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Speaker 1: It's crunch week for BHPS, seventy five billion dollar bid

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Speaker 1: for Anglo American and the South African government might be

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Speaker 1: the wild card. The housing market gets into a rhythm

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Speaker 1: with seven in ten houses sold last week, and we'll

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Speaker 1: tell you about the ninety one billion US dollar man

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Speaker 1: who you probably haven't heard of. Welcome to Fear and Greed.

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Speaker 1: Daily business news for people who make their own decisions.

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Speaker 1: It is Monday, the twenty seventh of May twenty twenty four.

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Speaker 1: Are Michael Thompson and Good Morning, Sean Aylmer.

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Speaker 2: Good morning Michael, Sean.

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Speaker 1: After the show, you have an interview coming up today

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Speaker 1: with Matthew Kidman of Centennial Asset Management.

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Speaker 2: Yeah, so we talked to Matthew all about where the

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Speaker 2: share markets add it's been going as in his words,

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Speaker 2: it's been shifting sideways for a couple of months. Now,

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Speaker 2: what's the outlook, What sectors does he like, what sectors

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Speaker 2: doesn't he like? And as always Matthew gives drops a

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Speaker 2: few names that he thinks might be worth thinking about

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Speaker 2: when you're investing. Obviously we always say go and find

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Speaker 2: out financial advisor because we're not an investment podcast, but

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Speaker 2: it's well worth listening to Matthew to give you some ideas.

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Speaker 1: Yeah, certainly is. It's a good one. It's coming up

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Speaker 1: after the show, so stick around for that one. The

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Speaker 1: main story this morning, Sean, it is crunch week for

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Speaker 1: BHP seventy five billion dollar bid for Anglo American, with

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Speaker 1: the deadline now set Wednesday night Australian Time, and analysts

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Speaker 1: reckon a deal could get done. But the sticking point

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Speaker 1: here is the structure.

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Speaker 2: Essentially, under the current proposal, there's a bunch of assets

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Speaker 2: which BHP wants spun off before any takeover, and another

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Speaker 2: bunch which will be reviewed after the takeover. That really

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Speaker 2: is the sticking point. BHP has said it made a

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Speaker 2: final offer ratio final offer ratio which is a ratio

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Speaker 2: of BHP shares received by Anglo American shareholders if the

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Speaker 2: deal goes ahead. The latest offer is one Englo share

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Speaker 2: for zero point eight eighty six BEHP shares. That doesn't

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Speaker 2: preclude a cash offer. That's kind of interesting as well.

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Speaker 2: BHP is insisting that Anglo spinoff majority stakes in the

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Speaker 2: South African Platinum and Iron are units. It means Anglo

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Speaker 2: shareholders end up with those stakes in the off lated

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Speaker 2: assets they carry the risk then of those deals. So

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Speaker 2: if they spin it off, the Anglo shareholders end up

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Speaker 2: holding shares in these two companies. And what the big

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Speaker 2: investors in Anglo are saying is that actually BHP should

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Speaker 2: be carrying some of that risk. It just shouldn't be

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Speaker 2: our risk. Also to do all that will take time,

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Speaker 2: possibly more than a year, so for that to occur,

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Speaker 2: Angler shareholders might not actually realize the value of the

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Speaker 2: bid for some time South African regulators they also might

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Speaker 2: demand concessions before any spinoffs are allowed. Put all that

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Speaker 2: together and you better understand why the Anglo shareholders view

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Speaker 2: the BHP deal is too complex. However, some of the

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Speaker 2: big Anglo shareholders have pushed the company to at least

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Speaker 2: talk to BEHP, and plenty of speculation over the weekend

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Speaker 2: that if that structure can be worked out, the price

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Speaker 2: is okay. If the structure can be worked out, then

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Speaker 2: the deal might get the go ahead. Very very busy

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Speaker 2: three or four days for boards, management advisors in both

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Speaker 2: those companies.

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Speaker 1: And of course Sean because timing is everything in this.

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Speaker 1: There's also a South African election this week which may

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Speaker 1: just complicate things.

