WORLDWIDE: HEADLINES
Twitter’s Dorsey leads blockbuster $29 bln buyout of Australian BNPL giant Afterpay
Square Inc (SQ.N), the payments firm of Twitter Inc (TWTR.N) co-founder Jack Dorsey, will purchase buy now, pay later (BNPL)pioneer Afterpay Ltd (APT.AX) for $29 billion, creating a global transactions giant in the biggest buyout of an Australian firm.
The takeover underscores the popularity of a business model that has upended consumer credit by charging merchants a fee to offer small point-of-sale loans which their shoppers repay in interest-free instalments, bypassing credit checks.
It also locks in a remarkable share-price run for Afterpay, whose stock traded below A$10 in early 2020 and has since soared as the COVID-19 pandemic – and stimulus payments to a workforce stuck at home – saw a rapid shift to shopping online.
The all-stock buyout would value the shares at A$126.21 ($92.65), the companies said in a joint statement on Monday.
That means a payday of A$2.46 billion each for Afterpay’s founders, Anthony Eisen and Nick Molnar. China’s Tencent Holdings Ltd (0700.HK), which paid A$300 million for 5% of Afterpay in 2020, would walk away with A$1.7 billion.
“We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles,” said Dorsey in the statement.
“Together we can better connect our … ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”
Full coverage: REUTERS
Allianz cooperating as DOJ probes Structured Alpha Funds
The US Department of Justice (DOJ) has begun an investigation relating to Allianz Global Investors’ Structured Alpha Funds, following litigation pending in U.S. courts on the matter, German insurer Allianz (ALVG.DE) said on Sunday.
Pension funds for truck drivers, teachers and subway workers have lodged lawsuits in the United States against Allianz Global Investors, one of the world’s top asset managers, for failing to safeguard their investments during financial market instability during the coronavirus pandemic.
Market panic around the virus resulted in billions of dollars in losses last year, hitting many investors, but no other top-tier asset manager is facing such a large number of lawsuits in the United States connected to the turbulence.
Allianz said that its Allianz Global Investors unit has received a voluntary request for documents and information from the DOJ and that Allianz is fully cooperating with the DOJ as well as with the U.S. Securities and Exchange Commission.
Full Coverage: REUTERS
WORLDWIDE: FINANCE / MARKETS
Asian shares weighed down by China worries as US earnings shine
Asian shares face another tough week as Beijing’s regulatory crackdown fans fears about China’s economy, though upbeat economic data in the United States and Europe and solid corporate earnings put a floor under their markets.
China’s woes were underlined over the weekend by a survey showing factory activity grew at the slowest pace in 17 months amid rising costs and extreme weather.
In contrast, Europe’s economic recovery outpaced all expectations last quarter, while U.S consumers spent with abandon in June as coronavirus restrictions eased, a trend likely to ensure a strong payrolls report at the end of this week.
“Surging company profits in the US and lower bond yields are providing support, and in any case the rising trend in shares is likely to remain in place into next year as rising vaccination rates allow economic recovery to continue,” said Shane Oliver, chief investment strategist at AMP Capital.
Full coverage: REUTERS
Oil prices slide on worries over China economy and higher crude output
Oil prices fell by more than $1 on Monday on worries over China’s economy after a survey showed growth in factory activity slipped sharply in the world’s second-largest oil consumer, with concerns compounded by a rise in oil output from OPEC producers.
Brent crude oil futures skidded $1.12, or 1.5%, to $74.29 a barrel by 0156 GMT while U.S. West Texas Intermediate (WTI) crude futures dropped 97 cents, or 1.3%, to $72.98 a barrel after slipping to a session low of $72.87.
“China’s been leading economic recovery in Asia and if the pullback deepens, concerns will grow that the global outlook will see a significant decline,” said Edward Moya, senior analyst at OANDA.
“The crude demand outlook is on shaky ground and that probably will not improve until global vaccinations improve.”
China’s factory activity growth slipped sharply in July as demand contracted for the first time in more than a year, in part on high product prices, a business survey showed on Monday, underscoring challenges facing the world’s manufacturing hub.
Full coverage: REUTERS
Dollar holds near one-month low as investors eye US jobs, RBA
The dollar held just above a one-month low on Monday as traders held tight positions heading into a busy week that includes monthly U.S. jobs data and a key Australian central bank decision.
The dollar index , which measures the greenback against six major peers, stood at 92.091, almost unchanged from Friday, when it dipped as low as 91.775 for the first time since June 28.
The index dropped 0.88% last week, its worst performance since early May, after Fed Chair Jerome Powell reiterated mid-week that rate increases were “a ways away” and the job market still had “some ground to cover.”
Fed Governor Lael Brainard echoed those comments on Friday, saying “employment has some distance to go.”
The dollar index last month hit its highest since the start of April at 93.194 as traders positioned for a start to tapering as soon as this year.
Dollar net long positions rose to their highest level since early March of last year in the week to July 27, according to Reuters calculations and the latest data from the Commodity Futures Trading Commission.
Economists in a Reuters poll forecast a 926,000 job increase in July’s non-farm payrolls number, due Friday, which would be the biggest increase for 11 months. The US unemployment rate is forecast to fall to 5.7%, from 5.9% in June.
Full coverage: REUTERS
