Dilutive move from the Australian bank
The stock to watch in Australia today will be one of the country's Big Four banks.
Westpac is selling A$2 billion worth of shares in a private placement at $25.32/share. That's a 9.2% discount to Friday's closing level.
The bank is aiming to create a buffer on its capital ratios with its CET1 ratio to climb to 11.3% on the move. It was at 10.7%, just above the 10.5% required by regulators.
The company also cut its dividend by 15% to 80-cents per share, which wasn't entirely a surprise.
CEO Brian Hartzer said 2020 will be equally challenging. He said he bank expects Australian GDP growth to be below trend and warned that consumers continue to remain cautious with their spending.
Trading on shares is halted at $27.88.
The move isn't exactly an endorsement of the Australian economy, housing market or outlook but AUD/USD is unfazed and continues to trade fractionally higher on China optimism. Hartzer also hinted at better things to come:
"We expect the Australian economy will lift somewhat supported by lower interest rates, improved housing sentiment and targeted income tax cuts," he said.