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Speaker 2: Yeah, so the African National Congress the political party of

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Speaker 2: Nelson Mandela. It's been in power for about thirty years

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Speaker 2: once to keep that record going. The election is actually Wednesday,

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Speaker 2: which is the deadline for BHP to make a formal

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Speaker 2: offer for Angler. The concern is that, however, wins will

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Speaker 2: ask BIGHP or Anglo, whoever owns the assets to guarantee jobs,

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Speaker 2: capital spending, local procurement, stuff like that, even if the

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Speaker 2: iron ore and platinum businesses are spun off and in

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Speaker 2: a way, I think that's probably why BHP would like

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Speaker 2: all that to happen without it being involved. So that

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Speaker 2: certainly does add another interesting little agender item to the

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Speaker 2: board meetings this week.

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Speaker 1: And it is going to be a massive, massive week.

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Speaker 1: Let's turn our attention back to the end of last week.

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Speaker 1: How did local markets finish up on Friday.

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Speaker 2: Well, there's a pretty big selloff, with the s and

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Speaker 2: PASEX two hundred finishing down one point one percent to

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Speaker 2: seven seven hundred and twenty eight points. Every sector lost ground.

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Speaker 2: Retailers and banks led the way lower, with all big

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Speaker 2: four banks dropping sharply. That Commonwealth Bank was off two percent.

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Speaker 2: West Farmers was one of the worst for the last caps,

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Speaker 2: down nearly four percent. The exception really were the energy companies.

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Speaker 2: Both Woodside and Santas closed up slightly for the week,

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Speaker 2: the market was down more than one percent. Futures training

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Speaker 2: suggests so that the ASEX should start in positive territory today.

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Speaker 1: All right, Checking international markets now, thanks to blue Chip Communication,

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Speaker 1: the experts helping financial services companies market, communicate and grow.

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Speaker 1: Visit blue Chip Communication, dot com, dot AU. Much happening

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Speaker 1: on Wall Street.

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Speaker 2: Sewn plenty happening Some of the big tech stocks scent

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Speaker 2: Wall Street high, with Tesla and Video leading the way.

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Speaker 2: The tech heavy Nasdaq one hundred finished up more than

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Speaker 2: a percent over the weekend, closing the week at a

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Speaker 2: record high, and Video is now worth two point six

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Speaker 2: two trillion US dollars. Apple's worth about two point nine

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Speaker 2: to one trillion US dollars. That gap is closing fast.

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Speaker 2: Microsoft is the largest company on Wall Street, worth about

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Speaker 2: three point two trillion dollars. US markets are closed tonight

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Speaker 2: for Memorial Day. There's also a bank holiday in the UK.

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Speaker 2: Quite apart from all that, the US Securities and Exchange

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Speaker 2: Commission late last week paved the way for trading in

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Speaker 2: exchange traded funds that invest directly in the cryptocurrency Ether.

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Speaker 2: That's the number two cryptocurrency. The SEC signed off on

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Speaker 2: a proposal by venues run by CBO Global Markets, NASDAK

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Speaker 2: and the New York Sotock Exchange to list products tied

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Speaker 2: to the world's second biggest crypto investment companies, places like

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Speaker 2: van Neck are Blackrock Fidelity. They're all vying for first

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Speaker 2: mover advantage in trying to create a spot ETF. Their interest,

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Speaker 2: of course, has been bumped along by the billions of

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Speaker 2: dollars flowing into new bitcoin ETFs ever since January, when

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Speaker 2: the SEC signed off on trading in those products. Ether's

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Speaker 2: price has surged in recent weeks as rumors of an

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Speaker 2: SEC ruling spread. There were still twenty percent below its

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Speaker 2: all time record. It isn't quite there. We're not about

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Speaker 2: to see ETFs in the next few weeks because there's

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Speaker 2: still a few regulatory hurdles to get through. But the

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Speaker 2: SEC ruling is important.

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Speaker 1: All right. There is plenty happening, Sean. We'll be back

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Speaker 1: in a moment with the rest of the day's business news.

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Speaker 2: Sewn.

