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An average start to the day's trading turned ugly around lunchtime as selling in the big banks and miners intensified, while energy stocks were whacked by a fall in the oil price.
The ASX 200 ended the session down 43 points of 0.8 per cent at 5464 after climbing above 5500 points on Friday for the first time in three months.
The major lenders fell through the session to all end around 1.2 per cent down.
Brent oil eased a little further to $US47.17/tonne following a sharp fall on Friday night as traders eye Wednesday's OPEC meeting. Energy was the worst performing sector, down 1.9 per cent as a group as Woodside dropped 2.3 per cent.
BHP was off 2.6 per cent, while Rio was also sold down 1.2 per cent despite continuing strength in the iron ore price, which helped Fortescue gain 1 per cent. Based on futures trading in China, looks like iron ore will breach the $US80/tonne mark when the spot price is set this evening.
While rising metal prices may not have done much for mining shares today, currency traders took note, pushing the Aussie dollar up 0.3 of a US cent to 74.75.
Metcash jumped 4.3 per cent after the company reported half-yearly earnings, while Woolies fell 1 per cent and Wesfarmers was off 0.1 per cent.
Among the worst performers was Amcor, which slipped 3.9 per cent 3.9 per cent following an analyst downgrade.
The red-hot metals rally continues to sizzle: Chinese steel futures jumped over 6 per cent to the highest in 31 months, as investors raised bets that strong property and infrastructure investment will sustain demand in the world's top consumer, spurring a similar rally in iron ore and zinc.
The rally in steel is bound to push iron ore above $US80 a tonne for the first time since October 2014, having lifted zinc to a nine-year high.
The rapid rise in ferrous metals as well as zinc and lead also reflect a rotation of funds away from fixed-income and into risky assets backed by optimism over global growth into 2017, analysts say.
Strong property sales in China along with the government's push for more infrastructure projects via its public-private partnership fund have strengthened steel demand while supply is under control as Beijing intensely pursues capacity cuts, said Daniel Meng, analyst at CLSA in Hong Kong.
"In the first half of 2017, we will continue to have very strong steel prices because property sales remain very strong at least till October and PPP programme is still in early stage and supply side should remain controlled," said Meng.
Construction steel product rebar on the Shanghai Futures Exchange rose as much as 6.4 per cent to 3238 yuan a tonne, its loftiest since May 2014. Rebar has gained nearly 90 per cent this year, on track to end a six-year slide.
China's real estate investment growth quickened in October to its highest since April 2014, suggesting developers have yet to be hit by measures to curb speculative home purchases. China's many infrastructure projects include a 247 billion yuan railway plan between Beijing, Tianjin, and Hebei, to integrate the three areas into a mega-city.
Iron ore futures also strengthened, with the most-traded contract on the Dalian Commodity Exchange rising as far as 630.50 yuan per tonne, up nearly 6 per cent.
That could push the spot iron ore to well above $US80 a tonne, traders say, as buyers seek more high-grade material to cope with high coking coal prices. Iron ore for delivery to China's Qingdao port climbed 3.5 per cent to $US79.61 on Friday, just off the two-year high of $US79.81 on November 11, according to Metal Bulletin.
Zinc, used to galvanise steel, powered to a nine-year high on the London Metal Exchange and hit a six-year peak on the Shanghai Futures Exchange. Lead was swept up in the rally, charging to a five-year high, after a three-year decline.
While zinc is also benefiting from the better outlook for Chinese infrastructure projects, the rally also reflects increased risk appetite as the world looks to growth next year.
"There's a big rotation out of fixed income. That's huge money and it needs to find a home," said Daniel Morgan at UBS in Sydney.
"The world is looking more like it's on a growth footing," he said, citing a Republican-controlled US Congress and a leadership reshuffle in China that may lead to policies supportive of growth.
"For those reasons you've probably had a big shift in sentiment towards a growth stance rather than a yield stance," said Morgan.
