...yes in­deed!

Finweek English Edition - - MARKETPLACE - Editorial@fin­week.co.za

Aspen has ended a medium-term cor­rec­tion from an overex­tended po­si­tion by breach­ing a sig­nif­i­cant buy­ing level at 33 000c/ share. A new R7.7bn deal with multi­na­tional phar­ma­ceu­ti­cal group As­traZeneca, which will see Aspen ac­quire the rights to sell a range of anaes­thetic medicines, an­nounced on 10 June, has buoyed the share price, send­ing it over 10% higher on the day.

The deal will be earn­ingsac­cre­tive for Aspen, which has seen its op­er­at­ing profit grow 41% to nearly R6.1bn in the six months to end De­cem­ber 2015, de­spite see­ing net rev­enue de­cline by 3%.

The group, which has a pres­ence in nearly 50 coun­tries around the world, also an­nounced ear­lier this month that it suc­cess­fully com­pleted a €3bn fund­ing round, with revolving credit fa­cil­i­ties pro­vided in eu­ros, Aus­tralian dol­lars and rand, with tenors of two to five years. The pro­ceeds will be partly used for re­fi­nanc­ing, as Aspen has spent in ex­cess of $2bn on ac­qui­si­tions in re­cent years, lead­ing to its gear­ing to­talling 44% by the end of De­cem­ber 2015.

Aspen said the fi­nance deal, which was more than two times over­sub­scribed al­low­ing it to raise €3bn, rather than the €1.5bn ini­tially planned, was “highly suc­cess­ful against the wider back­drop of sig­nif­i­cant mar­ket volatil­ity and the chal­leng­ing macroe­co­nomic en­vi­ron­ment”. How to trade it: A near-term pull-back from over­bought lev­els should be an­tic­i­pated. Sup­port re­tained above 30 000c/share would be a pos­i­tive sign – Aspen could re­cover its losses to­wards 41 595c/share in the short- to near-term. Go long at any level above 33 000c/share and main­tain a trail­ing fair stop-loss as Aspen ap­pre­ci­ates. Hold off long po­si­tions, should Aspen ca­pit­u­late through 28 700c/share.

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