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Speaker 1: The auction clearance rate over the last week came in

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Speaker 1: at seventy one point five percent, slightly higher than a

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Speaker 1: week earlier, and the market looks to be well, looks

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Speaker 1: to be reasonably settled at the moment, wouldn't you say.

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Speaker 2: It's almost a normal market, and we haven't had a

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Speaker 2: normal housing market for a few years.

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Speaker 1: Normal as a novelty for us right now.

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Speaker 2: Yeah, yeah it is. I mean, there were twenty two

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Speaker 2: hundred auctions last week, so that's actually a bit higher

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Speaker 2: than normal, So maybe that wasn't so normal. Melbourne in

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Speaker 2: particular is holding plenty of auctions. It's had four weeks

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Speaker 2: in a row of one thousand plus auctions, but the

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Speaker 2: preliminary clearance rates and even the final clearance traits are

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Speaker 2: about what they should be based on the past ten years.

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Speaker 2: So Melbourne over the last week came in at seventy

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Speaker 2: one point two percent. That was up nearly three percentage points.

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Speaker 2: Sydney was seventy two point seven percent. That was down

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Speaker 2: one and a half percentage points. But those figures are

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Speaker 2: about the long run average. In the smaller markets, Adelaide

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Speaker 2: came in at seventy eight percent and Brisbon at seventy percent.

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Speaker 2: They're actually performing better than long term averages. Canber was

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Speaker 2: fifty nine percent. That's underperforming long term averages.

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Speaker 1: Still on real estate Sean, houses with green credentials are

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Speaker 1: attracting more interest and are easier to sell, according to

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Speaker 1: a new report from online property group Domain.

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Speaker 2: Yeah it's interesting this one. Middle income households are fueling

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Speaker 2: the demand for energy efficient homes which spend fewer days

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Speaker 2: on the market and about sixteen percent or receive about

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Speaker 2: sixteen percent more listing views. Domain Sustainability and Property report

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Speaker 2: shows that despite the cost of living crisis, green homes

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Speaker 2: have four percent fewer days on the market, with Darwin,

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Speaker 2: Hobart and Adlaide leading the way in terms of quicker

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Speaker 2: sales in the unit market, Darwin, Brisbane and Perth are

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Speaker 2: leading the way well. The major markets of Sydney and

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Speaker 2: Melbourne haven't recorded quicker sales for green homes, yet they

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Speaker 2: have reported a high number of listing views to Maainseas.

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Speaker 2: These success of green homes comes down to a growing

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Speaker 2: number of environmentally conscious buyers and lifestyle benefits such as

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Speaker 2: cross ventilation, solar panels and all facing orientation all that

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Speaker 2: sort of stuff. Of course, they can also reduce ongoing

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Speaker 2: costs and say buyers like.

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Speaker 1: That, Sean, this is an interesting one. Australians with AI

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Speaker 1: skills are being paid more, sometimes seventeen percent more than

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Speaker 1: those without artificial intelligence skills. How would you rate your

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Speaker 1: AI ability?

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Speaker 2: Well, to be honest, as you know, I run a

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Speaker 2: little writing business as well on the sign and we

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Speaker 2: use AI quite a bit, so I would say I

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Speaker 2: wouldn't say I'm highly skilled, but I'm above zero.

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Speaker 1: You will be asking for seventeen percent more, now.

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Speaker 2: That's right, Simon Anderson, and I run this business. I

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Speaker 2: will be asking Simon. I know he's got more skills

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Speaker 2: than I did.

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Speaker 1: Yeah, You've got to find someone who has less skills

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Speaker 1: than you and compare yourself to them, don't you anyway?

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Speaker 1: Storry go on tell us about the report.

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Speaker 2: Yes, The AI Jobs Barometer from PwC Australia shows AI

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Speaker 2: skilled workers employed as education managers, research and development managers

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Speaker 2: and database administrators received the highest average wage premium, ranging

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Speaker 2: between fourteen and seventeen percent. Jobs that require AI skills

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Speaker 2: in Australia had an average premium of six percent. It's

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Speaker 2: actually much lower than the global average of fourteen percent

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Speaker 2: from fourteen other country surveyed, including the US, UK and Canada.

