Global markets were higher on Friday as all three major US benchmarks closed at record highs over the weekend.
Gains were broad based on Friday, with Banks being standout beneficiary’s as a long-awaited bill to cut corporate tax rates looked like it would win enough support from lawmakers to pass. President Donald Trump's Republicans appear to have settled on the most-sweeping overhaul to business and personal taxes since 1986, including slashing the corporate rate to 21%. It is anticipated that the Bill will be passed into law as soon as this week.
As we discussed last week, proposed tax cuts are expected to provide a significant boost to company profits, somewhere likely in the order of a 10% boost to earnings of the market overall next year. We are watching developments closely.
Stock in Focus: Crown Resorts (CWN:AX)
Shares in Crown jumped on Friday after the casino operator announced a string of asset sales that could deliver a windfall of nearly $700 million. Crown appears to be continuing its divestment strategy, after previously selling its Macau holdings (Melco Crown) and continues to implement transactions as part of its debt reduction strategy.
The sales include two floors of its luxury Crown Sydney complex at Barangaroo to its largest shareholder, billionaire James Packer for $60m. It also has secured three other sales, the largest of which is a vacant lot in Las Vegas where it had planned to build a casino for US$300 million top Wynn resorts. The second sale is of around 4.2 million shares in gaming giant Caesars Entertainment Corporation which are worth about $US54 million. Finally, Crown is selling its 50% interest in the Packer family's luxury Ellerston property in the NSW Hunter Valley.
We have held a positive view on Crown as a beneficiary of our tourism boom investment theme. We are currently BUY rated on Crown.
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