M&A in spotlight, ANZ in talks to buy MYOB, Regional Express eyes Cobham: ASX down 0.2% at noon

Australian stocks have lacked conviction today, shuffling above and below the flat line as investors weigh up the prospect of an aggressive rate hiking path to combat multi-year high inflation. M&A talks have also taken the spotlight after speculation around ANZ Bank’s talks to buy MYOB was confirmed while investors await news from Regional Express Airways. 

At noon, the S&P/ASX 200 is 0.2 per cent or 10 points lower at 6,596.

Investors are expecting the highly anticipated US consumer price index print to reset fresh 40-year highs at 8.8 per cent year-over-year. Concerns are mounting that the next inflation print will reinforce the Federal Reserve’s need to unveil a 75 basis point hike after stronger-than-expected jobs figures last week cemented the strength of the economy.

Oil prices extended losses as the demand outlook weighed after the World Health Organisation warned governments to take steps to curb the spread of Covid-19. The new wave has been growing since the end of May, with Europe reporting a rise in cases. Other news that has captured investor attention was from Heathrow Airport, which has imposed travel caps. This is intended to quell travel chaos, given jitters around Shanghai going into another lockdown. However, energy traders shrugged off the OPEC report which flags that demand is quickly outgrowing supply. 

In a mixed performance, energy stocks are leading the declines by 1.1 per cent while information technology is up by 1.1 per cent.

Zip Co (ASX:ZIP) has returned almost half of yesterday’s gains, trading 2.8 per cent lower at 52 cents after the merger deal with Sezzle was abandoned. The buy-now pay-later company is also the worst performer in the ASX 200. Meanwhile, Megaport (ASX:MP1) is up 5.9 per cent to $6.51 as the best performer.

Airline stocks have taken off on the ASX in the wake of US-based American Airlines expecting second quarter revenue to peak at 2019 levels. Qantas (ASX:QAN) has moved higher by 3.9 per cent to $4.40 and has made it to second place on the ASX 200 leaderboard.

Meanwhile, Regional Express (ASX:REX) has entered into a trading halt. The news comes on rumours that the airline is looking to buy Cobham Aviation’s Fly-in-Fly-out operations. Shares last traded at $1.22.

Coal prices continue to build on gains, with Whitehaven Coal (ASX:WHC) up 4.3 per cent to $5.38, and Coronado Global Resources (ASX:CRN) and Terracom (ASX:TER) both adding over 3 per cent, and Stanmore Resources (ASX:SMR) trading 0.3 per cent higher at $1.80.

Weakness in the iron ore price has pulled BHP Group (ASX:BHP) lower by 1.2 per cent to $37, while Rio Tinto (ASX:RIO) is down 1.1 per cent to $94.37 and Fortescue Metals Group (ASX:FMG) is trading 0.6 per cent lower at $16.79.

Elsewhere, the nation’s third-largest bank, ANZ (ASX:ANZ), has confirmed it has been in talks with Kohlberg Kravis Roberts & Co about a potential acquisition of MYOB. The news pushed the share price down by 1.5 per cent to $22.37, leading the major banks lower. However, Macquarie Group (ASX:MQG) rebounded, up 1 per cent to $169.31.

Company news

KMD Brands (ASX:KMD) has unveiled a record performance in Kathmandu’s key winter promotional period, strong retail and wholesale sales in Rip Curl and production improvements at Oboz following Covid-19 factory closures. Shares are trading 1.5 per cent higher to $1.02.

BNK Banking Corp (ASX:BNK) is set to reward investors with a 34 cents special dividend payout. The distribution is linked to the sale of its Finsure business to MA Financial late last year. BNK is also reporting record volumes in total lending settlements of $120.7 million for June, a 52 per cent jump year-on-year while total deposits grew by 11.5 per cent at $98.8 million. Shares are trading 13.7 per cent higher to $1.08.

Paradigm (ASX:PAR) as an NFL Alumni Health member has entered into a research partnership to inform NFL Alumni members about osteoarthritis and potential clinical trial participation. Shares are flat at $1.05.

Imugene (ASX:IMU), a clinical stage immuno-oncology company, announces new data from non-small cell lung cancer patients in the Phase I IMPRINTER trial has been selected for a poster presentation at the IASLC 2022 World Conference on Lung Cancer taking place in-person and online from 6-9 August 2022 in Vienna, Austria. Shares are trading 3.1 per cent higher to 23.2 cents.
 
Commodities and the dollar

Gold is trading at US$1728.24 an ounce.
Iron ore is 7.2 per cent lower at US$105.80 a ton.
Iron ore futures are pointing to a fall of 1 per cent.
One Australian dollar is buying 67.60 US cents.