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ASX pulls back from record high but BNPL keeps surging on Afterpay deal

The Australian share market pulled back on Tuesday, unable to maintain momentum after reaching a record high on Monday. The ASX could not maintain momentum after yesterday’s fresh paper high, but buy-now-pay-later stocks kept basking in the glow of the Afterpay deal. The benchmark S&P/ASX200 index has repeatedly set new records recently, closing 0.23 percent lower at 7474.5, while the All Ordinaries Index dipped 0.13 percent to 7750.5. It followed a mixed lead from Wall St overnight, when the S&P 500 Index and Dow Jones Industrial Average ended in negative territory as concerns about Covid variants and peaking economic growth outweighed strong earnings results, Ord Minnett said.

“The Aussie share market has been unable to extend its big gains from yesterday,” CommSec analyst James Tao said. “Leading declines are the resources – energy and materials both well in negative territory. “We had oil prices overnight sliding more than 3 percent on concerns of the spread of the Delta variant, of course, and how that may impact future crude demand.” Woodside Petroleum gave up 1.45 percent to $21.82, Santos declined 1.08 percent to $6.42, and its takeover target, Oil Search, retreated 1.25 percent to $3.94.

Afterpay deal

Rio Tinto weakened 0.63 percent to $132.39, BHP fell 1.38 percent to $52.96, and Fortescue backtracked 1.6 percent to $24. The banks also weighed on the market, with ANZ sliding 0.7 percent to $28.01, Commonwealth Bank easing 0.2 percent to $101.45, National Australia Bank dropping 0.79 percent to $26.34, and Westpac shedding 0.92 percent to $24.80. OMG chief executive Ivan Tchourilov said buy-now-pay-later investors were still savoring yesterday’s news of the Afterpay acquisition by US company Square, co-founded by Twitter’s Jack Dorsey.

“The offer is all-scrip, so we’ll be seeing a lot of seesawing in the price of Square Inc and Afterpay while the theoretical offer price bounces around,” Mr. Tchourilov said. Afterpay jumped 11.37 percent to $127.85 after soaring 18.77 percent on Monday. Others in the sector were “still basking in the afterglow”, Mr. Tchourilov said. Zip rose 7.46 percent to $7.78, IOUpay rocketed 27.9 percent to 27.5 cents, and Openpay leaped 8.94 percent to $1.28. Crown Resorts announced Xavier Walsh, the head of its Melbourne casino at the center of the money-laundering scandal, would step down by the end of this month.

During its closing submissions for the Victorian royal commission, Crown also said that a replacement for interim executive chair Helen Coonan would be announced shortly, allowing her to step down from the role she took on in February by the end of this month. Shares in Crown added 1.68 percent to $9.08. Myer lifted 4.17 percent to 50 cents after Solomon Lew’s Premier Investments announced it was pushing ahead to overhaul the department store chain’s board.

Premier, which owns retail brands including Smiggle and Peter Alexander, is Myer’s biggest shareholder but is bitterly disappointed by its performance. The investment group has asked Myer to commit to “allowing an appropriate window of opportunity after the release of the company’s results before calling this year’s annual general meeting”, where it wants a vote on board replacements. Premier said it was in talks with “several highly regarded and well-credentialed independent non-executive directors”.

A Myer spokesman said the company had consistently advised Premier Investments of its willingness to work constructively together, guided by principles including maintaining the independence of the Myer board. Other directions included proportionate board representation with appropriate conflict protocols, ensuring minimal disruption to the business, and “that a change of control does not occur without realizing appropriate value for shareholders”. “While indicating an intention to achieve an independent majority board, Premier Investments has consistently declined to provide any transparency regarding the independent directors to be nominated at the AGM in addition to its two or more Premier Investments representatives,” the spokesman said.

Gemma Broadhurst
I am a writer by profession, and I love to write in my spare time. I am one of the most experienced writer for newspriest. I always make sure that whatever is written on my blog is 100% genuine and true. I am a University of Florida graduate pursuing a Master's degree.

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