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ASX falls flat as heavyweights sag; Travel, tech firms still ahead

The Australian sharemarket has handed back most of its early gains as the big banks join the miners in the red.

The benchmark index rose by as much as 0.7 per cent at the open but at noon had trimmed its lead to 0.2 per cent. At 12.15pm AEST the market was just 8.1 points higher at 5960.4.

Financial stocks retreated, with ANZ the only of the big four banks ahead. It was 0.1 per cent higher at $17.72.

BHP was 0.7 per cent lower and Rio Tinto had slid 1.2 per cent. Fortescue Metals held onto its early lead to remain 1 per cent higher at $16.02.

Gold miners were depressed, with Newcrest shedding 1.3 per cent, Northern Star 1.7 per cent and Evolution 1.3 per cent. Woolworths, Coles, and a2 Milk all fell to keep consumer staples as the worst-performing sector.

Biotech CSL was up 0.2 per cent, while support also came from retail conglomerate Wesfarmers, which rose 0.3 per cent, and Macquarie Group, which jumped 1 per cent.

Afterpay rose 2.6 per cent to $81.86 and travel stocks continued to shine. Qantas is 2.9 per cent higher, Webjet 1.2 per cent and Flight Centre and SeaLink 2.3 per cent.

Dual-listed dairy firm a2 Milk is having another poor day, although not as sour as yesterday’s 11.4 per cent plunge.

The team at Morgans, however, see the firm’s recent dive as an opportunity for investors to capitalise on a “short-term blip”.

A2 Milk on Monday warned first-half sales will be hit after a collapse in daigou sales in Australia.

A2 Milk on Monday warned first-half sales will be hit after a collapse in daigou sales in Australia.Credit:Peter Meecham

The company is 3.5 per cent lower on Tuesday at $14.67, having taken a fall on Monday on a soft trading update. The firm said pandemic lockdowns had hurt its lucrative daigou channels and would knock its first-half revenue lower.

But with COVID-19 only likely to impact a2 sales over a short period of time, Morgans believes the recent share price weakness is a buying opportunity in a “high quality growth company”.

With a 19.3 per cent upside to analysts’ revised price target of $18.14, Morgans on Tuesday upgraded a2 to an Add rating.

“While A2M’s trading update was weaker than expected, it shouldn’t come as a big surprise given recent updates from peers,” Morgans wrote.

“Importantly, a2 believes the issues impacting its business are temporary and is confident strong growth will resume in the (second half).”

A2 has been under scrutiny after its top executives sold millions of shares following the company’s financial results in August. Chairman David Hearn sold 250,000 shares for $NZ5,077,500, interim chief executive Geoffrey Babidge sold 100,000 shares and Asia Pacific chief executive Peter Nathan sold 750,000 shares.

Mr Babidge defended the share sales, saying “the company and management are completely aware of the continuous disclosure obligations, which was the case at the time, obviously, when the share sales were made during August.

Goldman Sachs Group has named Christian Johnston as chairman in Australia and New Zealand as the bank reshuffles its top management in the region.

Christian Johnston is set to become Goldman Sachs' chairman for the Australian region.

Christian Johnston is set to become Goldman Sachs’ chairman for the Australian region.Credit:Jessica Hromas

The appointment of Johnston, who’s head of investment banking at Goldman in Australia, was announced internally on Tuesday, according to a memo seen by Bloomberg News.

As part of the reshuffle, Zac Fletcher and Nick Sims will be appointed as co-heads of investment banking in Australia and New Zealand, said the people, who asked not to be identified as the information is private.

A representative for Goldman Sachs declined to comment.

Bloomberg

More than 150 Bougainville residents are petitioning the Australian government to investigate Rio Tinto over claims its failure to clean up millions of tonnes of waste from its former copper mine on the island has caused severe environmental damage and human rights violations.

The complaint, sent to the Anglo-Australian miner and the federal Treasury department this week, says the pollution left behind from Bougainville’s Panguna mine that Rio Tinto ran for decades has poisoned local water sources and put the community’s lives and livelihoods at risk.

Theonila Roka Matbob in front of an area destroyed by mine waste flooding.

Theonila Roka Matbob in front of an area destroyed by mine waste flooding.