One of the few sectors to post gains today was gold, as the precious metal recovered a bit from the selloff of the past weeks.
Gold rose about 1 per cent today to $US1194 an ounce, recovering from a 9-1/2 month low in the previous session, as the US dollar extended losses.
Goldman Sachs, "No longer the Commodity Bears", upgrades Regis Resources (RRL) to Neutral from Sell #ausbiz #XJO #stocks #gold #investing
— Rudi Filapek-Vandyck (@Filapek) November 27, 2016
"A slightly weaker US dollar saw gold prices recover some of the losses achieved earlier in the week. Buying also emerged as prices hit a key technical level," ANZ analysts said in a note.
The metal has fallen about 7 per cent so far this month on the back of a strong US dollar and surging bond yields as investors bet that US President-elect Donald Trump's policies will spur growth and inflation.
As speculation swirls around whether OPEC will manage to strike a production cut deal on Wednesday, investors are bracing for the worst and expect a sharp selloff in energy stocks should a deal fail to emerge.
Energy shares are down about 1.8 per cent today, trailing an uncertain brent crude price which was trading down 0.3 per cent to $US47.11 a barrel.
Presently the market is evenly split over whether the oil cartel will reduce output by between 500,000 and 1 million barrels per day.
"There will be a very clear selloff if a deal doesn't get made," says Romano Sala Tenna, portfolio manager at Katana Asset Management. "People know if OPEC doesn't do a deal, all the short term drivers for the oil price will be off the table."
This will leave investors with the medium-term proposition; where the supply and demand equation needs to grind back into balance.
#Short selling in the #ASX energy sector increased 42% since October 27th. $1.44B of funds short #WPL #OSH #CTX #ORG #STO #ausbiz pic.twitter.com/daOx2NiPKa
— Matt Felsman (@mattfelsman) November 27, 2016
Over the last two and a half years, between 15 and 20 per cent of of oil capital expenditure has reduced, which will ultimately put a squeeze on supply at some point.
"But there's going to be quite a wait before that happens, so if there's no deal on Wednesday, all the hot money is going to move swiftly out of stage door left," said Sala Tenna.
Woodside Petroleum, Australia's largest oil producer, enjoyed a solid run alongside the oil price last week, breaking through a technical support level and reaching a 12-month high. Other oil producers, such as Beach Energy and Origin Energy have also enjoyed a rosy last couple of months. Beach has rocketed up 58.7 per cent since mid September and Origin his up 26.4 per cent in the same time.
"These guys might cop a sell off if OPEC can't get a deal together," warns Sala Tenna.
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The number of new apartments expected to be launched in Brisbane between now and June next year has suddenly dropped 25 per cent as developers struggle to get funding or encounter planning delays.
There have been concerns that Brisbane along with other Australian cities is facing an oversupply of apartments. However major groups such as La Salle and Invesco - both for which have deep pockets - are confident of Brisbane's new apartment market.
However, the latest data from Urbis shows that apartment sales in Brisbane hardly increased in the September quarter, and that the amount of planned apartments has been dramatically scaled back.
Urbis associate director Paul Riga said 19 new projects are expected to launch between October 2016 and June 2017, bringing a potential 3600 new apartments to the Brisbane market.
Last quarter, it was estimated that 31 developments and 4856 potential new apartments would enter the market in the same timeframe.
"It is either that the planning side of things is taking longer or they need a certain level of funding and can't get it," Mr Riga said.
"We saw 15 new projects launch this quarter across Inner Brisbane, down from 21 projects in the previous quarter."
Dan Holden from financier and broker Holden Capital agrees with the assessment that the difficulty in funding has lead to projects being shelved.
"It has increased to a point where only well-heeled developers with long track records and strong balance sheet will get support from major banks or alternative funding."
"As a result of this many planned projects will not see the light of day at least in this cycle."
