Summary
- The ASX 200 fell by as much as 1.7% on Thursday following a renewed selloff on Wall Street overnight. The local banks, miners and tech stocks were hit hard.
- Westpac has announced it will pay a $1.3 billion fine, the largest in Australian corporate history, for breaching anti-money laundering laws
- The Aussie dollar continued its slide overnight and at 10am AEST was at a near two-month low of US70.66c
- NSW residents can now travel to South Australia without needing to self-quarantine after border restrictions were scrapped this morning
ASX trims losses, all sectors still in the red
By Alex Druce
The Australian sharemarket has clawed back a bit of ground but remains about 1 per cent lower on Thursday after a fresh Wall Street selloff overnight.
The benchmark index was down 56.7 points at 5867.2 by 11.30am AEST and earlier slumped by 99.1 points - or 1.7 per cent - in a $30 billion opening dive.
All sectors were still depressed with the banks, miners, tech, and energy firms hit hard.
Biotech CSL was down 1.1 per cent and joined in the red by sector stablemate ResMed, which fell 2 per cent. Fisher and Paykel was a rare gainer, up 0.5 per cent at $30.44.
BHP slipped 0.9 per cent, Rio Tinto 0.8 per cent and Fortescue Metals 0.3 per cent. Gold miner Newcrest was 3.4 per cent lower as precious metals prices continue to fall.
All major banks were lower, with Commonwealth Bank down 1.2 per cent, NAB 0.7 per cent, and ANZ 1.3 per cent. Westpac slipped 0.9 per cent to $16.24 after agreeing to pay a $1.3 billion fine for breaches of money laundering laws - the biggest penalty in Australian corporate history.
The energy sector drooped by a collective 1.3 per cent and tech stocks were 1.7 per cent lower.
Latest updates
Under-fire Cleanaway CEO to forgo performance rights
Cleanaway Waste Management has withdrawn motions from its annual general meeting to grant its under-fire chief executive Vik Bansal about $2.3 million in performance rights.
Mr Bansal has faced scrutiny in recent weeks after the Australian Financial Review revealed he was investigated this year over claims he led a culture of “bullying and harassment”. Mr Bansal has since vowed to do better.
Cleanaway chief executive Vik Bansal. Credit:Eamon Gallagher
Cleanaway on Thursday said Mr Bansal had volunteered to forgo the granting of about 1.08 million shares as performance rights in a “further act of contrition”, following a 25 per cent reduction of his short-term incentives as outlined in Cleanaway’s Remuneration Report.
The company said that reduction was linked to the damage done by the coronavirus pandemic, as well as Mr Bansal's behaviour.
“Cleanaway is committed to doing better as an organisation. While we are disappointed in the events that have led us here, Mr Bansal continues to demonstrate a strong commitment to making necessary change that will be sustainable over the long term,” the firm said in a note.
“This further act of contrition from the CEO is welcomed by the Board. Mr Bansal leads Cleanaway with a passion and dedication that has driven exceptional shareholder returns. Learning from this experience will allow him to take Cleanaway forward in its journey and deliver on its full potential.”
Shares in Cleanaway were last 0.5 per cent higher at $2.14 against a 1.1 per cent decline for the wider ASX 200.
Tesla's 'Battery Day' letdown puts $452 billion stock gain at risk
By Dana Hull, Akshat Rathi and Gabrielle Coppola
Tesla's highly anticipated "Battery Day" fell short of expectations that helped fuel its $US320 billion ($452 billion) surge in market value this year, with Elon Musk outlining grandiose goals that will take time to pull off.
The chief executive officer laid out a plan Tuesday (US time) to build a $US25,000 car and cut battery costs in half over the next three years. While the technology and manufacturing breakthroughs outlined were impressive, Robert W. Baird's Ben Kallo wrote, Tesla's valuation already reflected its ability to disrupt.
Elon Musk had been hyping 'Battery Day' for months, but investors were underwhelmed.Credit:Bloomberg
"With the Battery Day in the rearview, we think there is a lack of upcoming catalysts and are cautious about demand given the recessionary environment," Kallo wrote in a report naming Tesla a bearish "fresh pick."
Tesla shares slumped around 10 per cent on Wednesday. The stock has soared more than 400 per cent this year.
ASX bleeds red in $30 billion opening dive
By Alex Druce
The Australian sharemarket has handed back most of the previous session's gains in a 1.7 per cent opening dive.
The local bourse shed as much as $30 billion from its market cap - having added $42 billion in Wednesday's rebound rally - thanks to a weak Wall Street lead.