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Speaker 2: I dare say we will catch up with that. PwC

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Speaker 2: looked at more than five hundred million job ads from

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Speaker 2: fifteen countries. Probably day I had to do it, Now

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Speaker 2: that I think about it, I'm sure they would do

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Speaker 2: for it. They found that the number of jobs that

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Speaker 2: required AI have increased four and a half time since

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Speaker 2: twenty twelve in Australia, compared to seven times internationally. Other

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Speaker 2: jobs that had a high wage premium for AI skills

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Speaker 2: included advertising and marketing, professional supply and distribution managers and

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Speaker 2: industrial engineers. According to report in This Train.

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Speaker 1: Sewn, Queenslanders are going to the polls on October twenty

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Speaker 1: six and the election campaign has begun, with Premier Stephen

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Speaker 1: Miles yesterday announcing fifty cent bus and train rides for

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Speaker 1: six months. This is one of those policies that just

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Speaker 1: grabs the headlines.

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Speaker 2: It's a cracker fifty cents. It's about to cost the

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Speaker 2: government about one hundred and fifty million dollars and it

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Speaker 2: comes as the ruling Labour Party, which seven miles to

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Speaker 2: the premiere of trails the Liberal National Coalition in the

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Speaker 2: polls definitely going to be a cost of living election.

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Speaker 2: This one. The government's already promising energy rebates cash backs

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Speaker 2: for first year construction apprentices to cover the cost of tools.

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Speaker 2: Now we've got this fifty cent train and bus ride.

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Speaker 2: The reduced fares will be available on all translink services

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Speaker 2: anywhere in the state from August five, not the privately

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Speaker 2: owned transport services. The government hopes reduced train, bus and

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Speaker 2: ferry fares will encourage people to travel more without use

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Speaker 2: of their cars. Public transport usage in Queensland is down

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Speaker 2: about thirteen percent low pre pandemic levels. Anyone who has

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Speaker 2: driven in southeastern Queensland with all the roadworks going on

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Speaker 2: there realize the need for people to get out of

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Speaker 2: their cars and onto trams and buses and things like that. Anyway,

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Speaker 2: that's what the government's hoping for.

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Speaker 1: And it's crunch Day. We've got crunch week for BHP

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Speaker 1: and crunch Day here it's on for land lease.

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Speaker 2: A lot of crunching going on, crunch Fest even crunch Fest.

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Speaker 2: I like it.

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Speaker 1: Yeah, crunch Fest, crunch Day today for land lease.

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Speaker 3: Can we make it D Day like it's crunch week

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Speaker 3: but D Day? Yeah, Okay, that's good, good yep. It

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Speaker 3: might be crunch Fest crunch week for BHP, but D

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Speaker 3: Day for the land lease within, battled CEO Tony Lombardo

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Speaker 3: set to outline the group's strategy today.

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Speaker 2: Disenfranchised investors are pushing for the group to exit its

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Speaker 2: United States and United Kingdom construction operations, a shift that

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Speaker 2: could result in the shedding one thousand jobs then least

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Speaker 2: employees about sixty eight hundred people across its global network.

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Speaker 2: Market commentators have said. Another main concern is that the

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Speaker 2: global construction sector is under severe pressure and there's not

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Speaker 2: many obvious buyers for len Lissa's large scale operations. According

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Speaker 2: to report in The City Morning Herald, now dissident high

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Speaker 2: prayer of file shareholders including Senari Capital, Alan Gray and

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Speaker 2: HMC Capital, which combined only eight percent of Lendlea's registers,

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Speaker 2: have been agitating for a change from the top down.

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Speaker 2: That forced chair Michael Wolmer to say he'll step down

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Speaker 2: later in the year. Of course, Len Lisa's share price

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Speaker 2: has tumbled over the past four or five years, so

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Speaker 2: it's a very very big day for the CEO Tony

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Speaker 2: Lombardo today.

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Speaker 1: Indeed, now turning to international News now Sean, the Indian

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Speaker 1: election continues and we do to find out the winner

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Speaker 1: in a week's time. We've talked about that previously, just

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Speaker 1: how big a logistical exercise it is. But it seems

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Speaker 1: at this point that Prime Minister naranrom Modi's party will

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Speaker 1: win with a reduced majority.