Amcor is one of the biggest losers of the day, falling 4 per cent after Credit Suisse downgraded the stock to 'neutral' from 'outperform', predicting the shares would struggle in a rotation to growth stocks.
"Amcor's defensive revenue streams will unlikely outperform as investors seek growth, analyst Larry Gandler said.
Food, tobacco, packaging, beverage and healthcare revenue streams were unlikely to benefit enough from an acceleration in economic growth to offset rising bond yields, impact on capital cost, he said.
Gandler added that the greenback's rise against the euro had led to an about 5 per cent cut in Credit Suisse's earnings per share target.
Amcor share are down 4 per cent at $14.39.
Let's call if the dash for trash. Or maybe it's the revenge of value. Either way, here is an interesting slide from the wise guys who run the Absolute Equity Performance listed investment company.
They observe that Australia's most shorted stocks have run hard, and that 2016 has been a bull market for "low quality stocks".
Why? Well, the initial steep climb in February coincides with the year's low for resources, and many a struggling mining services firm or marginal commodities producer have been the targets for the shorters.
Even today, Western Areas and Worley Parsons are the second and third most shorted stocks on the ASX at 14.8 per cent and 13.2 per cent of their respective share bases in the hands of the market locusts, on shortman.com.au data.
The next leg higher looks like it happened around late June - the start of the surprise post-Brexit, central bank-inspired rally, when a rising tide presumably lifts all boats.
The dash for trash looks to have ebbed since September.
For the record, right now Myer is number one at 16.9 per cent of its shares sold short, while Bellamy's and Aconex are at 12.7 per cent, with the latter up from less than 5 per cent only three months ago.
One of China's biggest state-owned coal companies says prices will remain "relatively high" next year as the central government remains committed to shutting down old, inefficient mines.
Yanzhou Coal Mining Group director and chief financial officer, Zhao Qingchun, told the AFR the government was "determined to remove outdated capacity", and strengthen regulations on the transportation of domestic coal.
These two commitments, he said, would underpin global coal prices.
Zhao's comments come despite the government decision earlier this month to increase mines' operating days so there will be enough coal for heating in winter.
After what Zhao describes as a "bearish" first half, the thermal coal price has risen sharply since August. This should have helped Yanzhou Coal Mining Group's Australian subsidiary, Yancoal, to return a profit in the fourth quarter after a difficult few years. He also said the company was looking for more acquisitions, but declined to comment on specific deals.
Calling for a weaker yen was a lonely post six months ago for Royal Bank of Scotland's Mansoor Mohi-uddin. Now the Singapore-based strategist is getting plenty of company from others who are joining him in forecasting the currency will slide to 120 per US dollar.
While Bank of America expects the yen to reach that level at the end of 2017, Sydney-based asset manager AMP Capital Investors and BNP Paribas are even more bearish, predicting a slump past the 13-year low of near 126 yen reached in June last year. In the options market, the premium on contracts to buy the Japanese currency in three months' time is almost disappearing after falling to the lowest level since November 2015.
The yen has weakened more than 7 per cent since the Nov. 8 US election, the worst performer among developed-market peers. President-elect Donald Trump's promise of fiscal stimulus has sparked a sell-off in Treasuries, widening the gap between benchmark US yields and their Japanese counterparts to the most since 2011, boosting the appeal of American assets.
"That yield differential is really going to drive dollar-yen up," said Claudio Piron, Bank of America's co-head of Asia currency and rates strategy in Singapore. "The yen is going to be the most interest-rate sensitive out of the G-7 currencies."
Japan's currency last fetched 111.9 per dollar.
Nader Naeimi, who heads a dynamic investment fund for AMP Capital, said he would add to his bearish yen bets should the currency strengthen to 108.
"There is a strong possibility of a short-term retracement," said Naeimi, who started wagering against the yen before the US election. The yen's slide "won't be in a straight line," he said.
BNP Paribas expects the currency to weaken more than 10 per cent to 128 next year, the most pessimistic forecaster surveyed by Bloomberg.
