This week, broker activity was dominated by potential merger and acquisition activity and speculation. There was the 14.1% stake in Duet Group that was acquired by Spark Infrastructure and the proposed merger between IOOF and SFG Australia. KKR’s announced bid for Treasury Wine Estates also prompted both an upgrade and a downgrade.
In the good books
Credit Suisse upgraded ASX Limited to Neutral from Underperform. The valuation is now undemanding and, while there is some scope for further earnings upside, the stock offers less earnings volatility than the broader financial sector, along with a 5.4% dividend yield. Hence, ASX is a relative safe haven investment.
Macquarie upgraded Bendigo and Adelaide Bank (BEN) to Neutral from Underperform. The broker has reviewed its valuation of Bendelaide following the acquisition of RFC Vic. The acquisition demonstrates BEN's M&A discipline, something the broker suggests is "sorely lacking" among peers.