Sharemarket loses ground as oil prices take a hit, Origin takeover vote postponed after receiving revised offer — as it happened
Origin Energy's proposed takeover by Brookfield was delayed until December 4 after receiving a last minute revised offer, but the company's largest shareholder, AustralianSuper, said it would vote against the revised proposal if the board decides to put it to a vote.
Meanwhile, Australia's sharemarket lost ground throughout the day.
Look back on the day's news on our blog.
Disclaimer: this blog is not intended as investment advice.
By Gareth Hutchens
By Gareth Hutchens
That's it for today. Thanks for staying with us.
We'll see you tomorrow for the last day of the trading week.
By Gareth Hutchens
Australia's share market finished on a one-week low today.
Only three sectors managed to gain in value: industrials, technology stocks, and real estate.
By Gareth Hutchens
Trading has finished in Australia for the day, and the ASX200 index has closed down 44.2 points (-0.62%), to 7,209.2 points.
By Gareth Hutchens
Origin Energy's share price has declined noticeably after that news that AustralianSuper will be voting against the revised proposal for Origin.
By Gareth Hutchens
AustralianSuper has issued this statement, in relation to the takeover offer for Origin Energy.
AustralianSuper can today reaffirm that it will reject the last-minute attempts by the Brookfield and EIG-backed consortium to buy more time in its efforts to acquire Origin Energy (Origin).
AustralianSuper will be voting against the revised proposal for Origin, made public by the company board today, if the board decides to put it to a vote.
This latest low-ball offer strengthens AustralianSuper’s view that the offer remains substantially below our estimate of Origin’s long-term value.
AustralianSuper is resolute the value and future value of Origin is better in the hands of AustralianSuper members and other shareholders than a private equity consortium planning to shortchange them.
The Origin board itself has identified that “the transaction appears inferior to the existing scheme" – which was scheduled to be voted on today and was “unlikely” to succeed.
We agree with the Origin board’s position that it has “significant reservations as to the complexity, conditionality and differing value and potential adverse tax outcomes to Origin and shareholders”.
AustralianSuper believes the ongoing energy transition has further enhanced the value of strategic energy transition platforms, such as Origin.
AustralianSuper is a long-term investor in the Australian economy and is open to providing capital to assist Origin as it prepares to transition over the coming decades, while delivering on our purpose to help members achieve their best financial position in retirement.
The challenge facing the nation as we work towards net zero by 2050 is not a lack of capital but rather a shortage of good quality investment opportunities.
AustralianSuper is the largest shareholder in Origin with a stake of over 17%.
By Gareth Hutchens
The Federal Court has ordered Mercer Financial Advice (Australia) Pty Ltd to pay a $12 million penalty after being found to have failed in its fee disclosure obligations and charging fees to customers it was not entitled to charge.
The Australian Securities and Investments Commission (ASIC) has issued a press release with this information:
Mercer was found to have breached sections of both the Corporations Act and ASIC Act over a three-year period from 1 July 2016 to 30 June 2019 when it:
ASIC says the Court found that Mercer’s failures were caused by having inadequate systems and processes in place to ensure that its fee disclosure statements complied with financial services laws.
Mercer was also found to have breached its obligation to provide financial services efficiently, honestly and fairly.
Justice McEvoy noted in his judgment that the "contraventions in the present case were extremely serious. They were large in number, many clients were affected, large sums were involved, and they continued over a long period of time.
"The community is entitled to expect that robust systems and processes will be put in place and maintained in the market for financial services to ensure that conduct of the kind which has occurred in this case does not occur."
Mercer admitted to the misconduct.
By Gareth Hutchens
Commonwealth Bank economist Stephen Wu has circulated a note on inflation.
He thinks the next monthly inflation figure from the ABS (which will be released on Wednesday next week) will show a decline in the annual rate of inflation in October, from 5.6% to 5.2%.
"The next few months will see large falls in the annual rate, as large monthly increases a year ago drop out of the calculations," he says.
"We expect to see further signs of goods disinflation and some temporary disinflationary impacts from government policies on rents and energy. Offsetting this is likely ongoing strength in new housing costs, higher health insurance premiums, and a lift in domestic travel prices."
Here are some details that are driving his forecast for the October monthly inflation number:
If the rate of inflation does fall from 5.6% to 5.2%, that will put it back to where it was in August.
As the graph below shows, the monthly inflation indicator (the light blue line) hit 4.9% in July but it's been creeping up since then.
So the forecast decline in the monthly inflation indicator will put things back on the right track.
