ANZ announced the divestment of its Life Insurance business for $2.8bn.
We see the transaction as incrementally positive for ANZ and maintain the holding, along with NAB & WBC in our ASX 50 model.
CBA and Suncorp remain our preferred short banking/insurance exposure.
ANZ
Unibail-Rodamco (Europe’s largest listed commercial property company) has entered into an agreement to acquire all the outstanding shares in WFD.
The offer consideration is equivalent to $10 per share and represents +17.8% premium to the last close.
Westfield Corp
BHP & WPL remain in our ASX50 model portfolio. We continue to expect buying support in both names.
IFL has caught our attention again after yesterday’s strong price performance following a number of research houses upgrading the earnings outlook.
The upgrades are supported by aggressive cost savings, post the acquisition of the ANZ advice business.
We’re not convinced IFL is a long-term buy and hold but with the recent upgrades we may see buying momentum create another leg higher in the “higher low” price formation.
We recommend running a stop loss below the recent low.
If we assume FY18 NPAT of $440m, (up 4% on FY17), and $0.12 per share in dividends, Medibank Private is now 20x FY18 earnings on a forward dividend yield of 4.3%.
Medibank continues to drive industry wide reforms, although growth appears limited due to ongoing affordability concerns.
We recommend selling at the money covered call options into June to enhance the yield, whilst keeping exposure to the March dividend.
Aurizon has made a lower high formation and we feel the recent rally from $4.75 to $5.30 will run into selling pressure.
The S&P ASX 200 Index finished the week 0.08% higher.
The best performer was the Telecoms sector, up 7.0% (Telstra rising by 7.9%) and the worst performer was the Industrial sector, down 1.3%.
XJO Index
Our Algo Engine generated a buy signal in Lendlease back in October. Since then the stock has moved down to find buying support at $15.50.
LLC is in the ASX 50 model and we expect buying support will soon see the share price recapture $17 in the weeks ahead.
Place a stop-loss order on a break back below $15.50.
Lendlease
Our Algo Engine generated a buy signal in Westpac on the recent “higher low” chart formation.
Place a stop-loss on a break back below $30.50 with an upside target $33.00
Westpac
We consider BHP a preferred holding within the ASX 50 model portfolio.
The Algo Engine generated a buy signal on May 5th at $22.60.
With both oil and iron ore prices remaining well supported, BHP should continue to find buying interest.
Consider a stop-loss below $25.00 and sell $29.50 March call options to enhance the yield.
BHP
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