Theonila Roka Matbob, a traditional landowner who has recently been elected to the Bougainville parliament, said residents were “living with the impacts of Panguna every day”. She said Rio Tinto had left them no choice but to take the matter to the international stage.

“Our rivers are poisoned with copper, our homes get filled with dust from the tailings mounds, our kids get sick from the pollution,” she said. “Every time it rains, more waste washes into the rivers, causing flooding for villages further downstream. Some communities now have to spend two hours a day walking just to get clean drinking water because their nearby creeks are clogged up with mine waste.”

The complaint, signed by 156 Bougainville residents, has been lodged with the Australian OECD Contact Point within the federal Treasury Department, which has the power to investigate complaints made against Australian companies operating overseas, issue findings on whether they were in breach of their obligations under the OECD guidelines and recommend actions.

Full story here

The Australian sharemarket has handed back most of its early gains as the big banks join the miners in the red.

The benchmark index rose by as much as 0.7 per cent at the open but at noon had trimmed its lead to 0.2 per cent. At 12.15pm AEST the market was just 8.1 points higher at 5960.4.

Financial stocks retreated, with ANZ the only of the big four banks ahead. It was 0.1 per cent higher at $17.72.

BHP was 0.7 per cent lower and Rio Tinto had slid 1.2 per cent. Fortescue Metals held onto its early lead to remain 1 per cent higher at $16.02.

Gold miners were depressed, with Newcrest shedding 1.3 per cent, Northern Star 1.7 per cent and Evolution 1.3 per cent. Woolworths, Coles, and a2 Milk all fell to keep consumer staples as the worst-performing sector.

Biotech CSL was up 0.2 per cent, while support also came from retail conglomerate Wesfarmers, which rose 0.3 per cent, and Macquarie Group, which jumped 1 per cent.

Afterpay rose 2.6 per cent to $81.86 and travel stocks continued to shine. Qantas is 2.9 per cent higher, Webjet 1.2 per cent and Flight Centre and SeaLink 2.3 per cent.

Shares in medtech Atomo Diagnostics were ahead 2.7 per cent to 37.5¢ this morning after the company said it was expanding its deal with Korean stock exchange-listed Access Bio to market a rapid COVID-19 antigen test.

The agreement with result in Atomo being given non-exclusive rights to market the test in Australia, New Zealand and India under its own brand. The product tests for antigens that indicate a patient is infected with COVID-19.

A healthcare worker holds a swab sample at the COVID-19 rapid test facility at Fiumicino Airport in Rome.

A healthcare worker holds a swab sample at the COVID-19 rapid test facility at Fiumicino Airport in Rome.Credit:Bloomberg

The test does not have to go to a lab to be processed, meaning results can be available after 10 minutes.

Atlassian co-founder Scott Farquhar is backing Australian startup Airwallex in a $US40 million ($56 million) fundraising which values the financial technology company at $US1.8 billion.

Mr Farquhar and his wife Kim Jackson have invested in Airwallex through their private investment vehicle Skip Capital and venture capital fund Square Peg, an existing investor, is also contributing to the round.

Airwallex president and co-founder Lucy Liu.

Airwallex president and co-founder Lucy Liu. Credit:Wayne Taylor

The investment comes as demand continues to rise for the real-time payments platform, with continued growth in digitised payments and cross-border payments through the coronavirus pandemic.

Speaking from Shanghai, where she said life was “pretty much back to normal”, co-founder Lucy Liu said Airwallex had continued to see a lot of interest from investors after it closed its series D fundraise of $US160 million earlier this year and so decided to extend the fundraising by another $US40 million to continue Airwallex’s global expansion.

Full story here

NSW has continued its run without a local coronavirus case, recording two new cases in hotel quarantine today.

However, the state’s testing rate has remained very low: there were 6381 coronavirus tests recorded during the latest 24-hour reporting period, only a couple of dozen up from the 6353 announced on Monday.

Follow our live and free coronavirus blog here

Victoria recorded 10 new coronavirus cases on Tuesday, and seven deaths.

Eight more crew from an iron ore bulk carrier off the coast of Port Hedland have tested positive to COVID-19. There are now 17 cases associated with the ship.