By Gareth Hutchens
By Gareth Hutchens
When the ABS says the second stage of its labour force data provides much more detail, here's an example.
This graph shows the number of people who are aged 65 and over who are:
This dataset only begins in 2014, but you can see how the number of people aged 65 and over who are only looking for part-time work has been growing quite noticeably since 2018, and it jumped up to 96,000 people in October.
The rate of growth in people only looking for part-time work has been much faster than people only looking for full-time work.
By Gareth Hutchens
Every month, the Bureau of Statistics releases new employment data, but it does so in two stages.
In the first stage, it releases its headline estimates of employment, unemployment, underemployment, participation and hours worked.
But in the second stage, which comes a week later (and which the media typically ignores) it releases more details for things like industry, occupation, sector, job duration, and retrenchment.
Given the new definition of "full employment" that Treasurer Jim Chalmers and RBA governor Michele Bullock have been talking about, the media will eventually have to start focusing on this second release of data too.
Why?
Because Chalmers and Bullock both say that a more comprehensive measure of full employment should take into account how long it takes unemployed people to find work.
That's known as the "duration of job search," and it can be found in the second release of data which has come out today.
Here's what is looks like in graph form:
It shows that in October, the median duration of job search was 12 weeks, so the median time it's taking people nationally to find work is 3 months.
Notice how that's still much higher than it was in the heady days before the global financial crisis, when it got down to six weeks (in January 2008).
By Kate Ainsworth
The news we've been waiting for all morning has finally been confirmed — Origin is indeed delaying its takeover vote and investor meeting today until December 4 after receiving a revised offer from Brookfield and EIG last night.
Origin said delaying the meeting would allow for more time for the revised proposal to be considered.
The revised offer put forward by the Brookfield-led group of investors would see shareholders offered $9.02.
In its statement to the ASX, Origin also advised that based on the proxy votes from shareholders that had already been received, it was "unlikely" the original takeover offer would have reached the 75% approval threshold by shareholders that the deal needed to go ahead.
The adjournment and revised offer follows the public dispute Origin Energy's largest shareholder, Australian Super, had with the takeover, saying the proposed deal had undervalued the energy giant.
By Gareth Hutchens
AUSTRAC has accepted an enforceable undertaking from Gold Corporation (trading as Perth Mint) to uplift its compliance with Australia’s anti-money laundering and counter-terrorism financing laws.
It relates to the story below.
In a press release this morning, AUSTRAC — the Australian Transaction Reports and Analysis Centre — says it hopes the enforceable undertaking will see Gold Corporation committing sufficient resources to implement its remediation program quickly, or risk further enforcement action.
It says the enforceable undertaking is a "necessary step" to ensure that Gold Corporation addresses its anti-money laundering deficiencies through its remediation program.
The EU binds Gold Corporation to complete the remediation program under enhanced oversight from AUSTRAC and an independent third party expert, with the remediation to be completed by April 2025.
“All businesses enrolled with AUSTRAC must have robust systems in place to ensure they meet their AML/CTF obligations," AUSTRAC acting chief executive officer, Peter Soros, said.
"Businesses like Gold Corporation are the front line of defence in protecting Australia’s financial system from exploitation by criminals."
By Nassim Khadem
Countries at the UN want it to take a greater role in international tax matters.
The Paris-based OECD, which counts 39 mostly rich countries among its members, has spent decades developing rules governing how multinational corporations pay tax.
In 2021, more than 130 countries agreed a landmark deal aimed at curbing corporate tax avoidance by multinationals.
But developing nations have grown frustrated at global tax negotiations and have been pushing for a greater UN role.
Last year, a group of 54 African countries, frustrated at the OECD process, tabled a resolution at the UN general assembly.
While some OECD countries voted against the resolution at another meeting of the UN general assembly on November 22, it was adopted by an overwhelming majority of developing nations.
These developing countries have long complained they get relatively little revenue from the tax reforms compared with richer nations, and that large corporations are still not meeting their tax obligations and continue to use low-tax jurisdictions.
Mathias Cormann, head of the OECD tax area, said in a statement that the organisation was "proud of its record of achieving consensus-based solutions to address tax evasion" and that it remained committed to implementing the global corporate tax deal.
"Building on the widely shared benefits achieved in ending bank secrecy, reducing tax evasion and avoidance and tackling illicit financial flows, we are committed to continue to collaborate with global partners – including at the UN – to strengthen inclusivity and continue to deliver a better and fairer international tax system," he said.
