has started in a positive fashion.

    Management advised that sales during the first quarter of FY 2023 are expected to be slightly ahead of expectations. This has been driven by favourable foreign exchange movements.

    However, the weaker New Zealand dollar does impact its purchasing power and therefore has put a bit of pressure on its cost of sales and cost of doing business. As a result, its EBITDA is only expected to be in line with expectations during the quarter.

    The company stated:

    By way of a trading update prior to commencing the buyback, the Company has made a positive start to the year, with 1Q23 sales expected to be marginally ahead of plan primarily reflecting the benefit of favourable foreign exchange driven by depreciation of the New Zealand Dollar (NZD). Due to the currency impact on cost of sales and cost of doing business, notwithstanding the benefit to sales, 1Q23 EBITDA is expected to be in line with plan.

    Looking ahead, the company continues to highlight that a number of factors could impact its performance over the remainder of the financial year. These include “COVID-19 impacts on supply chain, SAMR registration process timing, volume impact of price increases, foreign exchange movements, cross border trade, changes in the regulatory environment, and commodity prices.”

    Time will tell if A2 Milk can build on its solid start in the coming quarters.

    The post A2 Milk share price drops despite solid start to FY23 appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. 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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  • Could Telstra shares be set to benefit from the Optus hack?

    A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.

    It’s been turmoil in the telecommunications space after Optus revealed hackers had taken off with the personal data of nearly 10 million Australians last week. But the incident could have brought a silver lining for Telstra Corporation Ltd (ASX: TLS) shares.

    Experts have reportedly voiced concerns the hack could cause Optus’ market share to shift. Of course, that could be good news for Telstra.

    The company holds the majority share of the Aussie telco market, with Optus generally coming in second.

    Stock in the national carrier is currently trading at $3.87.

    Let’s take a closer look at what the Optus breach could mean for its S&P/ASX 200 Index (ASX: XJO) competitor.

    Could Optus’ suffering benefit Telstra shares?

    Telstra shares could ultimately benefit from a hack – and a potential resulting hit to Optus’ reputation – that saw the data of 9.8 million current and former Optus customers reportedly ransomed by hackers.  

    Analysts at S&P Global have reportedly said Optus customers could end up ditching the telco following the drama. They said, courtesy of The Australian:

    The longer-term reputational impact of the breach remains a rating focus. This includes how it will affect Optus’s market share and its ability to sustain its pricing and average revenue per user.

    A key influence on this will be customer perceptions of the adequacy of Optus’s response and the extent to which investigations reveal any fundamental flaws in the group’s cyber­security systems and governance practices. We believe Optus’s customer base will have limited tolerance for any material subsequent data breaches, thereby increasing franchise risks relative to peers if it happens again.

    A shift in market share could also benefit Telstra’s fellow ASX 200 telco TPG Telecom Ltd (ASX: TPG).

    Optus notified customers of the cybersecurity attack last Thursday.

    The company is offering a 12-month Equifax Protect subscription to its most affected customers. It’s also working with state and territory governments to wave or provide a credit equivalent of fees charged to those replacing exposed driver’s licences.

    The Telstra share price has traded close to the S&P/ASX 200 Communications Index (AS:X XTJ) over the last week.

    After falling 1.8% on Friday, it has gained almost 3% so far this week. Meanwhile, the sector dumped 2.6% last Friday and has lifted 2.6% since.  

    The post Could Telstra shares be set to benefit from the Optus hack? appeared first on The Motley Fool Australia.

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    Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended TPG Telecom 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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  • CBA share price falls despite APRA update

    A woman wearing yellow smiles and drinks coffee while on laptop.

    A woman wearing yellow smiles and drinks coffee while on laptop.

    The Commonwealth Bank of Australia (ASX: CBA) share price is falling with the market on Friday.

    In morning trade, the banking giant’s shares are down 1% to $92.27.

    What’s going on with the CBA share price?

    Investors have been selling the bank’s shares today despite a positive announcement out of Australian Prudential Regulation Authority (APRA).