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Speaker 2: Yes, so the world's biggest election is heading into week six.

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Speaker 2: The final week of voting across the nation closes on

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Speaker 2: June one. We should get the result on June four.

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Speaker 2: They don't start counting until everyone has voted, so it's

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Speaker 2: not like they've been counting on the way. Madey said

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Speaker 2: his party and allies would win four hundred seats in

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Speaker 2: the election, up from about three hundred and fifty seats

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Speaker 2: at one in twenty nineteen. That now seems very unlikely

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Speaker 2: thanks to lower voter turnout and reports close contests in

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Speaker 2: some areas. Mody wants to turn India into a world

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Speaker 2: class manufacturing hub to rival China. He's been willing firms

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Speaker 2: like Apple, Tesla and Boeing to expand rope plants in India.

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Speaker 2: The trick, though, which I think voters are very aware

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Speaker 2: of and it's working against him in the polls, is

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Speaker 2: that to attract some of those companies, he's going to

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Speaker 2: have to make it much simple. He's going to have

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Speaker 2: to do some serious labor market reforms make it simpler

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Speaker 2: for businesses to hire and terminate workers, et cetera. He

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Speaker 2: needs to do that to get Apple, Tesla, Boeings of

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Speaker 2: the world to invest. And it seems that voters understand

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Speaker 2: that and not so positive about some of those reforms.

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Speaker 1: The stats for that. I was just trying to remember

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Speaker 1: some of the stats that she gave us kind of

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Speaker 1: five weeks ago when the election began.

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Speaker 2: What was it.

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Speaker 1: There's one point one million polling places and fifteen million

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Speaker 1: electoral agents. It is just it is on another scale altogether,

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Speaker 1: isn't it.

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Speaker 2: Yeah, it's spectacular.

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Speaker 1: It is just amazing. Anyway. Sean proxy advisor Glass Lewis

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Speaker 1: has urged Tesla's shareholders to vote against Elon Musk's fifty

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Speaker 1: six billion US dollar pay award and a proposal to

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Speaker 1: reincorporate the electric vehicle maker in Texas.

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Speaker 2: So Glass Lewis is an incredibly influential proxy advisor, So

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Speaker 2: people look to Glass at Lewis when they're casting their

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Speaker 2: votes at shareholder meetings. Certainly, the fact that they've come

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Speaker 2: out over the weekend against Elon Musk's fifty six billion

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Speaker 2: dollar pay award is a blow ahead of the annual

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Speaker 2: meeting next month, Glass Lewis said the chief executive's package

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Speaker 2: of share options was unduly dilutive and I quote excessive size.

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Speaker 2: Surely not yes, it did in a report it released

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Speaker 2: over the weekend, according to Financial Times, but also criticized

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Speaker 2: the proposed move to Texas as offering uncertain benefits and

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Speaker 2: additional risk to shareholders. The proxy advisor also raised issues

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Speaker 2: with Musk's slate of extraordinary time consuming projects, in particular

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Speaker 2: the twenty twenty two acquisition and ongoing overhaul of Twitter

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Speaker 2: now known as X, which it claims are distracting the

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Speaker 2: billionaire from leading the world's largest EV manufacturer. Musk is

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Speaker 2: also being somewhat distracted by SpaceX, Neural Link and the

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Speaker 2: boring company these other assets. Tessla's board has been lobbing

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Speaker 2: investors to reratify the fifty six billion dollar award given

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Speaker 2: in twenty eighteen that was actually struck down by Delaware

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Speaker 2: judge at the beginning of this year due to concerns

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Speaker 2: over its size and of course the independence of the board.

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Speaker 2: We've got Glass Lewis coming in against it, so as

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Speaker 2: you can't points for trying, but fifty six billion newest dollars. Really,

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Speaker 2: I don't think so.

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Speaker 1: It's pretty extraordinary. Speaking of extraordinary, Sean, I mentioned this

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Speaker 1: one at the top of the sho Jensen Huang might

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Speaker 1: not be a household name at the moment, but he

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Speaker 1: is now super rich. The co founder of chip maker

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Speaker 1: and video now has a fortune worth ninety one point

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Speaker 1: two billion US dollars, thanks of course to the absolutely

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Speaker 1: incredible surge in Nvidia's share price.

