Welcome to Monday and the start of a new week. Here are the five things I'm looking at today on the Australian sharemarket.
- The S&P/ ASX 200 Index (Index: ^AXJO) (ASX: XJO) has opened down 0.7%, following the lead of Wall Street on Friday. The Dow Jones Industrial Average closed down 0.4%, while the broader S&P 500 lost 0.6%. The culprit is weak China industrial output growth . August data was the weakest since the global financial crisis, and suggests China is slowing faster than expected.
- Steel maker and iron ore producer Arrium Ltd (ASX: ARI) ex-OneSteel is raising $754 million from investors by way of a renounceable rights issue and a smaller placement. The company says the funds will be used to pay down debt. The company notes that the iron ore price has fallen to five-year lows, and "there is increased uncertainty over the extent and timing of recovery". That assumes the iron ore price will recover off course, and not fall further.Shares in Arrium will be suspended whilst the institutional offer and placement are undertaken. But with the new shares being offered at 48 cents, a large discount to the last traded price of 65 cents, shares are likely to sink when the company resumes trading.As far back as February 2013, we were warning investors that we weren't interested in the company. At the time, Arrium's shares were trading at around $1.25, roughly double the current price.
- Foxtel is reported to have considered a joint takeover bid for troubled free-to-air broadcaster Ten Network Holdings Limited (ASX: TEN), according to the Australian Financial Review (AFR). Foxtel is jointly owned by News Corporation (ASX: NWS) and Telstra Corporation (ASX: TLS). The AFR says the deal would've sparked controversy, with concerns Ten would've gained too much power, particularly in markets such as sports broadcasting rights.That may not be the end of the speculation over Ten either. It almost feels like a fait acommpli that Ten will merge or be taken over.
- Tweet of the Day.
Fnancial services company #Van Eyk is preparing for voluntary administration after disastrous chain of events #ausbiz https://t.co/P1GUSYom1w
Financial Review (@FinancialReview) September 14, 2014
There's a lesson here – If you're investing in a managed fund – make sure you know exactly what assets you're investing in. Or, even better, do it yourself and save on management fees. - Stock of the Day – brought to you by Mark Woodruff – Telstra Corporation Ltd (ASX: TLS). Telstra is conducting an off-market buyback of shares. Mark outlines the risks and benefits for those wanting to participate.