Bank of Japan Governor Haruhiko Kuroda announced in September a shift in policy aimed at pegging the yield on 10-year Japanese government bonds near zero. In the US, the market sees an interest-rate increase by the Federal Reserve next month as a certainty, while futures show a more than 60 per cent chance of additional moves by June.
"In 2017, the dollar will trade in a higher 110-to-120-yen range on the back of faster Fed hikes and the BOJ keeping 10-year JGB yields around zero," said RBS's Mohi-uddin. "The stronger the dollar trades, however, the more the Fed may decide to keep to only a gradual pace of tightening."
The ability of Telstra to offset the fall in its traditional revenue streams by diversifying into a range of technology and other businesses is in doubt.
So far, Telstra's funding of 44 start-ups since 2013, the $235 million spent acquiring 18 health-related companies, the purchase of more than 30 companies by its venture-capital division, and its financing of a mining technology arm, have come to little.
Lumped together with the company's underperforming media department, the entire gamut of these operations - which include technology businesses from cloud computing to app delivery specialists - contributed just $908 million, or 3.4 percent of Telstra's income, in the fiscal year ended in June.
In particular, high hopes for a $US330 million ($442 million) investment in tech start-up Ooyala, a video platform, have all but faded, with Telstra mostly writing off in August what it called "a rapidly growing business" six months earlier. Ooyala was the biggest single investment by Telstra's venture-capital arm.
The company responded by noting recent public remarks by CEO Andy Penn, who told an investor briefing in Sydney on November 17 that after making "a number of acquisitions" the company is "consolidating" its investments in new businesses.
Like incumbent telecoms around the world, Telstra is facing falling profits from its traditional fixed-line networks and competition is squeezing mobile margins.
Telstra is conducting a review of its capital allocation as a result of the pressures. That prompted rating agency Standard & Poor's to revise its outlook on the company to negative, concerned that Telstra may take on more debt at a time when competition among mobile operators is intensifying. Any change to Telstra's A/A-1 rating would increase its cost of capital.
"They're at a critical juncture; for me as an investor it's hard to paint a picture that Telstra is in a better place in five years' time, with any confidence, than they are now," said Hugh Dive, senior portfolio manager at Aurora Funds Management, who sold the fund's Telstra holding during a company buyback in September.
High-tech telecommunications start-up Mobilicom is the latest Israeli firm set to join the ASX, and it is likely to be one of the most-watched backdoor listings of next year.
The company, which has developed technology that lets company employees and defence force personnel working in remote locations communicate with each other via a secure network, without the need for traditional infrastructure, is looking to raise up to $10 million at a valuation of up to $45 million.
But it is not the typical kind of company associated with a backdoor listing.
The firm is already profitable and is projecting revenue of $2.5 million for the 2016 full year – substantially more than many backdoor listed firms, some of which have listed with no revenue.
Its co-founders Oren Elkayam and Yossi Segal also have an established history in the tech industry. The pair have both founded their own companies before and worked together at Segal's former telecommunications business Runcom, which won clients such as Mitsubishi, Motorola and Alcatel-Lucent, and grew to $24 million in revenue under their leadership.
Following in the path of Runcom, Mobilicom is also global, with about 30 clients in 12 countries including Exxon Mobil.
Oil is extending declines as doubts emerge over OPEC's ability to reach an agreement to cut output and as representatives prepare to meet later today amid last-minute negotiations over the deal the group aims to formalise Wednesday.
Futures have dropped as much as 2 per cent after tumbling 4 per cent Friday. Saudi Arabia for the first time on Sunday suggested OPEC doesn't necessarily need to curb output and pulled out of a scheduled meeting with non-member producers, including Russia. Brent is trading at $US46.40 per barrel, down 84 cents, or 1.8 per cent.
