Day: 18 November 2022

The Lovisa Holdings Ltd (ASX: LOV) share price is on course to end the week with a solid gain.

In early trade, the fashion jewellery retailer’s shares are up over 4% to a record high of $26.85.

This means the Lovisa share price is now up almost 35% since the start of the year.

Why is the Lovisa share price charging higher?

Investors have been buying Lovisa’s shares again following the release of a trading update ahead of the company’s annual general meeting.

According to the release, global comparable store sales for the first 19 weeks of FY 2023 continued the strong trajectory from the first 7 weeks and were up 16.1% on FY 2022 year to date.

Management notes that comparable store sales continue to be measured based on stores open and able to trade. Stores temporarily closed due to government-imposed lockdowns in either year are not included in the calculation for that period.

Total sales for the period are up 60% over the prior corresponding period.

Store expansion continues

Lovisa also revealed that it continues to expand its store network, with 47 net new stores opened for the year to date. This comprises 61 new stores opened and 14 closures.

This has taken Lovisa’s store network to 676 stores across 26 countries, including four new markets opened in recent months. These include Canada and Poland, which opened at the end of FY 2022, and Namibia and Hong Kong in FY 2023.

This means that since this time last year, the company is currently trading over 100 more stores in 5 additional markets.

But it won’t be stopping there! Lovisa’s first stores in Italy, Mexico, and Hungary are due to open in the coming weeks.

The post Lovisa share price charges to record high on 60% sales boost appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why did these ASX 200 shares just crack new, multi-year highs?
• How I’d build a portfolio by investing in top ASX shares now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa Holdings Ltd. The Motley Fool Australia has recommended Lovisa Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There are a number of factors I like to look at when thinking about ASX dividend shares.

A large number of ASX shares do pay dividends. However, that’s not the only thing I look for.

Names like Commonwealth Bank of Australia (ASX: CBA) and Woodside Energy Group Ltd (ASX: WDS) are known for their dividend payments. I don’t think size is an essential part of the picture.

For my own portfolio, these are the sorts of things I’m thinking about:

Growth potential

For me, a good dividend is at the end of the financial conveyor belt. I want to look at good companies, with seemingly good management, in attractive industries. The most important thing to remember is that a dividend is paid from the earnings that a business makes.

If a company’s profit were to steadily go down year after year but keep paying the same dividend, then the dividend will become unsustainable at some point, such as when the dividend payout ratio goes above 100%.

However, if earnings are growing, then obviously the profit can’t be falling. A growing profit suggests the business is doing well, and may imply the dividend can grow. A combination of rising dividends and climbing profit may lead to pleasing total shareholder returns.

A good ASX dividend share may not necessarily grow profit every single year. But, I’m looking for businesses that can grow their profit at a pleasing rate over the long term.

Companies such as Cleanaway Waste Management Ltd (ASX: CWY), Sonic Healthcare Limited (ASX: SHL), and Metcash Limited (ASX: MTS) are examples of names that are growing their dividend and underlying profit over time.

Dividend yield

A business isn’t necessarily an ASX dividend share just because it pays a dividend. It needs to have a certain level of dividend yield to count. With interest rates normalising, or already normalised, I think companies probably need to have a yield of at least 2.5%, or perhaps even around 3%, to truly count.

As an example, Altium Limited (ASX: ALU) has one of the most impressive dividend records going on the ASX. It has increased its annual dividend every year over the past decade. The actual payment has multiplied in size over the years. But, it currently has a dividend yield of around 1.25%.

Names like Accent Group Ltd (ASX: AX1), APA Group (ASX: APA), Baby Bunting Group Ltd (ASX: BBN), JB Hi-Fi Limited (ASX: JBH), and Telstra Group Ltd (ASX: TLS) are examples of companies with higher dividend yields.

Resilience

I’m typically looking for companies that have a good chance of continuing to pay good dividend income even during tougher times. I don’t want the dividend stream to disappear at the time I’m relying on it most.