One million deaths from coronavirus worldwide is a “milestone no one would have ever wanted to see passed”, Prime Minister Scott Morrison has said in Canberra today.

“It is a reminder that we are living in the midst of a global pandemic, Mr Morrison said. “This is a pandemic that has been visited upon Australia from outside our shores and is one that has impacted on us greatly. In Australia, 882 lives have been lost to COVID-19: 670 of those in aged care.

The latest ANZ-Roy Morgan survey shows consumer confidence increased by 1.6 per cent last week – the fourth consecutive gain to the highest level in three months – as Australians anticipate more spending in next week’s federal budget.

The overall gain was driven by another big jump in “current economic conditions”, which rose 10.3 per cent, while “future economic conditions” edged up 0.5 per cent.

Consumer confidence is at a three-month high, according to ANZ and Roy Morgan.

Consumer confidence is at a three-month high, according to ANZ and Roy Morgan. Credit:Michele Mossop

Confidence over current economic conditions has jumped almost 20 per cent over the past fortnight.

“This likely reflects expectations for significant additional spending to be announced in next week’s federal budget,” ANZ senior economist Catherine Birch said.

“In the Treasurer’s speech last week, he outlined an updated fiscal strategy focussing on the jobs and economic recovery, rather than repairing the fiscal position, until the unemployment rate is “comfortably” back under 6 per cent.”

In contrast, “current financial conditions” has effectively plateaued for several weeks.

“This indicator will be one to watch as JobSeeker and JobKeeper payments are reduced,” Ms Birch said.

The weekly survey was based on 1,551 interviews conducted online and over the telephone on the weekend.

A previous version of this post incorrectly attributed Ms Birch’s comments to ANZ Head of Australian economics David Plank.

A $60 billion stimulus package, including tax cuts and cheques of up to $1000 to low and middle income earners, could stave off an “income cliff” and generate jobs for 135,000 people, new analysis highlighting the importance of next week’s federal budget reveals.

Ahead of a fiscal blueprint that Treasurer Josh Frydenberg has argued will boost aggregate demand across the country to bring down unemployment, research from two separate economic experts suggests the government will have to ramp up spending in the short term.

Treasurer Josh Frydenberg delivering last year's budget which forecast a surplus of $7.1 billion and a lid on spending. Now facing a deficit of more than $200 billion, the treasurer is being urged to lift spending.

Treasurer Josh Frydenberg delivering last year’s budget which forecast a surplus of $7.1 billion and a lid on spending. Now facing a deficit of more than $200 billion, the treasurer is being urged to lift spending.Credit:Alex Ellinghausen

Modelling by consultancy firm EY, to be released on Tuesday, found spending $60 billion on reducing personal income taxes, boosting the JobSeeker payment and extra infrastructure projects over two years would cut the jobless rate by a full percentage point. That equates to an extra 135,000 people in work.

The government has committed itself to maintaining fiscal support for the economy until unemployment is comfortably below 6 per cent. It is currently 6.8 per cent, although Treasury and private sector analysts are expecting this to increase as more people re-enter the workforce.

Full story here

Westpac’s institutional bank chief executive Curt Zuber will retire next year and Joanne Dawson has been promoted to group treasurer effective immediately, in a leadership reshuffle announced Tuesday morning.

It comes as the bank was criticised last week for a lack of gender balance after Alison Deans’ resignation left just two women on the bank’s board of directors.

Westpac's institutional bank chief executive Curt Zuber will retire next year and Joanne Dawson has been promoted to group treasurer effective immediately.

Westpac’s institutional bank chief executive Curt Zuber will retire next year and Joanne Dawson has been promoted to group treasurer effective immediately. Credit:Peter Braig

Westpac chief executive Peter King said Ms Dawson was an “experienced leader” who had been with the bank since 2003.

“Her extensive experience in global funding, liquidity and balance sheet management will help ensure a smooth transition to this critical role,” Mr King said.

Ms Dawson worked at insurance giant IAG in asset management before joining Westpac where she served as deputy group treasurer for a decade.

Mr King also thanked Mr Zuber for his time at the company over the past 25 years.

“Curt’s insights, commitment and leadership have been invaluable to me personally and to the company, and he has played a significant role in ensuring the strength of Westpac’s balance sheet through some particularly challenging periods.”

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