The ASX200 was down 1.6 per cent at 5831.3 after 15 minutes of trade on Thursday. All sectors were lower, and just nine companies had added to their tally, with the materials, financials, and tech stocks badly hurt.
At the top end of the market, CSL was 1.2 per cent lower, BHP fell 1.5 per cent, Rio Tinto 1.2 per cent, and Fortescue Metals 1.1 per cent.
Westpac initially led losses for the big banks after agreeing to a $1.3 billion fine, the largest in Australian corporate history, for breaching anti-money laundering laws. Its share price was 1.8 per cent lower at $16.09 and earlier dipped as low as $16 flat.
Commonwealth Bank fell 1.2 per cent, NAB 1.6 per cent, and ANZ 1.8 per cent. Macquarie Group dropped 1.6 per cent.
The tech sector lost a collective 1.9 per cent with Afterpay down 3.5 per cent at $75.99.
Brickworks lifts dividend as WHSP stake delivers
Brickworks has nearly doubled its full-year profit to $299 million and lifted its final payout, helped by a significant one-off boost from its stake in Washington H. Soul Pattinson, triggered by the merger of its associate TPG with Vodafone.
Excluding the impact of the $244 million gain from the TPG deal, and a range of other significant items and discontinued operations, Brickworks’ underlying profit was $146 million for the 12 months to July 31, down 38 per cent.
Brickworks managing director Lindsay Partridge.Credit:Wolter Peeters
Although underlying earnings were lower than the prior year, the firm said it was pleased with its performance across most businesses.
“Another strong contribution from property was a key feature of the result,” Brickworks told investors on Thursday.
“In addition, the building products businesses in Australia and the United States delivered strong operational performance, considering the significant disruption caused by COVID-19, and the associated impact on building activity.”
Directors declared a fully franked final dividend of 39 cents per share, an increase of 1 cent on a year ago. This brings the full-year dividend to 59 cents, up by 2 cents.
The dividend will be paid on November 25.
Brickworks’ earnings from investments was down 51 per cent to $51 million for the year, mainly due to the impact of lower coal prices on New Hope Corporation.
Cash dividends totalling $56 million were received from WHSP during the year and the market value of Brickworks shareholding in WHSP was $1.844 billion at July 31.
Since then, the value has increased by 17 per cent and now stands at $2.149 billion.
Shares in the firm fell more than 2 per cent at Thursday's open to $18.39.
How Westpac's record-breaking fine compares to others
By Charlotte Grieve
Westpac's $1.3 billion fine is the largest civil penalty issued in Australian corporate history, dwarfing all other fines handed down for misconduct.
Here's how the penalty compares to others:
1. Commonwealth Bank
CBA was fined $700 million in 2018 by AUSTRAC for breaching anti-money laundering laws 53,506 times after its uncapped cash-deposit machines allowed drugs and arms dealers to clean their cash.
The board must have been rethinking the choice to call those machines "intelligent deposit ATMs". But it pales into insignificance when compared to Westpac's 23 million breaches of the same Act.
2. Volkswagen
The German carmaker best known for its Golfs was fined $125 million by the Australian Competition and Consumer Commission (ACCC) for misleading consumers about its diesel emissions.
3. NAB
The Federal Court imposed a $57.7 million penalty this year on NAB after it admitted to misleading, false and deceptive conduct for charging $117 million worth of fees to superannuation fund members for services that were never provided.
4. Tabcorp
Again stung by AUSTRAC, the betting giant coughed up $45 million for breaking anti-money laundering laws after failing to alert regulators to reports of suspicious customers on 108 occasions over more than five years.
5. Visy
Packaging giant Visy was fined $36 million for engaging in a four-year price-fixing and cartel scheme with packaging rival Amcor, which is understood to have increased Visy's market share from 47 per cent to 55 per cent over a number of years and affected 90 per cent of the $1.8 billion cardboard box market.
6. ANZ, NAB
ANZ and NAB were each fined $10 million by the Federal Court in 2017 after the banks were found to have attempted to engage in unconscionable conduct in attempting to manipulate the Bank Bill Swap Rate - used as a benchmark for the pricing of many commercial products - to benefit their institutions' trading positions.
7. Westpac
Westpac was fined $9.15 million in 2019 after the Australian Securities and Investments Commissions (ASIC) found one of its financial planners, Sudhir Sinha, had breached the Corporations Act 22 times. The planner provided improper advice and failed to act in the best interests of clients and Westpac was found to have not properly supervised or monitored him.
