ASX futures higher; gold, oil, iron ore prices soften


  • ASX futures up 0.3% or 18 points
  • Commodities soften with spot gold -0.1% to $US1902.05 per ounce, brent crude -1.6% to $US41.77 a barrel and WTI crude down nearly 2% to $US39.85 a barrel
  • Iron ore -3.6% to $US115.60 a tonne

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Bored of the same old boards

By Sarah Danckert

Investors and shareholders have long had a sneaking suspicion that a “club” exists when it comes to choosing ASX listed directors. Now it appears there is proof.

Amid the reluctant (and limited) bloodletting at Crown Resorts’ annual meeting last week, the board ructions at Boral and the looming annual meeting season, large investors are becoming increasingly fed up with the lack of talent on boards of ASX-listed companies.

The same Davids, Peters and Johns (and a few Susans) are finding their way onto boards of major listed companies over and over again, leading to new calls from powerful advisory groups for yearly elections of directors rather than the current system in which directors stand for re-election every three years.

Ownership Matters found Australian company directors are drawn from a small pool of people, which may not have the skills necessary to get the best out of companies.
Ownership Matters found Australian company directors are drawn from a small pool of people, which may not have the skills necessary to get the best out of companies. Credit:Shutterstock

A landmark report by governance advisory group Ownership Matters has reviewed all director appointments to ASX300 companies since 2005 and found directors are frequently sourced from the same pool of directors and often are not up to the job.

While gender diversity has improved considerably — women now make up 30 per cent of board positions — the rate has flatlined. At the same time, the club effect has carried over to female board representation, meaning the same women are favoured for board roles rather than new blood.

Ownership Matters co-founder Dean Paatsch says it’s up to investors to pull their weight if they want more competition and greater accountability from the non-executive director labour force.

“There is a huge performance dividend waiting for the Australian economy if we have the most competent boards possible deploying the capital of Australian investors.”

Read the full article here

Markets poised for a Democrat victory

By Kyle Rodda

Sponsored by IG Markets

Market participants remain on edge heading into the final week of the US election campaign. The markets are still positioned for a Biden victory, with an increasingly likely Blue-wave that would see the Democrats control both houses. Traders are still pricing in heightened volatility and a meaningful, albeit narrower, chance of a contested election result. The dynamic is keeping global equities volatile, with the benchmark S&P500 dipping -0.54 per cent last week.

US stimulus

Sentiment continues to swing on speculation about US fiscal stimulus. Congressional Democrats and the White House are reportedly moving closer to a deal, with the Trump administration upping its offer last week to nearly $US1.9 trillion ($2.7 trillion) – closer to the Democrats desired $US2.2 trillion. Despite the progress, the market remains sceptical on whether a package will arrive before the election.

US earnings

Corporates across the S&P500 continue to outperform market expectations. Of the 134 companies that have reported, 85 per cent of firms have beaten analyst estimates – well above the historical average of approximately 72 per cent. Forecasts for EPS growth across the index for the quarter also improved last week to -16.5 per cent, up from -21.5 per cent at the start of the reporting period. Arguably, the biggest week for US earnings comes in the week ahead, with the likes of Apple, Amazon, Microsoft, Facebook and Alphabet reporting 3Q results.

The virus

The US recorded its biggest one day jump infections during the week, with over 80,000 new cases reported being recorded in the one day. The big concern for the market, however, has proven the deteriorating situation in Europe.

Central banks

The European Central Bank, the Bank of Japan and Bank of Canada all meet; and although market expectations point to policy settings remaining on hold for each, interest will be in the economic guidance, and telegraphing of expanded stimulus in the future. This dynamic will be most pertinent for the European Central Bank, with market participants anticipating the central bank will expand its Pandemic Purchasing Program in coming months.

Local markets

SPI Futures are indicating a slight lift in the ASX200 to begin the trading week. It follows a flat performance for the index last week, which saw it shed a modest -0.16 per cent. The market map was topped by a 1.8 per cent gain in IT stocks, with market-darling Afterpay surging above $100 per share for the first time. In the week ahead, quarterly CPI numbers highlights the economic calendar. It’s expected to show headline inflation jumped 1.5 per cent for the quarter, following last quarters -1.9 per cent contraction.

Listen to the Short Squeeze, our weekly markets podcast produced in conjunction with IG here .This column was produced in commercial partnership between the Herald, The Age and IG. Information is of a general nature only.

Good Morning

The start of another week! Welcome to the Markets Live blog.

Your editor today is Lucy Battersby.

This blog is not intended as financial advice.

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