A weak day for markets in Asia, especially Australia was not followed up in Europe and the US where solid gains and new record highs were the order of the day.
That points towards the local market regaining much of yesterday’s 26 point loss when trading resumes this morning with share price futures pointing to a gain of more than 25 points.
The Aussie dollar continued to lose ground after the jawboning yesterday from Reserve Bank Governor, Glenn Stevens.
The currency fell more than one US cent overnight and yesterday and traded around 94.75 this morning.
A week ago the currency topped the 97 US cent mark.
The Dow hit a new all time high, as did the Standard & Poor’s 500.
In fact the S&P 500 set its 33rd record high close of the year, finishing up 9.84 points, or 0.6%, at 1,771.95.
The Dow topped its closing high record from five weeks ago, finishing up 111.42 points, or 0.7%, at 15,680.35.
The Nasdaq Composite Index ended up 12.21 points, or 0.3%, at 3,952.34.
US traders are awaiting the statement from the meeting of the US Federal reserve’s key policy committee which started overnight.
That meeting ends early tomorrow with a statement being issued.
The Nasdaq ended higher, but gold and oil lost ground.
Markets in London, Paris, Germany and Spain all ended the day with solid gains, while the Italian market jumped a strong 2.3%.
There was just no sign of the nerves that hit our market yesterday, as well as undermining Tokyo and Shanghai.
At the close here yesterday, the ASX200 index was down 25.9 points, or 0.48%, at 5,415.5 points despite the record profit and higher dividend from the ANZ.
The All Ordinaries index was down 26.6 points, or 0.49%, at 5,410.7.
The ANZ’s shares continued to reach new highs after making a $6.5 billion cash profit in the year to September. The dividend was lifted 13%, but that wasn’t enough to hold up the wider market. ANZ shares ended up 39 cents, or 1.2%, to $33.63, but the NAB finished flat at $36.68, Westpac dropped one cent to $34.60 and Commonwealth Bank was 61 cents lower at $76.79. ANZ shares have jumped by around 33% over the past year.
In the resources sector, BHP Billiton fell 26 cents to $37.59, Rio Tinto dropped 97 cents to $63.41 and Fortescue Metals eased 10 cents to $5.32.
But while the market will start solidly this morning, interest will be on the amazing takeover situation that has Warrnambool Cheese and Butter Factory (WCB) at its centre.
Kirin of Japan, which already owns Dairy farmers and National Foods, swooped yesterday through its Lion Nathan subsidiary in Australia to pick up a 9.9% in the takeover target at prices up to $9.25.
That values Warrnambool at half a billion dollars, compared to the $320 million when Bega launched its bid on September 12.
That’s much higher than the $8 a share cash offer from Canadian dairy group, Saputo and higher than the $7.50 a share offer from Murray Goulburn Co-Operative and the share and cash offer from Bega Cheese that was valued at $7 a share at Bega’s close last night of $4.17.
Warrnambool shares ended the dramatic day’s trading at $8.80.
WCB Vs BGA YTD – Forget the ANZ, US and records, Warrnambool’s at the eye of a takeover storm
Judging from comments in this morning’s media, Kirin has built a blocking stake and it is doubtful at the moment whether it will press on with a bid.
It doesn’t have to and we now have it with 9.9% and Murray Goulburn and Bega with a combined 35%.
Kirin which has invested billions of dollars in Australia (it also owns Lion Nathan Breweries and Berri fruit juices), has a history of paying huge amounts of money for Australian assets ($3.1 billion for National Foods and nearly a billion dollars for Dairy Farmers) and then writing off huge amounts.
The key part of the whole story is that Lion buys most of the 12,000 tonnes of bulk cheese a year it sells into the local market from Warrnambool.
There are also other close links to produce cheese for Coles supermarkets.