SAUDI ARABIA trying to rebuild negotiating leverage by threatening possibility of no OPEC deal, after appearing too eager/desperate in Sep pic.twitter.com/Lz1sm3zjwS
— John Kemp (@JKempEnergy) November 28, 2016
OPEC will hold an internal meeting in Vienna today to resolve its differences, and as part of the final push to reach an agreement, oil ministers from Algeria and Venezuela are heading to Moscow to get the group's biggest rival on board.
Saudi Arabia's energy minister Khalid al-Falih said on Sunday that the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.
Morgan Stanley said that "cancelling a meeting with non-OPEC producers highlights the disagreements that remain within OPEC, but we still see at least a paper deal headline agreement as the most likely outcome.
Beyond the planned output cut, Morgan Stanley said that the firm US-dollar was the strongest oil price driver.
"Although Brent is down 57 per cent since 2012, a 30 per cent rise in the trade-weighted US-dollar has helped offset the impact for many producers," Morgan Stanley said.
"This FX effect has helped some producers lower their cost curve materially during the downturn on top of traditional cost cutting," the US bank added.
Since oil is traded in US dollars, a strong greenback weighs on oil prices since it reduces costs and increases revenues for producers, especially those who operate domestically with other currencies, while it makes fuel purchases more expensive for importers that use their own currencies domestically, potentially hitting on demand.
In China, money flow is tightly controlled and capital markets are relatively underdeveloped, meaning the economy works like squeezing a balloon.
You press it in one place, and it bulges in another. Policy-maker moves to cool one expansion only serve to inflate another.
Now that "gyration of bubbles" has been heating up the commodities market again, according to Société Générale's chief China economist Wei Yao.
Earlier this month, thermal and coking coal futures hit a record high since their debut in 2013 while zinc soared to the highest since 2011. Steel rebar, nickel, tin, iron ore and rubber futures also climbed to multi-year highs.
It's also interesting that buyers are piling in to get their hands on more obscure commodities such as glass, which is traded on the nation's futures exchanges, and garlic.
Data compiled by the Commerce Ministry in Beijing shows the price of the bulbs soared to record high or 14 yuan per kg, a rise of more than 80 per cent from a year ago.
Glass futures in Zhengzhou ran up to the highest in more than two years on Nov. 11 amid heavy trading.
Fundamental issues of declining supply and rising demand are partly to blame, but market watchers reckon that an uptick in trading volumes smacks of speculation, likely nudged by tightening measures in property markets.
"It's possible that some of the money is coming out of housing markets, especially from the first- and second-tier cities where tightening measures have been imposed to curb the property bubble," said Aidan Yao, senior emerging Asia economist at AXA Investment Managers.
Despite slowing wider economic growth, real-estate prices of China's top-tier cities have climbed very quickly in the last few years. Shenzhen, for example, saw home prices skyrocketing as much as 60 per cent just in the past year.
In an attempt to cool the rally, Beijing rolled out new measures in October to more than 20 — mostly top-tier — cities where property prices have disproportionately rallied.
"Garlic could be one of the target markets for speculators because there hasn't been a supply-and-demand change dramatic enough to warrant such a big price spike," said AXA Investment's Yao.
The recent surge in oil prices has prompted the question over whether Karoon Gas will have to renegotiate its deal with Brazilian oil giant Petrobras if it emerges victorious from its latest court battle.
It was late Friday night, two weeks ago, when a small news story materialised on the Brasilia Energy website that sent the stomachs of the Karoon Gas management plummeting, soon followed by the stock price.
The story outlined an injunction against Brazilian oil giant Petrobras and the oil and gas regulator brought forward by a representative of a Brazilian oil tankers union, who are resisting the 29 per cent state-owned company flogging off assets in order to cover its exorbitant debt levels.
As such, the federal court in the state of Sergipe has suspended the sale of the Baúna fields in the Santos Basin and Tartaruga Verde in Campos, to Melbourne-based oil and gas producer Karoon Gas, a deal that initially had investors piling into the ASX-listed company.
