The ASX was higher today. The S&P/ASX200 gained 25.40 points or 0.35% to 7,336.50. Over the last five days, the index is virtually unchanged but is currently 3.06% below its 52-week high.
The top-performing stocks in this index were InvoCare Ltd and Coronado Global Resources Ltd, up 5.94% and 4.81% respectively.
InvoCare was nearly 6% higher today, following a 1.8 billion takeover bid from TPG Capital.
The funeral provider's board urged shareholders to back the revised bid, which TPG has cut from $13 to $12.70 cash a share, saying it still represents a “significant premium”.
TPG is InvoCare’s biggest shareholder. It indicated it was lowering its offer after finalising its due diligence.
The cash consideration represents an implied equity value of $1.8 billion.
“The transaction represents a significant premium of 42% to InvoCare’s undisturbed closing share price,” InvoCare chairman Bart Vogel said.
He added that it implied a transaction multiple of 18 times last year’s earnings."
Looking at the sectors, Financials was the best performed at 1.25% higher, while Communication Services was 0.84% higher. Health Care and Real Estate were the biggest losers down 0.95% and 0.68% respectively.
China deflated
China's monthly CPI data has confirmed the country is now in a period of deflation.
CPI fell 0.3% on-year versus a 0.4% fall expected.
Here’s eToro analyst Josh Gilbert’s take.
"China’s economy showed further signs of weakening today as consumer and producer prices declined in July. The region is now experiencing deflation, with subdued consumer spending, a property slump, and falling demand.
“This reading, alongside yesterday’s trade data, puts more pressure on the PBOC to stimulate the economy. The silver lining to this bad news is that this might be enough to prompt a response from policymakers in China. More meaningful support is key for keeping China on track for its 5% growth this year.
“The worry for investors is that the effect of deflation in the world's second-largest economy has global repercussions. Close to home, Australian miners could see some hardship if a period of deflation prolongs, given it would drive China’s demand for raw materials down, amongst other areas such as energy and even Australian-grown produce.
“A rebound in inflation is expected to occur next month, but the current CPI reading is far from the target rate of 3% and will only weigh on China’s economic struggles of late."
Five at five
The S&P/ASX Small Ordinaries (XSO) was down 0.19% on a slow news day.
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