Australian shares slid 2% during the course of the week as uncertainty over Greece and China proved more powerful than cheery midweek sentiment.
Greece’s effective default on its repayment to the International Monetary Fund weighed on the market early in the week, but Greece’s softer stance towards the IMF rekindled buying on Wall Street and, later, in Australia for much of the week.
However, jitters prevailed on Friday as Greeks prepare to vote on whether to accept or reject creditors’ proposals.
In addition, China’s share market continued to sink as regulators prepared to launch a probe into market manipulation. The nation’s benchmark Shanghai Composite index has been in decline for several weeks, including a further drop of 7% on Friday.
Takeovers a market theme
Australia’s benchmark S&P/ASX 200 index closed 61.5 points, or 1.1%, lower on Friday at 5538.3.1.
Despite ructions from markets offshore, mergers and acquisitions (M&A) dominated the local market.
Ports and rail operator Asciano (ASX: AIO) surged 23% over the week on the back of an $8.8bn takeover offer from Brookfield Infrastructure Group.
Asciano shares ended at $8 on Friday, up 2%. The closing price is below Brookfield’s $9.05 cash and scrip offer as investors remain cautious ahead of the release of full terms of the agreement.
Shares in outdoor gear retailer Kathmandu Holdings (ASX: KMD) climbed 21% over the week as New Zealand retailer Briscoe Group made a share and cash offer valuing the target at $312m.
Childcare provider G8 Education (ASX: GEM) has offered to buy Affinity Education (ASX: AFJ) in a takeover that would value the target’s shares at nearly 30% above their last traded price before the announcement was made.
G8 has offered one of its shares for every 4.61 Affinity shares held. The offer values Affinity at $162m, or 70c a share.
Affinity has advised its shareholders to take no action for now, calling the offer highly opportunistic.
Murray Goulburn debuts, Fortescue drops
Australia’s largest dairy company, Murray Goulburn Co-operative (ASX: MGC), debuted at $2.18 per unit, or 4% above its $2.10 issue price. It ended its first day of trade 7% ahead at $2.24.
The S&P/ASX 200 materials index shed nearly 3% over the week as lower iron ore prices spurred selling.
Iron ore producer Fortescue Metals Group (ASX: FMG) fell nearly 5% on Friday and 9% over the week to $1.82. The price of iron ore for immediate delivery to China plunged more than 5% overnight on fresh concerns over a supply glut of the commodity.