Home / Daily Market Update / ASX update; Magellan takes a swing

ASX update; Magellan takes a swing

Daily Market Update

ASX nears three month low, Magellan (ASX:MFG) takes a swing, US markets head lower

The selling pressure continued on Monday, the ASX 200 (ASX:XJO) falling another 0.7%, now nearing the low points of June. 

The selling was widespread, National Australia Bank Ltd (ASX:NAB) and BHP Group Ltd (ASX:BHP) down 1.4% and 1.2% respectively. 

  • The biggest news came from Magellan Financial Group (ASX:MFG), announcing a $140 million on balance sheet investment, in the latest Australian investment bank, Barrenjoey Capital Partners

    The investment has been made from MFGs balance sheet, not within one of its many equity funds; shares fell 3.4% on the news. 

    This decision is a difficult one to judge, a fund manager providing seed capital for an investment bank, where generally it’s the other way around; I’ll be reserving judgement for at least six months. 

    At the other end of the spectrum Platinum Asset Management Ltd (ASX:PTM) CEO Andrew Clifford has suggested there are signs of a “fully fledged investment mania” driving the incredible rally in stocks.

    Gold miners as gold exposure, Virgin Money stalls, Harvey Norman recovery continues

    OceanaGold Ltd (ASX:OGC) and St Barbara Mining Ltd (ASX:SBM) reiterated the very real difference between an exposure to gold bullion and an investment in gold miners. 

    Both fell around 7% on Monday after announcing unexpected production setbacks or worse than anticipated results. 

    I’m not suggesting that gold miners can’t be quality investments, rather that for those seeking a hedge against volatility, physical bullion is the most suitable option. 

    Australian-listed UK ‘challenge’ bank Virgin Money UK (ASX:VUK) fell 9.2% after receiving a number of broker downgrades as the threat of UK-wide lockdowns increase along with an increasing likelihood of negative rates, which would further hit profit margins. 

    Harvey Norman Holdings Ltd (ASX:HVN) added 2.1% after providing a positive update to investors, global sales increasing 30.6% from July to September and Australian franchise sales recovering by a further 34%. The result was a 180% increase in profit across July and August. 

    The company is benefitting from a diversion of spending on travel, but its yet to be seen what impact the end of Job Keeper payments will have in March.

    Tik Tok deal on again, off again, Dow falls 500 points, still waiting on stimulus

    US markets were once again hit with a combination of rising geopolitical risk and a lack of clarity on fiscal stimulus. 

    After appearing to cool relations with China, the deal made by Oracle Inc. (NASDAQ:ORCL) and Walmart Inc. (NYSE:WMT) to acquire 20% of the US operations of Tik Tok appears dead after Trump threatened to renege on his approval. The Chinese are similarly pushing back on the threat to their own privacy. 

    Over the weekend a Federal Judge blocked Trump’s ban on the WeChat app, suggesting it was an important communication tool for Chinese Americans, showing the checks and balances of the US system still have some power. 

    A second stimulus deal for a stuttering US economy facing the threat of another wave of lockdowns appears unlikely, hitting financials with JP Morgan Inc. (NYSE:JPM) heading 3.1% lower. 

    The banking sector was also hit by a investigative story highlighting many illicit transactions occurring through global banks. 

    Overall, the S&P 500 finished down 1.3%, but the technology sector, behind Adode (NASDAQ:ADBE) and Zoom Communications (NASDAQ:ZM) held the Nasdaq to a loss of just 0.1%. 

    This trend is set to continue as the world comes to terms with an impending election, stuttering growth and the threat of a second wave of lockdowns due to the resurgence of COVID.

    Print Article

    ’60/40 is being resuscitated’: fixed income down but not out

    Year-to-date, fixed income markets are about as bad as equities. But Michael Leithead, fixed income and senior portfolio manager at EFG Asset Management (EFGAM), is more positive than he’s been “in a long time.” “We’re at a point now where the market has priced in quite a lot of global policy tightening, and that restores…

    Lachlan Maddock | 24th Jun 2022 | More
    ‘It’s a business about character’: Kudu hunts deals Down Under

    New York-based Kudu Investment Management has returned to Australia in hopes of pulling off a repeat of its 2020 deal with Channel Capital. “The asset management business is an absolutely beautiful business, to the mind of anybody involved in it. It’s rock solid; it has high margins; and the people are interesting,” says Charlie Ruffel,…

    Lachlan Maddock | 24th Jun 2022 | More
    APRA grows concerned on consolidation, flags new standards

    The wave of consolidation racing through the superannuation industry is now raising eyebrows at the prudential regulator. With the massive amounts of FUM being devoured, some funds are suffering indigestion. “This may manifest at the industry level at the point of transfer in a SFT, for example where an administrator has a backlog of transfers…

    Lachlan Maddock | 24th Jun 2022 | More
    News and OneVue go live with brightday
    Investor Strategy News | 11th Jan 2015 | More
    Perrignon off to HK with Credit Suisse
    Investor Strategy News | 22nd Dec 2013 | More
    Sports betting as a new asset class
    Investor Strategy News | 3rd Jul 2016 | More
    BlackRock ahead of consensus with bullish view
    Investor Strategy News | 14th Jan 2017 | More
    HSBC talks re-open old NAB wound
    Lachlan Maddock | 9th Mar 2022 | More
    Statewide seeds bespoke Apostle fund
    Lachlan Maddock | 23rd Mar 2022 | More