Asia may follow US leads lower today

<p>Asian markets are set for large declines after a very disappointing overnight trading session in the US. The lack of confidence from the U.S. Fed’s […]</p>

Asian markets are set for large declines after a very disappointing overnight trading session in the US. The lack of confidence from the U.S. Fed’s meeting and downward revision to growth expectations was enough to prompt more fear in equities.

Meanwhile, Moody’s cut their rating for Bank of America and Wells Fargo, prompting large declines in financial shares. While Asian banks have their own asset and funding exposure, they aren’t immune from the deteriorating global picture and fear of contagion. Financials are likely to lead markets lower across the region in Asian.

In Australia, Fosters will most likely fall to SABMiller after a revised takeover offer of $5.10 cash per share, plus 30 cent capital return and dividend. For those trading shares today, the offer price implies $5.40, dividend already ex. The multiple looks generous in the absence of another bid.

Australia’s largest brick manufacturer Brickworks has reported a $101m normalised earnings number, slightly below market expectations of $110m. Full year dividend is also slightly below expectations. Earnings in the building products business were 21% lower, highlighting the economic headwinds.

The Reject Shop has announced the successful re-commissioning of its Ipswich distribution centre, in time for the upcoming Christmas trading period. A slight positive for the retail, which has faced several adverse one-off factors in recent months.

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.