Dividends aren’t term deposits, they can be cut. In 2020, we saw dividend cuts from many names including CBA and Transurban Group (ASX: TCL).

But, there were plenty of businesses that did grow their payout during the COVID-19 years, such as Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Brickworks Limited (ASX: BKW), Rural Funds Group (ASX: RFF), Pacific Current Group Ltd (ASX: PAC), and Duxton Water Ltd (ASX: D2O).

Businesses that have resilient earnings profiles could be able to continue to pay dividends, even during tough times.

The post 3 key things I look for when buying ASX dividend shares appeared first on The Motley Fool Australia.

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More reading

• 5 of the craziest things making news on the ASX this week
• Experts name 2 ASX 50 shares to buy
• Which stocks are in the Vanguard Australian Shares Index ETF (VAS) right now?
• Why is the Altium share price charging higher?
• Why Altium, Pendal, Terracom, and Webjet shares are pushing higher

Motley Fool contributor Tristan Harrison has positions in Altium, Brickworks, DUXTON FPO, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended APA Group, Brickworks, RURALFUNDS STAPLED, Telstra Corporation Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Accent Group, Baby Bunting, JB Hi-Fi Limited, Metcash Limited, and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This year has been a fascinating and painful one for ASX growth shares. Strong inflation and higher interest rates have punished the valuations of many assets.

But, as Warren Buffett’s famous advice goes, “be fearful when others are greedy, and greedy when others are fearful”.

Investors have certainly become fearful during this year. ASX growth shares have taken a hit as long-term growth isn’t worth as much today because of higher interest rates (due to discounted cash flow valuations).

Buffett once explained why interest rates matter so much:

“The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are, the less that present value is going to be. So every business, by its nature…its intrinsic valuation is 100% sensitive to interest rates.”

I think the current environment has made the below two ASX growth share options attractive:

Betashares Nasdaq 100 ETF (ASX: NDQ)

This is an exchange-traded fund (ETF) that gives exposure to 100 of the largest non-financial companies listed on the NASDAQ. It comes with an annual management fee of 0.48%.

Plenty of the top holdings are probably recognisable to readers: Apple, Microsoft, Amazon.com, Alphabet, Tesla, Nvidia, PepsiCo, Meta Platforms, and Costco.

While a lot of the portfolio is invested in tech-related companies, there are other sectors represented in the holdings, including utilities, industrials, consumer staples, and so on.

I think names like Apple and Microsoft have resilient earnings – smartphones and Microsoft Office software seem very embedded in daily life.

I do feel higher interest rates have reduced the intrinsic value of many businesses, but some share prices have fallen significantly. It’s not often we get the chance to buy, for example, Microsoft shares 28% lower than where they were at the start of a year.

The Betashares Nasdaq 100 ETF price has dropped 26% in price in 2022, so I’m thinking this ASX growth share is good value today for the long term.

Despite the decline, over the past three years it has delivered an average return per annum of 15.2% to 31 October 2022.

Gentrack Group Ltd (ASX: GTK)

The Gentrack share price is another that has taken a dive this year – it’s down more than 25%.

Gentrack says it designs, builds and delivers “cloud-first revenue and customer experience solutions found at the heart of leading utilities and airports around the world”.

Momentum seems to be returning to the business. It’s yet to report its FY22 result for the year to 30 September 2022, but in February 2022 and May 2022, it advised that annual revenue was going to be $115 million (up from FY21 revenue of $105.7 million).

It had also said that FY22 earnings before interest, tax, depreciation and amortisation (EBITDA) was expected to be in the “low single digits” in terms of how many millions of dollars it expects to make.

But at the end of September, it said it’s forecast to make revenue of $125 million and that EBITDA is expected to be in the mid-to-high single digits of millions of dollars.

The ASX growth share continues to win new customers as well as expand with existing clients.

It has also said that it’s “well-positioned to capture the sizeable market opportunity created by the transformation of the utilities and airports across the world”.