8. State Street
Global investment giant State Street was fined $1.25 million this month for failing to report information related to its international payments, breaching anti-money laundering legislation. State Street insiders said the regulator was making an example out of them as the company had self-reported the issue and was quick to fix its systems.
9. MoneyGram
Cash transfer service MoneyGram was hit with two AUSTRAC fines in 2015 that totalled close to half a million dollars ($459,000). Both fines were for providing money remittance services through unregistered remittance businesses, and at the time were described as the largest fine handed down by AUSTRAC since it was set up in 1989.
10. RIA Financial Services
The money transfer company was fined $225,600 by AUSTRAC in 2017 for failing to have all its affiliates registered with the regulator and for continuing to provide services through businesses not registered as Ria affiliates. Then-AUSTRAC chief executive John Schmidt said at the time: "The money remittance sector is recognised internationally as being particularly vulnerable to exploitation by criminals."
Afterpay names new CFO
Afterpay chief financial officer Luke Bortoli is leaving the role after three years and will be replaced by Rebecca Lowde, the boss of digital marketing company Salmat. Ms Lowde will start in the position on October 6.
Mr Bortoli will remain employed with the business to assist with the transition to Ms Lowde, particularly in the lead up to Afterpay’s half-year 2021 financial results.
Afterpay's Luke Bortoli is leaving the CFO role after three years. Credit:Dominic Lorrimer
In a release, Afterpay said Mr Bortoli played a critical role as it transitioned from a small-cap start-up to a globally recognised market leader in the buy now, pay later sector.
“Luke has made a transformational contribution to Afterpay in its highly crucial years," Afterpay CEO and Managing Director Anthony Eisen said.
Ms Lowde has been the Chief Executive of ASX-listed Salmat for three years and prior to that was group CFO for three years.
She was also an executive director and group CFO of ASX200 fintech firm Bravura for over five years and has previously held senior roles primarily in the fintech sector including seven years at Oracle Corporation.
Afterpay has also appointed Meahan Callaghan as its chief people officer and Mark Teperson has joined the business as chief strategy officer.
Sonic salaries to shift
By Emma Koehn
Pathology operator Sonic Healthcare has told investors it has taken a cautious approach to executive salaries in the face of the pandemic and made changes to incentives schemes after the business received a first strike against its remuneration report last year.
In its annual report released last night, the $16 billion testing business highlighted that despite pauses to its operations throughout the pandemic, it had also facilitated 6 million COVID-19 tests and has managed to take a leading role in testing in the US market, an opportunity it sees as long term.
Sonic managing director Colin Goldschmidt received total remuneration of $4.4 million this year, down from $6.2 million last yearCredit:Louie Douvis
The company received a vote against its remuneration report last year of more than 26 per cent, however, leading it to explain in detail how it was changing pay structures longer term.
Managing director Colin Goldschmidt received total remuneration of $4.4 million this year, down from $6.2 million last year as the decision was made to pay out 25 per cent of short term incentive targets.
For 2020, long term incentive targets will be paid out as 70 per cent cash and 30 per cent shares. From next year, the managing director’s salary will be shifted so a greater proportion, 40 per cent, is focused on long term rather than short term incentives.
Sonic shares closed at $33.91 on Wednesday, having dropped as low at $21.67 when shutdowns first hit pathology volumes.
Victoria records 12 new virus cases, two deaths
Today's figures are in and Victoria has recorded 12 new coronavirus cases, down from 15 yesterday.
Melbourne's 14-day rolling case average has dropped further to 26.7.
Sadly, two more Victorians have lost their lives.
Premier Daniel Andrews confirmed more lockdown restrictions will be eased this weekend, beyond those he previously flagged, after declaring the Victoria is winning the battle against coronavirus.
Meanwhile, NSW residents can now travel to South Australia without needing to self-quarantine after border restrictions were scrapped this morning.
Rating changes
Rating changes, via Bloomberg
- AusNet (AST): Cut to Sell at Morningstar
- Domain Holdings (DHG): Cut to Sell at Morningstar
- OceanaGold (OGC): Cut to Outperform at Raymond James; PT $C4
- Resolute Mining (RSG): Raised to Buy at EL & C Baillieu; PT $1.32
- Service Stream (SSM): Raised to Buy at Bell Potter; PT $2.30
- Treasury Wine (TWE): Raised to Outperform at Credit Suisse; PT $12.30
Ex-dividend: Ebos, Fonterra
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2020-09-23 23:54:00Z
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