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ASX 200 (XJO) morning report – takeovers galore

The S&P/ASX 200 (INDEXASX: XJO) is expected to open higher on Tuesday according to the Sydney Futures Exchange. Here’s your daily ASX morning report.

ASX 200 share market recap

The ASX 200 managed to eke out a sixth-straight day of gains, finishing 0.5% higher to start the week. The ASX banking sector experienced a late rally, adding 1.2% with ANZ Banking Group Ltd (ASX: ANZ) the leader.

But it was the technology sector that stood out, albeit for different reasons to usual. I highlighted the ‘buyer’s market’occurring on the ASX on the weekend and just one day later, Link Administration Services Ltd (ASX: LNK) received an unexpected takeover offer from private equity groups PEP and Carlyle Group at a price of $5.20 per share. Link shares rallied 25.1% as a result.

The offer excludes the oft-spoken about PEXA property settlement platform, with some shareholders already suggesting the offer ‘undervalues’ the business. With the company clearly in play, my view is to watch this space and look for an outright offer for the PEXA platform.

Takeovers galore, energy on the nose

Sticking with the takeovers, mid-cap software provider Bravura Solutions Ltd (ASX: BVS) announced the acquisition of Delta Software, a UK-based pension administration firm, for $41 million as the company seeks to expand its British operations. Bravura shares added 8.9% on the news.

Aware Super, formerly First State Super, increased its bid for Opticomm Ltd (ASX: OPC) to $6.50, usurping the offer made by Uniti Group Ltd (ASX: UWL) and sending Opticomm shares another 9.1% higher. The owner of fibre connection communities and housing estates is seeing incredible interest.

Whitehaven Coal Ltd (ASX: WHC) was among the weakest on Monday, falling 5.7% on the unexpected announcement that Australian coal may be cut from Chinese steel mills. Meanwhile, Cooper Energy Ltd (ASX: COE) offset an energy price fall, remaining flat, after announcing it had become Australia’s first domestic carbon-neutral gas producer.

Finally, embattled vertically integrated financial advisory firm Evans Dixon Ltd (ASX: ED1) announced a name change to E & P Financial Group.

Nasdaq delivers best day in a month

US markets have delivered their fourth straight day of gains and one of the biggest one-day rallies in months, the S&P 500 and Nasdaq finishing 1.6% and 3.1% higher, respectively.

Two of the biggest names in the index are driving this rally, with Apple Inc. (NASDAQ: AAPL) set to unveil a new 5G iPhone overnight as it embraces the new technology. The Apple share pricing gained over 6%.

Amazon.com Inc (NASDAQ: AMZN) on the other hand is running its ubiquitous Prime Day, during which it offers huge discounts. Amazon shares finished over 4% higher, taking the tech rally to 75% since the March bottoms.

Markets are still holding out hope for stimulus. Several major banks are set to report tomorrow, including JP Morgan(NYSE: JPM) and Blackrock (NYSE: BLK), which will provide an insight into the health of the economy. This tech-driven recovery is once again showing the risk of ‘generalisations’ in markets.

This article was written by Drew Meredith, Financial Adviser and Director of Wattle Partners. To get in contact with Drew, click here to visit the Wattle Partners website.

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Low fees? Check.

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Disclosure: At the time of publishing, Drew owns shares of Link Administration and Cooper Energy.

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