Home / Uncategorized / Financial Planner’s market update – ASX to open strongly

Financial Planner’s market update – ASX to open strongly

The ASX 200 (ASX:XJO) finished 0.5% higher behind a strong rally in financials, up 2.5%, following positive comments on a potential COVID-19 treatment.
Uncategorized

Vaccine hopes send markets higher, ASX to open strongly, banks keep running

The ASX 200 (ASX:XJO) finished 0.5% higher behind a strong rally in financials, up 2.5%, following positive comments on a potential COVID-19 treatment.

National Australia Bank Ltd (ASX:NAB) lead the sustained rally, adding 4.2%, whilst Qantas Ltd (ASX:QAN) jumped 3.0% after announcing another 2,500 job cuts.

The administrators of Virgin Airlines Holdings Ltd (ASX:VAH) confirmed that unsecured bondholders including many direct investors would stand to receive between 8 and 13 cents in the dollar return; shareholders on the other hand receive nothing.

  • Despite the continuing rally in the ASX 200 it remains 17% below its all-time and well behind the likes of the US.

    Another busy day of reporting season, with our updates as follows:

    • Qube Holdings Ltd (ASX:QUB), -2.4%, 9% increase in revenue. Profits fell 15.4% to $104 million.
      • Weakness was felt across the business as global trade was forced to slow, but particularly in container volumes and automotive shipments.
      • Despite the disruption’s management were able to deliver earnings growth over the prior period.
      • The dividend was cut from 2.9 cents to 2.3 cents per share which was in line with expectations.
      • Comment: Tough conditions, but market dominance supports the dividend and a growing demand for supply chain solutions, BUY.
    • Ansell Ltd (ASX:ANN), -1.9%, was perfectly positioned for the onset of COVID-19 delivering strong growth across the board.
      • Revenue increased 7.7% to $1.6 billion pushing earnings 37.9% higher to $219 million and profit along with it adding 42.1% to $158.7 million.
      • The result was a substantially higher than expected dividend of 50 cents per share, 7% higher.
      • Comment: Strong (but expected) result, dividend a highlight, HOLD.
    • Hub 24 Ltd (ASX:HUB), -1.5%, delivered record annual inflows of $4.9 billion Revenue increased 37% to $74.3 million as group assets under management reached $17.2 billion, a 34% uptick.
      • The result was a 60% increase in profit, to $24.7 million and importantly margin expansion from 33.3% to 38.6% due to the benefits of scale.
      • Management are now targeting total funds under management of $28 – $32 billion.
      • Comment: Solid result, albeit with AUM growth behind expectations, HOLD.
    • Seven West Media Ltd (ASX:SWM) reported a 14% fall in revenue to $1.2 billion and a $200 million loss.
      • The result was due to an already weakening advertising market, with a 40% fall in the June quarter alone.
      • On the positive side, management have used the pandemic to renegotiate their expensive sports rights, saving $87 million on the AFL alone.
      • The digital division was a highlight, reporting a 40% increase in revenue and 53% in consumption growth.
      • Comment: Reflects a sector in decline, future hangs on the ability to go digital, AVOID.

    Mixed overseas lead, but US markets higher, Europe weak, ANT goes marching on

    Both the S&P 500 and Nasdaq reached new all-time highs for the second straight day, adding 0.4% and 0.8% respectively.

    It was the ‘socially distanced’ companies like Gap Inc. (NYSE:GPS) and Starbucks Corp (NYSE:SBUX) leading the market higher as vaccine hopes grew and ahead of a speech by the Federal Reserve that is expected to make no changes to current accommodative monetary policy.

    Facebook Inc. (NASDAQ:FB) announced a series of platform changes that pivot into e-commerce, it finished 3.5% higher.

    As flagged in this column previously, Alibaba’s (NYSE:BABA) financial services group, ANT Financial, filed for what could be one of the world’s biggest IPO in both Hong Kong and Shanghai.

    The company has over 1 billion users, processed $17 trillion in transactions and is expected to attract a $225 billion valuation.

    Drew Meredith

    Drew is publisher of the Inside Network's mastheads and a principal adviser at Wattle Partners.




    Print Article

    Related
    Emerging market resilience paves the way for new opportunities says Amundi

    Despite recent China woes, emerging markets are poised to enjoy a growth advantage over developed peers, creating opportunities for investors across all major asset classes. Countries in Latin America are paving the way for a bout of monetary policy easing in the second half of the year; the prospect of lower interest rates has helped…

    Investor Strategy News | 1st Aug 2023 | More
    Mercer adds new wealth Pacific CEO role to support growth strategy

    The appointment of industry veteran Cathy Hales, who started in the newly created role on Monday, will support Mercer’s growth strategy across investments and retirement in the Pacific region, the company said. Her remit will include the $63 billion Mercer Super Trust.

    Lisa Uhlman | 26th Jul 2023 | More
    Global pensions sketchy on net zero

    A survey of 50 global pension funds shows that many are losing hope of achieving their net-zero goals, and the sector is still “in the foothills” of the transition.

    Lachlan Maddock | 13th May 2022 | More
    Popular