Buyers back in charge
In a continuation of recent stock market volatility, the buyers have been firmly in charge over the past 24 hours.
While, stability in China’s stock market may have been a catalyst and a minor circuit breaker, it’s hard to believe it featured heavily in the list of investor reasons for buying. More likely the surge in world share markets over the past 24 hours reflects the fact that many see relative value in current prices. This creates a situation where those who have been waiting on the sidelines are quick to follow once buying starts. This is reflected in yesterday’s news that Woodside now sees enough value to have made a move on Oil Search while the dividend yield on the ASX 200 index now exceeds 5%.
The potential Oil Search takeover is likely to be a market focus for some time. After the dust has settled and the numbers have been run, it seems likely that Woodside will need to improve its offer to succeed.
While a positive opening looks likely for the index this morning it will be swimming against the tide more than 16 points of dividend losses today. BHP and Woolworths, amongst others, trading ex-dividend.
Frequently Asked Questions about this Article…
Buyers are back in charge of the stock market due to perceived relative value in current prices, prompting those who were waiting on the sidelines to start buying once the market showed signs of movement.
While stability in China’s stock market may have acted as a minor catalyst, it is not considered a major reason for the recent surge in global share markets. The primary driver seems to be the perceived value in current stock prices.
Woodside has made a move on Oil Search, seeing enough value to consider a takeover. However, it is likely that Woodside will need to improve its offer for the takeover to succeed.
The ASX 200 index's dividend yield exceeding 5% is significant because it indicates attractive returns for investors, which can be a compelling reason for buying stocks, especially in a volatile market.
Ex-dividend trades, such as those involving BHP and Woolworths, can lead to a decrease in stock prices as the dividend value is subtracted from the stock price, contributing to market volatility.
Woodside might need to improve its offer for Oil Search because, after evaluating the numbers, it seems that the initial offer may not be sufficient to secure the takeover.
When a stock trades ex-dividend, it means that new buyers of the stock are not entitled to the next dividend payment. This often results in a temporary drop in the stock's price.
Perceived value influences stock market activity by encouraging investors to buy stocks they believe are undervalued, leading to increased market activity and potential price surges.
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