In October, after a 12-month process, the Brazilian giant announced it was close to finalising a deal with Karoon, which would catapult the oil and gas player to the top of the mid-cap producers in Australia with more than 45,000 barrels of oil equivalent a day and access to a highly-revered Brazilian development asset.
Investors were thrilled at the prospect, sending the share price rocketing up 87 per cent to a year-long high of $2.49. However, since news broke of Petrobras' troubles, some investors lost their nerve and sent the share price tumbling 20 per cent from a year-high to around $2.03.
Ben Cleary, portfolio manager of the global natural resources fund at Tribeca Investment Partners, has held Karoon Gas shares for several years, though stocked up the majority of the fund's 5 per cent holding at the start of this year.
While he says the delay is unfortunate, Mr Cleary points to Karoon's substantial cash backing as a cushion for the turbulence.
"The stock is trading only slightly above cash backing, so if the deal was to fall over we don't see material downside to the share price," he said.
Smarter thinking on the budget deficit is long overdues, writes SMH economics editor Ross Gittins:
I've been writing about the federal budget for 43 years, for 28 of which it's been in deficit.
So almost two-thirds of my career has been spent backing up Treasury in its recurring campaigns to pressure the government of the day to get the budget back to surplus. Sorry, not any more.
I've resigned from the budget-hectoring brigade because it finally dawned on me there has to be a better way.
You can put the blame for our eternally recurring budget crisis on the voters, whose demand for increased government spending is limitless, but whose willingness to countenance either spending cuts or tax increases is tiny.
Or you can blame the pollies – on both sides – who spend every election campaign pandering to and thus reinforcing this unreal thinking.
They wait until after elections to spring the bad news about the laws of arithmetic, then wonder why it's so hard to be economically responsible.
But I think some of the blame has to be shared with Treasury and Finance. It's true that treasuries – state as well as federal – accept ultimate responsibility for getting the budget back to balance. They care about budget balance above all other policy objectives.
Which is just as well. If Treasury didn't accept ultimate responsibility for fiscal rectitude, who do you reckon would? Certainly not the politicians, nor the media, nor the electorate.
That's why for so long I was happy to throw my puny weight behind Treasury's budget-repair campaigns.
I've stopped because, in all that time, there's been no sign of a learning curve. Treasury goes about attempting repair of the budget in just the same primitive way it did in the mid-1970s.
In all that time it's learnt almost no new tricks. It's applied no new science to its core responsibility of expenditure control, just kept on with the same old, same old simplistic cost-cutting approach.
Economists elsewhere have come up with inventive ways to make government spending more efficient and cost-effective: income contingent loans, activity-based health funding, the investment approach to welfare spending, early learning and other preventive programs, rigorous program evaluation and more.
Citi has ranked Carsales its top pick among online media and publishers and slapped a price target on the digital car classifieds and services business more than 10 per cent above Friday's close.
Initiating coverage in the sector, Citi analyst David Kaynes rates Carsales and News Corp majority-owned REA Group a 'buy', with price targets of $12.10 and $59.60 respectively.
Kaynes said Carsales has an attractive valuation with the potential for upside in the short-term from core produce development, earnings recovery at car and asset finance broker Stratton, and longer term growth from international and domestic investment.
"The core domestic business will deliver a consistent 5-6 per cent revenue growth per annum going forward, with modest price increases in the Dealer segment adding to underlying (low single digit) volume growth. Used cars are the least cyclical of the classified verticals, providing earning certainty in an otherwise volatile sector," Kaynes wrote in a note to clients.
"Carsales has exhibited the lowest pricing power in the segment over the past five years, despite having one of the strongest market positions. At the same time it is also the most profitable."
Citi also sees potential for REA to surge more than 30 per cent to $68 from Friday's close should the property market normalise, valuing it at $59.95 in the current market, more than 15 per cent above where it sits now.
