The Australian share market saw a downturn today, largely influenced by a significant drop in Westpac’s share price, which fell by 5 per cent. This decline comes as Westpac, one of Australia’s ‘big four’ banks, reported a substantial 20 per cent plunge in mortgage applications following the federal budget and recent interest rate hikes. The bank, which posted a $1.8 billion quarterly profit, also anticipates that growth in investor demand for housing credit will more than halve over the next two years. Westpac is a major provider of mortgages and consumer finance across the nation, offering a range of financial services including retail, business, and institutional banking.
Amidst the broader market movements, several notable corporate transactions were announced. Investment firm I Squared confirmed its acquisition of oOh!media, while a rival offer of $4 per share emerged for FleetPartners. Additionally, TabCorp announced its purchase of BetMakers for a total of $267 million, signalling ongoing consolidation within various sectors. Further challenging corporate news came from Treasury Wine Estates, a global wine company based in Australia known for brands like Penfolds. The company, which produces and markets a wide portfolio of wines across various international markets, reported an additional $558 million write-down on its ill-fated US expansion, bringing total writedowns to over $1.2 billion.
On the economic front, persistent domestic inflation pressures are leading analysts to suggest the Reserve Bank of Australia may ultimately need to raise interest rates despite recent pauses. Meanwhile, Australia’s A$340 billion sovereign wealth fund, the Future Fund, revealed a significant 25 per cent exposure to artificial intelligence. The Future Fund, established to strengthen the government’s long-term financial position, invests across a diverse range of assets globally to generate returns. It aims to ride the AI boom through a diversified approach, acknowledging the difficulty of picking individual winners in the rapidly evolving technology space.