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Speaker 2: So he's now richer than the Walton family members. They're

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Speaker 2: the ones, the Walmart family. They have for decades been

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Speaker 2: the richest among the richest Americans. Jensen Huang is now

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Speaker 2: the seventeenth richest person in the world, according to Bloomberg

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Speaker 2: Billionaires Index. Nearly all of his wealth is in Nvidia's shares.

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Speaker 2: The chipmaker's share price pushed beyond one thousand US dollars

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Speaker 2: last week after very strong marched quarter results. Its share

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Speaker 2: price is about two hundred and fifty percent this year,

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Speaker 2: not far off Apple. Of course, we mentioned that earlier

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Speaker 2: in the show, and Jensen Huang is now worth ninety

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Speaker 2: one billion US dollars.

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Speaker 1: That is just amazing, And Sean, you have given me

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Speaker 1: a brilliant idea. It seems a little bit kind of

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Speaker 1: cocky to say that my own idea is it's brilliant.

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Speaker 1: Is brilliant. But all this talk, well, you mentioned Walmart

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Speaker 1: and the Walton family. I'm thinking ahead to next Sunday

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Speaker 1: because every Sunday we release a Sunday feature interview or

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Speaker 1: just a piece of content from the last few years

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Speaker 1: of Fear and Greed that's worth revisiting. And back in

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Speaker 1: twenty twenty one we spoke to somebody who took us

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Speaker 1: through the history of Walmart. Oh, we did too, and

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Speaker 1: the Walton family and kind of how it came to

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Speaker 1: be this global retail behemoth that doesn't have a presence

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Speaker 1: in Australia and why it's never been able to actually

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Speaker 1: make it here. It's definitely worth revisiting and we might

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Speaker 1: re release it as our Sunday feature this coming week.

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Speaker 2: Great idea, Michael, Thank you.

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Speaker 1: I feel justified. Now up next, Sean is the Fear

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Speaker 1: and Greed Daily Interview. You're speaking today with Matthew Kidman

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Speaker 1: from Centennial Asset Management.

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Speaker 2: Sure, am, what's going to happen to market from here?

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Speaker 2: Talk a little bit about Wall Street, mostly about Australia,

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Speaker 2: including a few stocks. Matthew's keeping an eye on.

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Speaker 1: He's always good value, Matthew Kidman. And also coming up

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Speaker 1: is Fear and Greed The Week Ahead with our resident

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Speaker 1: economist Stephen Coculus.

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Speaker 2: It's actually big week, big week in economics. Not much

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Speaker 2: going on last week apart from Reserve Bank Board minutes.

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Speaker 2: This week there's a bunch of things like retail and building,

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Speaker 2: and the monthly inflation figure is a big one. So

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Speaker 2: we talked to Steven all about that, as excited as

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Speaker 2: ever about the economic data over the next four or

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Speaker 2: five days.

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Speaker 1: Yeah, they are both coming up in the Fear and

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Speaker 1: Greed playlist on your podcast platform or at Fearangreed dot

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Speaker 1: com dot au, which is also where you can sign

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Speaker 1: up for the Fear and Greed newsletter, which comes out

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Speaker 1: every Wednesday mid morning on Wednesday. So head along to

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Speaker 1: the website now, pop your email address in and you'll

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Speaker 1: get an email that is just positively dripping with Sean's

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Speaker 1: opinions on a whole bunch of stories.

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Speaker 2: Yes, I thought we're trying to encourage people anyway, that's

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Speaker 2: a sign up.

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Speaker 1: Yes, indeed, thank you Sean.

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Speaker 2: Thanks Michael.

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Speaker 1: It's Monday, the twenty seven month of May twenty twenty four.

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Speaker 1: Make sure you're following the podcast and please join us

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Speaker 1: online on LinkedIn, Instagram, x TikTok and Facebook. I'm Michael

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Speaker 1: Thompson and that was fear and greed. Have a great day.