Read more about the beginnings of the global tax deal here:
By Nassim Khadem
ASX 200: -0.4 per cent to 7046.1 points
Australian dollar: -0.1 per cent 65.4 US cents
S&P 500: +0.4% to 4,556.2 points
Nasdaq: +0.5% to 14,265.8 points
FTSE: -0.2% to 7,469.5 points
EuroStoxx: +0.3% to 457 points
Spot gold: -0.1% to $US1,990/ounce
Brent crude: $US81.7/barrel
Iron ore: $US129.84/tonne
Bitcoin: +1.4% to $US37,418
By Nassim Khadem
Australia's share market has opened lower, with most sectors down in early trade despite gains on Wall Street overnight.
The S&P/ASX 200 index fell 0.4 per cent to 7045.3 points, weighed down by losses in the energy sector.
Overnight in New York, the S&P 500 rose 0.4 per cent, coming off three straight winning weeks.
The Dow Jones and Nasdaq increased 0.5 per cent.
Energy stocks fell, tracking an almost 5 per cent drop in the oil price as the delay of an OPEC meeting to later next week dampened expectations that the cartel will move to cut output early next year.
By Nassim Khadem
The Association of Superannuation Funds of Australia (ASFA) has appointed Mary Delahunty as the peak body's new chief executive.
Ms Delahunty will take over as CEO in February.
Leeanne Turner will remain as interim CEO until that time.
Ms Delahunty joins ASFA after founding Seven Advisory, a specialist ESG consultant for institutional investors.
Prior to that she worked as a senior manager for industry fund HESTA.
By Nassim Khadem
Australia's population will increase by 2.5 per cent over 2023, its highest rate since 1952 thanks to a record increase in immigration.
AMP deputy chief economist Diana Mousina says the lift had surprised economic commentators and the government.
"High population growth has added to inflation in 2023 and the stronger-than-expected economic growth and the rebound in home prices," she said in a research note.
While immigration benefits include a more culturally diverse population, she noted that more people can also lead to congestion in infrastructure and schools.
"While the same pace of population growth is unlikely to be repeated in the next few years, the challenging inflation environment and the decline in Australian living standards from negative per capita GDP growth means there is a case for the government to assess its temporary visa intake," she said.
She said demand for housing is also running well above supply.
Housing demand was tracking at about 220,000 per year but dwelling completions, which are indicative of housing supply, would be around 175,000 in 2023, Ms Mousina said.
"Current building approvals which are a sign of future completions are running close to an annualised figure of 160,000 which means the outlook for housing supply remains very challenging, despite the government targets to lift housing supply," she said.
"This housing shortfall will continue to add pressure to the already tight rental market which is clear in ultra-low vacancy rates and high rental growth."
High immigration levels is an offset to an aging population as immigrants tend to be younger, which is positive for inflation over the long-term, but Ms Mousina said can also mask underlying weakness in GDP growth per capita, which is a measure of living standards.
Australia's per capita GDP growth has been negative since the start of 2023, and "high population growth can also add to inflation at a time when the economy is running close to or above its potential, like it has been post-COVID".
The bulk of the lift in the immigration rate comes from people on temporary student and work visas.
Temporary visas are not included in the government's annual permanent migration level of 190,000 but add to demand for housing and consumer goods and services, she said.
For more on this issue read this analysis from business editor Ian Verrender:
By Nassim Khadem
New research from CommBank reveals that more than two in five Australians (44 per cent) are planning to shop the Black Friday/Cyber Monday sales, a figure which jumps to 6 in 10 for Aussies under 40.
The survey of more than 1,000 Australians found that of those planning to shop the sales, 78 per cent are hoping to grab a bargain on essentials, while just over half are planning to buy gifts for others.
According to the research, over 9 in 10 are looking to deals and discounts as a way to help with the cost of living, with more than three in five saying they are keeping an eye out for discounts more than they used to.
Listen to the News Daily podcast about why we fell for Americans' Black Friday sales.
And you can read more about Black Friday sales and the impact on inflation in this story today by me and my business colleague David Chau:
By Nassim Khadem
Trading in Origin Energy has been temporarily paused ahead of an expected formal announcement that the energy giant is delaying the vote on Brookfield's $20 billion takeover offer.
Origin is expected to adjourn today's meeting as the board considers a new offer from suitor Brookfield, after signs that the buyout offer would not be approved by shareholders who had been expected to vote on the deal later today.
Origin is expected to issue a formal statement shortly.
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