I think the opening up of borders can also have a useful impact on the airport software side of the business, as airports will have more earnings to spend.

Gentrack itself is growing its investment in research and development, as well as sales and marketing. This should help growth in the future.

The post 2 ASX growth shares I reckon are buys right now appeared first on The Motley Fool Australia.

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More reading

• Why the Betashares Nasdaq 100 ETF (NDQ) is on my buy radar right now
• 2 top ETFs for beginner investors to buy
• Thinking about buying your first ASX shares right now? Here are 3 stocks I’d invest in
• 3 ETFs for ASX investors to buy right now
• 2 of the best ETFs for ASX investors to buy next week

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BETANASDAQ ETF UNITS, Costco Wholesale, Meta Platforms, Inc., Microsoft, Nvidia, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a big week for ASX fans – plenty of exciting news has likely kept their eyes glued to the market.

Keep reading to learn of five of the most exciting announcements to hit the Aussie bourse.

The S&P/ASX 200 Index (ASX: XJO) has slipped 0.3% so far this week. Meanwhile, the All Ordinaries Index (ASX: XAO) is down 0.15%.

5 things making huge news on the ASX this week

Cannon-Brookes’ boardroom victory

First up was Mike Cannon-Brookes’ victory over the AGL Energy Limited (ASX: AGL) board at the company’s annual general meeting (AGM).

The tech billionaire put forward four nominations for the board, of which only one was recommended by the company.

Despite the board’s pushback, shareholders voted to elect all four nominations, marking Cannon-Brooke’s second triumph over those in control.

ASX 200 travel favourite survives ‘valley of the shadow of death’

More weird and wonderful news came amid Webjet Limited (ASX: WEB)’s earnings for the first half. Particularly, as managing director John Guscis opened its earnings conference with the altered lyrics of Coolio’s Gansta’s Paradise:

As Webjet walked through the valley of the shadow of death we took a look at our life to see what was left, and it looked like there is more than ever before.

The company also flipped the script on its earnings. It closed the period in the green for the first time since the COVID-19 pandemic‘s onset – revealing a $32 million underlying profit.

Lithium stocks soar then plummet

It was a wild week for most ASX lithium favourites, with many roaring up to 12% higher on Monday before plunging as much as 14% on Tuesday.

The mammoth moves came amid word China will ease some of its COVID-19 restrictions – seemingly good news for commodities. Tuesday’s slump might have also been in response to reported bearishness from Goldman Sachs and a major cathode maker, as well as a falling lithium futures contract.

Topping off the lithium news this week, Pilbara Minerals Ltd (ASX: PLS) flagged its maiden dividend and posted a successful lithium auction result.

ASX’s $250m hit as CHESS replacement abandoned

Meanwhile, mind-blowing news was released by ASX Ltd (ASX: ASX). The market operator has hit the emergency stop button on its CHESS upgrade – ongoing since 2015.

It also revealed its upcoming earnings will take a $245 million to $255 million hit as the replacement system’s capitalised software is derecognised.

The decision was made after an independent review found the shiny new software might not meet ASX’s requirements.

CBA posts $2.5b quarterly profit

Finally, ASX 200 goliath Commonwealth Bank of Australia (ASX: CBA) made news this week. The banking giant announced a whopping $2.5 billion first-quarter profit.

It also revealed a 9% jump in income and a 4.5% lift in expenses. 

The post 5 of the craziest things making news on the ASX this week appeared first on The Motley Fool Australia.

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More reading

• Pilbara Minerals share price on watch as chair describes maiden dividend as ‘great source of pride’
• 5 things to watch on the ASX 200 on Friday
• IGO shares dip as investors hear of ‘a pipeline of growth opportunities’ at AGM
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. The Motley Fool Australia has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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All eyes will be on the Pilbara Minerals Ltd (ASX: PLS) share price today after the company held its annual general meeting after market close on Thursday.

