The Secret Broker: Well it’s one for the money and two for the show… shoes……
The Secret Broker
The Secret Broker
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After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.
An interesting week, this week.
The only thing going up are COVID cases in NSW whilst everything else is heading south.
BHP (ASX:BHP) announced it will offload its oil and gas assets to Woodside Petroleum (ASX:WPL) for $19.1bn.
It’s certainly a massive deal, though a wheel fell off the company spin when everyone realised it’s not a sale for cash, but for shares.
Turns out to be just shoe-shuffle only and in USA trading and, after everything had been digested, Australia’s largest mining bluechip was rudely marked down by 9.3% in a two-finger salute to the deal.
The deal is so big that it even got a mention in the Financial Times, though it wasn’t exactly a glowing report.
All I can think about is the fees that are involved. There is even a clause in the shuffle that states that if WPL pulls out, BHP has granted an option to sell its 26% of Scarborough to WPL for US$1 billion.
‘Some bankers are going to get very rich out of this deal,’ I jealously thought to myself after reading that.
But wait. There’s more!
Not only is BHP shuffling its oil and gas assets around, it’s also creating a US$80bn merger by buying out all the shareholders in its UK listed sister company, on a one for one scrip deal.
Yet even more fees.
It turns out that BHP’s sister company, the BHP Group PLC, is the second largest listing in the FTSE 100 index. Delisting it will create a major hole that needs filling in, as some UK funds cannot hold overseas equities.
The largest company in the FTSE 100 is actually – wait for it – AstraZeneca.
Yes, that’s right.
You can buy shares in them whilst getting your jab and make money out of all those COVID queues. They were up 1.7% on the day BHP fell 9%.
The other bit of COVID-related news that you may have missed is the planned phasing out of the magstripe on the back of your credit card.
As everyone is now tapping ‘n paying germ-free, the little stripe is becoming redundant.
Invented by IBM in America in the 1960s, it was first used by the CIA for spy identity cards.
However, before it got to that, the engineer working for IBM was having trouble working out how to attach the magnetic tape to a blank plastic swipe card.
It wasn’t until he took both pieces home one night that a solution was born. (Mrs Broker loves this bit.)
When shown the two separate pieces of plastic, the engineer’s wife Anthea just ironed them together.
Voilà. Anthea solved in two seconds a problem the mighty IBM had been trying to for years. All whilst doing her ironing.
Starting in 2024, Mastercard will issue cards without the magnetic stripe on their back and by 2033, it is estimated all payment cards will be just chipped.
That’s a long runway to phase something out but Americans have been very slow at adapting to tap and pay, unlike Australians, who have led the world in take-up per capita.
Lastly, something the kids put me onto this week was PayID, where you can instantly transfer funds to another Australian bank account, just by knowing the owner’s mobile number.
The next time you open up your banking app, go to Pay Anyone. You should see an option that says ‘pay a mobile number’.
If you were to enter my mobile number, my details will instantly appear and you add the amount you wish to send me and press send. Instantly it will appear in my designated bank account.
So, to recap the week;
– I have discovered that BHP’s sister company is the second-largest listed company in the UK, with only AstraZeneca being larger.
– That the magstripe on billions credit/debit cards was made possible by a clever housewife with an iron; and
– You can instantly pay someone via their mobile phone number.
Then, just as I am finishing off this article I get a message from a broking mate in the UK, telling me he is recovering from COVID ok, but has lost all sense of taste and smell.
Turns out he was so desperate for a late night lockdown drink that he had to crack a bottle of his father-in-law’s homemade vinegar, or as his father-in-law calls it, “nettle wine”. Said mate ‘Cracked Open Vinegar In Desperation’, as he put it, and completely blew up his taste buds.
He also sent me this YouTube video, which I suggest you do not watch when wearing a mask, as like Mrs Broker, you may inhale it from laughing too much.
Here’s to a better week next week. Keep calm and carry on.
Also, RIP Sean Lock. Your humour will be sorely missed.
Feel free to contact him with your best stock tips and ideas.