"REA's shift from subscription to per-listing charges has allowed for a substantial increase in revenue, but has also exposed the business to the property cycle," Kaynes said.
"While we have no visibility on the timing of a rebound in transaction volumes, history suggests this can shift very quickly. What is clear, however, is the magnitude of the upside and a return to average sales volumes in Sydney and Melbourne would imply a 7 per cent earnings per share upside, combined with the 8 per cent upside from a return to a balanced market and we see scope for 15 per cent EPS upside and our target price would increase to $68/share."
Fairfax Media, publisher of this website, rates as Citi's only 'sell' in the sector, based on the negative valuation of the company's newspapers versus the high growth real estate classifieds and services business Domain.
Citi has a price target of 70¢, compared with Friday's close of 85¢.
"Domain on its own is expected to contribute 40 per cent of group EBITDA (earnings before interest, tax depreciation and amortisation) in FY17. While this is clearly the key driver of potential earnings growth for FXJ, it remains the newspaper divisions that pose the greatest risk for investors," Kaynes said.
"Domain will only generate 18 per cent of the group's revenue in FY17 according to our estimates. The vast majority still flows to the newspaper divisions. Given that most of the cost base (~$1.1 billion) also sits in these divisions, it is here that we believe investors need to focus their attention."
On the rest of the online media and publishing sector, SEEK, Trade Me and News Corp, Citi is 'neutral'.
Investors are on edge as Italian Prime Minister Matteo Renzi battles to stave off a humiliating defeat in a referendum on reforming the country's constitution, which could trigger a fresh outbreak of turbulence in the eurozone.
After the shock of the Brexit vote in which UK voters opted to leave the European Union, and Donald Trump's surprise victory in the US presidential election, investors are worried that Italian voters will be the next to deliver a stinging rebuke to establishment politicians when they go to the polls on December 4.
The constitutional reform proposes stripping the power of the Senate, or upper house, of much of its power, a move that Renzi says will simplify decision-making and result in more stable government. Opponents say it will dramatically reduce democratic checks and balances.
Opinion polls suggest that at this stage, the no vote holds a narrow lead, although pollsters point out that a large number of voters have still to make up their minds.
Renzi, whose approval rating has falling to around 30 per cent, or less than half the level it stood at when he came to power two years ago, has threatened to step down and not lead a technocratic government should the yes campaign fail.
But markets are far from convinced that Renzi will be able drum up enough support for his proposed reforms. The Italian sharemarket has slumped more than 20 per cent in 2016, making Milan the worst-performing major stock market in Western Europe.
And investors have been selling Italian bonds, which has pushed the yield on Italian 10-year bonds up to 2.1 per cent, their highest level since early 2012. (Yields rise as bond prices fall.)
Even more alarming, the gap between Italian 10-year bond yields and benchmark German bunds has widened to 186 basis points (1.86 percentage points), compared with 97 basis points at the start of 2016.
Ladbrokes Coral Group could gatecrash a billion-dollar gambling deal by making a bid for Tabcorp, which is trying to buy rival betting company Tatts Group, the UK's Mail on Sunday newspaper reported.
Ladbrokes has hired advisers to prepare an offer forMelbourne-based Tabcorp, and is not said to be interested in Tatts, the Mail said, citing unnamed sources. A Ladbrokes spokesman told Bloomberg News the company doesn't comment on press speculation.
Tabcorp has secured a 10 per cent stake in Tatts as it pursues a $6 billion merger to create a pan-Australian company that will take bets on horse racing, greyhound racing and sports matches, with the scale necessary to take on online rivals including Ladbrokes and William Hill.
This equity swap announced last week was seen as an attempt to ward off approaches by overseas competitors before the deal was completed. The stock and cash deal agreed in October is subject to ACCC approval, and valued Tatts at $4.34 per share at the time.
Ladbrokes had also approached Tabcorp in 2013 to create a joint venture but was rejected, according to the Daily Mail,which said any bid would likely be in cash and stock.
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