Li Ka-Shing’s company Hutchison Whampoa has scrapped plans to sell the ParknShop supermarket chain, denting Woolworths' plans to expand into Asia.
A combination of increased competition for domestic supermarket operators and the potential acquisition of ParknShop have seen Woolworth’s share price lose 2.9 per cent this month. In comparison, competitor Wesfarmers has gained 2 per cent.
Woolworths has successfully moved into the New Zealand market, but investors haven’t seemed to be overly enthused about a possible venture further into Asia.
Latest analyst updates from last week for Woolworths include JP Morgan with an underweight allocation and target price of $32.05 and Credit Suisse with an underperform call and a target price of $29.85. Woolworths closed at $33.96 on Friday.
Boral chief executive officer Mike Kane thinks Australia has seen the bottom for building products and construction materials in Australia.
Only last week Boral announced a joint venture with US peer USG Corp to further expand its footprint in the US market, which is experiencing a recovery in housing.
Kane’s commentary is broadly positive for domestic construction, which is still struggling to gain meaningful traction despite a series of aggressive rate cuts. At this stage it will still be some time until we see this flow through into improving earnings.