    According to the release, APRA has removed the remaining $500 million capital add-on applied to CBA to address previous weaknesses in its governance, accountability, and risk culture frameworks and practices.

    The regulator initially imposed the $1 billion capital add-on on the bank in May 2018 in response to the final report of the Prudential Inquiry into the Commonwealth Bank of Australia.

    APRA notes that the inquiry concluded that “CBA’s continued financial success dulled the senses of the institution.” This was particularly in relation to the management of non-financial risks. As a result, an extensive remediation plan was established to address the identified shortcomings.

    The good news is that APRA has been satisfied with the remediation program and notes that CBA has addressed all recommendations. This follows validation work undertaken by APRA to ensure all remediations were sustainable and well-embedded.

    CBA response

    CBA has responded to the news. It highlights that the removal of the remaining operational risk capital overlay of $500 million will represent an increase in its Common Equity Tier 1 capital of 15 basis points.

    CBA’s CEO, Matt Comyn, commented:

    We are committed to ensuring the improvements we’ve made to our governance, culture and risk management practices are continuously improved and sustained.

    The post CBA share price falls despite APRA update appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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  • Telstra share price lower amid ACCC update on TPG agreement

    A woman holds an old fashioned telephone ear piece to her ear while looking unhappy sitting at a desk with her glasses crooked on her nose and a deflated expression on her face.

    A woman holds an old fashioned telephone ear piece to her ear while looking unhappy sitting at a desk with her glasses crooked on her nose and a deflated expression on her face.

    The Telstra Corporation Ltd (ASX: TLS) share price is edging lower on Friday morning.

    At the time of writing, the telco giant’s shares are down 0.5% to $3.86.

    This follows an update from the Australian Competition and Consumer Commission (ACCC) in relation to the company’s proposed regional mobile network arrangement with rival TPG Telecom Ltd (ASX: TPG).

    What is weighing on the Telstra share price?

    This morning the ACCC voiced its concerns over the proposed regional mobile network arrangement.

    As a reminder, in February Telstra and TPG announced a ten-year regional Multi-Operator Core Network (MOCN) commercial agreement. Telstra advised that the agreement would provide significant value to its wholesale mobile revenues, while providing TPG’s subscribers with 4G and 5G services within a defined coverage zone across regional and urban fringe areas.

    The ACCC notes that the two parties are asking for authorisation for the deemed acquisition of certain TPG spectrum, which is tied to three interrelated network agreements that are being considered together.

    This would see Telstra obtain much of TPG’s mobile spectrum in a range of outer-suburban and regional areas, where about 17% of Australians live. Telstra would also obtain 169 of TPG’s mobile sites in that area. TPG would then shut down its remaining 556 mobile sites in those areas and acquire mobile network services from Telstra for mobile coverage.

    ACCC’s statement of issues

    The ACCC has set out issues for further consideration and is calling for further views from industry and consumers on how these agreements may impact competition and whether there are public benefits.

    ACCC Commissioner, Liza Carver, commented:

    Mobile companies compete in terms of the infrastructure and spectrum they have, as the infrastructure and spectrum impacts on coverage and speed which are important to customers. We are assessing how the proposed infrastructure and spectrum arrangements between TPG and Telstra will change the incentives and ability of Telstra, TPG, Optus, and other market participants to compete and to invest in mobile service infrastructure.

    There is still a lot of work to do on this complicated and nuanced review, which is of critical importance to competition in the mobile telecommunication sector. At this stage we have not reached any overall conclusions, but welcome further submissions from stakeholders and consumers alike on the issues raised. We are looking extremely closely at all aspects of these agreements, as a decision either way can have significant long term effects.

    The ACCC concluded by warning that it can only grant authorisation if it is satisfied that either there is not a likely substantial lessening of competition, or that there is likely to be public benefits that outweigh any public detriments.

    A final decision is expected in December.

    The post Telstra share price lower amid ACCC update on TPG agreement appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended TPG Telecom 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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