For super funds and their advisers

ASX200 pushes towards record

21.1.21

ASX200 pushes towards record, commodity reports, is Zip (ASX:Z1P) the new BNPL leader? 

The ASX200 (ASX:XJO) benefited from a strong overseas lead and news that unemployment has fallen to just 6.6% to finish 0.8% higher.

Surprise, surprise, technology was the leader once again, adding 2.7% after BNPL player Zip Co (ASX:Z1P) released a quarterly update.

The group once again doubled customer numbers hitting 5.7 million with more in the US (3.2m) than Australia after only a short period of operation.

Revenue increased 88% to a record $102 million during the quarter, hitting $40.2 million in the month of December alone.

Transaction value once doubled on the previous quarter to $1.6 billion with over 38,000 merchants signed up; the result was a 23.1% increase in the share price.

As a shareholder in Z1P, it has been a wild ride in 2020, particularly as the sector faces increasing competition.

Not unexpectedly, shopping centre owner Vicinity Centres (ASX:VCX) devalued their property portfolio by $570 million, or 4%, due to the continued weak trading of their Melbourne CBD assets.

This wasn’t a surprise to the market as the underlying value of the assets remains well above the current price, shares fell 2.5% on the news.

Cleanaway (ASX:CWY) quits, Link (ASX:LNK) upgrades guidance, Netwealth FUA records continue

Waste management business Cleanaway Ltd (ASX:CWY) fell 8.5% after CEO Vik Bansal announced his departure from the company.

The CEO has faced a number of bullying complaints after driving the recovery of the business from its difficult position several years ago to the $5 billion company it is now.

Netwealth Group (ASX:NWL) followed Hub 24 (ASX:HUB) update reporting a 14% increase in funds under administration to $38.8 billion; a 36% increase from 2019. 

The driver was increasing inflows of $2.6 billion from new advisers joining the platform along with 74.1% growth in their discretionary managed accounts business, which hit $7.6 billion.

Chair Jane Tongs, whom the Wattle Partners team have known and respected for many years, also decided to step down; shares finished 11.7% higher on the news.

Both Woodside Petroleum (ASX:WPL) and Santos (ASX:STO) announced strong oil and gas production for the quarter, with revenue up 32% and 16% respectively despite falling oil and gas prices.

Volume has been the key driver, but the sector continues to await more regulatory guidance, making it a difficult investment proposition.

More records broken, chip supplier ASML reports, rates mover higher again

Global sharemarkets continued their remarkable beginning to the year, the S&P500 and Nasdaq moving 0.1% and 0.6% higher respectively.

But it was the MSCI World Index, which holds a more diversified exposure to major global and not just US-based companies, which reached a new record.

The positive move came after the ECB committed to its EUR$1.85 trillion bond buying program and weekly US unemployment claims fell by 26k.

The US 10-year bond rate moved over 1.1% again, as Joe Biden’s first day in office saw growing confidence in a huge stimulus package and thus the hope for bumper corporate profits in 2021.

ASML (NASDAQ:ASML) which is a supplier of manufacturing equipment to semiconductor businesses like NVIDIA (NASDAQ:NVDA) reported a 7.5% increase in sales during the fourth quarter of 2020, hitting EUR$4.2 billion.

The full year result of $13.9 billion was an 18% increase with the company benefitting from forward sales of their units as consumer technology businesses face a huge demand for products ranging from smartphones to tablets as the digitisation trend continues.

Investors speaking of the gold rush used to talk about buying the ‘picks and shovels’ rather than the miners themselves, ASML is one such shovel in the tech gold rush.

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