Charter Hall Group (CHC):
Property investment group Charter Hall could emerge as one of the country’s leading providers of real estate debt if it can build up a $1.5 billion fund in the specialist area. Macquarie Equities said it was positive on the strategic merit and financial implications of Charter Hall launching a real estate debt fund. It estimated that bank lending to commercial real estate in Australia was worth about $17bn and a $1.5bn fund for Charter Hall could lift the group’s earnings per share by 2.1 per cent on a full-year basis.
Kin Ming NL (KIN):
Junior gold stock Kin Mining has taken the extraordinary step of halting development of its flagship Leonora gold mine, prompting a massive selldown in its shares. Perth-based Kin on Wednesday revealed it would stop work immediately on its $35.4 million mine after realising the development was poised to run significantly over budget. While cost blowouts are an all-too-common feature of the Australian mining industry, Kin is the first miner in recent memory to take the decision to halt a development already underway as the result of an overrun. The decision saw Kin’s share price more than halve in response, with the stock eventually closing 40.4 per cent lower to 15.5c a share.
Macquarie Group Ltd (MQG):
Investment bank Macquarie Group is pushing further into the US, with a purchase of 77 apartments in one block in upstate New York. An affiliate of the bank bought the 77 apartments for $US43.5 million ($56.15m), according to local media reports. The units are in a building known as The Cambium in Larchmont, Westchester County, close to the train line and highway to New York City. The purchase by Northeast Property Owner, affiliated with Macquarie, came at a reported average price of $US565,044 per unit. This is lower than prices listed on the building’s website.
Mineral Resources Limited & Atlas Iron Limited (MIN & AGO):
Mineral Resources managing director Chris Ellison says rebel shareholders in Atlas Iron face being wiped out if they block his company’s $280 million takeover bid. Speaking publicly for the first time since announcing the friendly offer on Monday, Mr Ellison said Atlas faced a bleak future if it continued on its own. There are more than 15,000 individuals on the Atlas register who hold parcels of stock worth less than $500, including 4901 investors with holdings of less than $20. Despite the tiny positions, those shareholders have the power to potentially block the MinRes offer given it requires at least 50 per cent of individual shareholders to approve the offer. Mr Ellison said that combining Atlas’s iron ore business with MinRes’s existing Pilbara iron ore -operations could generate the enlarged company between $180m and $200m a year. The Atlas takeover could also deliver MinRes more than $500m in accumulated tax losses sitting on Atlas’s balance sheet, although Mr Ellison said the possible tax benefits of the transaction was “not even in our thoughts”.
Scentre Group (SCG):
Scentre Group, owner of Westfield shopping centres across Australia and New Zealand, has joined the list of retail property landlords looking to develop major residential projects. The group has submitted fresh plans to overhaul its centre in Hurstville, proposing five new buildings and new levels above the existing complex it co-owns with the Dexus Wholesale Property Fund. The plan would be the local Westfield operator’s first significant move into the apartment sector, aside from a boutique joint venture it is undertaking near its landmark Bondi centre. The plan looks to provide 925 residential units and provide an additional 12,400sq m of retail floor space. The proposal would see a skyline-retail and dining precinct, a residential precinct, a mixed-use precinct for residential and retail use, and a new sky garden.
Sigma Healthcare Ltd (SIG):
Sigma Healthcare will start construction on a $100 million distribution centre in Sydney today, marking the biggest single infrastructure investment in the company’s history. Mark Hooper, chief executive of the pharmacy wholesale and distribution business, which also has the largest pharmacy network in Australia, said the investment was confirmation of the belief the company had in its own strategy. The program is a transformational play by Sigma to fundamentally change its operational efficiency, a move that will help limit the impact of continuing headwinds the business faced. He said while the capacity for growth was in Sigma’s core distribution business that serviced retail pharmacies, there was also future growth in hospitals as the company looked to further expand its footprint in that sector.
South32 Ltd (S32):
Mining heavyweight South32 faces a protracted period of uncertainty over its Cerro Matoso nickel mine in Colombia as it attempts to overturn a ruling by the nation’s constitutional court. Perth-based South32 yesterday confirmed it would appeal the recent decision, which leaves it exposed to a potentially substantial damages bill as well as at risk of losing its environmental licence at the mine, and last night issued a statement detailing what it says was the court’s “mistaken interpretation” in the case. The legal action dates back to 2013 and relates to alleged health and environmental impacts on the seven small communities surrounding Cerro Matoso. The Cerro Matoso mine was one of the better performers within South32’s portfolio in the last half, generating $US41m in earnings before interest, taxation, depreciation and amortisation in the last six months of 2017. That was up from an EBITDA loss of $US4m a year earlier.
Westpac Banking Corporation (WBC):
Westpac has launched a crackdown on declining lending standards in the $1.6 trillion home loan sector, and will start grilling customers on their spending habits for everything from pet insurance to Netflix subscriptions. The move comes as the banking royal commission zeroes in on irresponsible lending and mortgage fraud, and as the banking regulator pushes the sector to be more meticulous when it combs through borrower information. Investment bank UBS estimated there were about $500 billion worth of “liar loans” sitting on books of Australia’s banks, sold to customers who falsified information in order to meet lending criteria. Westpac previously told mortgage brokers it would unleash three global credit agencies to audit borrower credit information as regulators ramp up scrutiny over the lending behaviour of the banking sector. Westpac said it would be “enhancing credit assessments” with agencies Equifax, Experian and Illion to be supplied with all consumer credit customer data from April.