At the meeting, Pilbara chairman Anthony Kiernan hailed shareholders who “stayed the course”. All resolutions presented at the meeting were passed.

The Pilbara Minerals share price has risen 53% in the year to date. However, it has lost nearly 11% in the past week amid a turbulent week for ASX lithium shares.

Shareholders have been ‘rewarded’

In a speech to shareholders, Kiernan recalled in 2020 he urged shareholders to “keep the faith” when the lithium industry was “experiencing a very difficult period — with the promise that better times lay ahead”.

He continued: “It is gratifying to see that those who stayed the course and heeded that advice have been rewarded…”

Pilbara is expecting to pay its maiden dividend from FY23, as my Foolish colleague James reported this week. Management plans to pay 20% to 30% of its free cash flow.

Commenting on the dividend, Kiernan said:

It will be a great source of pride for the board and management to be able to return value to Pilbara Minerals’ shareholders, some of whom have stuck by the Company during the highs and the lows.

Rising lithium demand

Pilbara believes it is in a good position to capitalise on rising lithium demand due to key investments in the last 12 months.

This includes the demonstration plant with Calix, P680 expansion project, and JV project with POSCO.

Pilbara said it is working towards making a final investment decision on the P1000 project. If approved, this will lift production capacity to up to one million tonnes per annum (Mtpa) of spodumene concentrate.

Commenting on lithium demand, Kiernan said:

The lithium demand is being driven by the growing use of lithium-ion batteries in clean energy technologies, in particular electrical vehicles.

A trend that is continuing to gather pace, supported by strong investment and decarbonisation targets set by governments across the world.

Pilbara expects the lithium deficit to be the equivalent of about “18 Pilgangooras” by 2040. Pilgangoora is Pilbara’s 100%-owned lithium project in Western Australia.

Pilbara delivered net profit after tax (NPAT) for the first time in FY22 of $561.8 million. Revenue surged 577% to $1.2 billion.

Pilbara Minerals share price snapshot

The Pilbara Minerals share price has surged 102% in a year, while it has climbed 2.3% in the last month.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has fallen 3% in the last year.

Pilbara Minerals has a market capitalisation of about $14.7 billion based on the current share price.

The post Pilbara Minerals share price on watch as chair describes maiden dividend as ‘great source of pride’ appeared first on The Motley Fool Australia.

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More reading

• IGO shares dip as investors hear of ‘a pipeline of growth opportunities’ at AGM
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• ASX lithium shareholders rejoice! Expert tips lithium price to hit $100K
• Why is the Pilbara Minerals share price pushing higher today?
• Pilbara Minerals share price on watch amid booming lithium auction price

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The OZ Minerals Limited (ASX: OZL) share price will be on watch this morning.

This follows the announcement of a new takeover approach from BHP Group Ltd (ASX: BHP).

OZ Minerals share price on watch

The OZ Minerals share price could be heading higher today after the company revealed that BHP has improved its previous $25.00 per share offer.

According to the release, BHP has submitted a revised non-binding indicative proposal to acquire 100% of OZ Minerals by way of a scheme of arrangement for a cash price of $28.25 per share. BHP stressed that this offer price represents the best and final price BHP is willing to offer under the revised proposal, in the absence of a competing proposal.

Offer accepted

The good news for BHP, is that this final offer has been enough for the OZ Minerals board, which intends to unanimously recommend the proposal to shareholders as being in their best interests.

This is in the absence of a superior proposal and subject to the two parties entering into a binding scheme implementation agreement following completion of BHP’s confirmatory due diligence. It will also be subject to an independent expert concluding that the proposal is in the best interests of shareholders.

While the offer is only a 7.4% premium to the OZ Minerals share price at Tuesday’s close, it represents a 49.3% premium to where its shares were trading prior to the initial proposal back in August.

The release notes that OZ Minerals will have the right to consider paying a franked dividend to shareholders prior to the transaction being implemented. However, the cash consideration price will be reduced by the cash component of any dividends or return of capital.