(Source: AIMS)
Property investment group Charter Hall could emerge as one of the country’s leading providers of real estate debt if it can build up a $1.5 billion fund in the specialist area. Macquarie Equities said it was positive on the strategic merit and financial implications of Charter Hall launching a real estate debt fund. It estimated that bank lending to commercial real estate in Australia was worth about $17bn and a $1.5bn fund for Charter Hall could lift the group’s earnings per share by 2.1 per cent on a full-year basis.
Kin Ming NL (KIN):
Junior gold stock Kin Mining has taken the extraordinary step of halting development of its flagship Leonora gold mine, prompting a massive selldown in its shares. Perth-based Kin on Wednesday revealed it would stop work immediately on its $35.4 million mine after realising the development was poised to run significantly over budget. While cost blowouts are an all-too-common feature of the Australian mining industry, Kin is the first miner in recent memory to take the decision to halt a development already underway as the result of an overrun. The decision saw Kin’s share price more than halve in response, with the stock eventually closing 40.4 per cent lower to 15.5c a share.
Macquarie Group Ltd (MQG):
Investment bank Macquarie Group is pushing further into the US, with a purchase of 77 apartments in one block in upstate New York. An affiliate of the bank bought the 77 apartments for $US43.5 million ($56.15m), according to local media reports. The units are in a building known as The Cambium in Larchmont, Westchester County, close to the train line and highway to New York City. The purchase by Northeast Property Owner, affiliated with Macquarie, came at a reported average price of $US565,044 per unit. This is lower than prices listed on the building’s website.
Mineral Resources Limited & Atlas Iron Limited (MIN & AGO):
Mineral Resources managing director Chris Ellison says rebel shareholders in Atlas Iron face being wiped out if they block his company’s $280 million takeover bid. Speaking publicly for the first time since announcing the friendly offer on Monday, Mr Ellison said Atlas faced a bleak future if it continued on its own. There are more than 15,000 individuals on the Atlas register who hold parcels of stock worth less than $500, including 4901 investors with holdings of less than $20. Despite the tiny positions, those shareholders have the power to potentially block the MinRes offer given it requires at least 50 per cent of individual shareholders to approve the offer. Mr Ellison said that combining Atlas’s iron ore business with MinRes’s existing Pilbara iron ore -operations could generate the enlarged company between $180m and $200m a year. The Atlas takeover could also deliver MinRes more than $500m in accumulated tax losses sitting on Atlas’s balance sheet, although Mr Ellison said the possible tax benefits of the transaction was “not even in our thoughts”.
Scentre Group (SCG):
Scentre Group, owner of Westfield shopping centres across Australia and New Zealand, has joined the list of retail property landlords looking to develop major residential projects. The group has submitted fresh plans to overhaul its centre in Hurstville, proposing five new buildings and new levels above the existing complex it co-owns with the Dexus Wholesale Property Fund. The plan would be the local Westfield operator’s first significant move into the apartment sector, aside from a boutique joint venture it is undertaking near its landmark Bondi centre. The plan looks to provide 925 residential units and provide an additional 12,400sq m of retail floor space. The proposal would see a skyline-retail and dining precinct, a residential precinct, a mixed-use precinct for residential and retail use, and a new sky garden.
Sigma Healthcare Ltd (SIG):
Sigma Healthcare will start construction on a $100 million distribution centre in Sydney today, marking the biggest single infrastructure investment in the company’s history. Mark Hooper, chief executive of the pharmacy wholesale and distribution business, which also has the largest pharmacy network in Australia, said the investment was confirmation of the belief the company had in its own strategy. The program is a transformational play by Sigma to fundamentally change its operational efficiency, a move that will help limit the impact of continuing headwinds the business faced. He said while the capacity for growth was in Sigma’s core distribution business that serviced retail pharmacies, there was also future growth in hospitals as the company looked to further expand its footprint in that sector.
South32 Ltd (S32):
Mining heavyweight South32 faces a protracted period of uncertainty over its Cerro Matoso nickel mine in Colombia as it attempts to overturn a ruling by the nation’s constitutional court. Perth-based South32 yesterday confirmed it would appeal the recent decision, which leaves it exposed to a potentially substantial damages bill as well as at risk of losing its environmental licence at the mine, and last night issued a statement detailing what it says was the court’s “mistaken interpretation” in the case. The legal action dates back to 2013 and relates to alleged health and environmental impacts on the seven small communities surrounding Cerro Matoso. The Cerro Matoso mine was one of the better performers within South32’s portfolio in the last half, generating $US41m in earnings before interest, taxation, depreciation and amortisation in the last six months of 2017. That was up from an EBITDA loss of $US4m a year earlier.
Westpac Banking Corporation (WBC):
Westpac has launched a crackdown on declining lending standards in the $1.6 trillion home loan sector, and will start grilling customers on their spending habits for everything from pet insurance to Netflix subscriptions. The move comes as the banking royal commission zeroes in on irresponsible lending and mortgage fraud, and as the banking regulator pushes the sector to be more meticulous when it combs through borrower information. Investment bank UBS estimated there were about $500 billion worth of “liar loans” sitting on books of Australia’s banks, sold to customers who falsified information in order to meet lending criteria. Westpac previously told mortgage brokers it would unleash three global credit agencies to audit borrower credit information as regulators ramp up scrutiny over the lending behaviour of the banking sector. Westpac said it would be “enhancing credit assessments” with agencies Equifax, Experian and Illion to be supplied with all consumer credit customer data from April.
(Source: AIMS)
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