Management commentary

OZ Minerals chair, Rebecca McGrath, commented:

The Revised Proposal from BHP follows a period of Board-level engagement, securing a circa $1.1 billion increase to the Initial Proposal. It is the Board’s view that progressing the Revised Proposal, including providing BHP with access to due diligence, is in the best interests of OZ Minerals’ shareholders and other stakeholders. The Board will continue to update shareholders as appropriate.

OZ Minerals CEO, Andrew Cole, added:

BHP’s Revised Proposal is a clear reflection of OZ Minerals’ unique set of highly strategic, quality assets in quality jurisdictions and an enviable multigenerational growth pipeline of copper and nickel assets in strong demand due to global electrification. We look forward to working with BHP in a collaborative way to progress the Revised Proposal in the best interests of OZ Minerals’ and its stakeholders.

The post OZ Minerals share price on watch after accepting BHP’s $28.25 per share takeover offer appeared first on The Motley Fool Australia.

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More reading

• Is a weak US dollar good for ASX 200 mining shares?
• Which stocks are in the Vanguard Australian Shares Index ETF (VAS) right now?
• How to have your ASX 200 dividend cake and eat it too
• What’s going on with ASX 200 mining shares on Thursday?
• OZ Minerals shares remain halted ahead of potential BHP takeover offer update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Three S&P/ASX 200 Index (ASX: XJO) shares will be trading ex-dividend next week.

Income investors take note.

If you want to receive the payouts, you’ll need to own these ASX 200 shares at least one day before they trade ex-dividend. If you buy them after this date, the seller retains the dividend.

You should also be aware that a company’s share price tends to fall by a similar amount to its per share payout once the stock trades ex-dividend.

With that said…

These three ASX 200 shares are trading ex-dividend next week

First up we have farm products company Elders Ltd (ASX: ELD).

The Elders share price closed yesterday at $10.40.

Elders’ board declared a final dividend of 28 cents per share. The stock trades ex-dividend on Monday, making today the last day for investors to buy the ASX 200 share if they want that payout. The payment date is 16 December.

Elders also paid a 28 cent interim dividend, bringing its trailing yield to 5.4%, 30% franked.

The second ASX 200 share trading ex-dividend next week is Amcor PLC (ASX: AMC).

The international plastics packaging company trades ex-dividend next Tuesday, meaning investors will need to buy shares today or on Monday to receive the payout. The payment date is 13 December.

The most recent dividend the Amcor board declared was 19.4 cents. Amcor closed yesterday trading for $17.55 per share. With its other dividend payments factored in, Amcor trades on a trailing yield of 4.1%, unfranked.

Which brings us to ALS Ltd (ASX: ALQ), the third ASX 200 share that’s going ex-dividend next week.

The professional technical services provider trades ex-dividend next Thursday, 24 November. That gives investors who want the 20.3 cents per share payout until Wednesday to buy shares. The payment date is 16 December.

ALS closed yesterday trading for $12.12 per share, giving it a trailing yield of 2.9%, unfranked.

The post 3 ASX 200 shares trading ex-dividend next week   appeared first on The Motley Fool Australia.

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More reading

• Analysts name 2 beaten down ASX dividend shares to buy
• Here are the top 10 ASX 200 shares today
• Why Elders, Flight Centre, Perpetual, and Telstra shares are dropping
• Why is this ASX 200 share crashing 17% today?
• 3 ‘champion’ ASX shares to buy and hold: Bell Potter

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Amcor Limited. The Motley Fool Australia has recommended Elders Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re looking for retirement portfolio options, then you may want to look at the shares listed below.

Here’s why these ASX shares could be top options for retirees:

Centuria Industrial Reit (ASX: CIP)

The first ASX share to consider for a retirement portfolio is this industrial-focused property company.

Centuria Industrial owns a portfolio of high quality industrial assets that has been constructed with the aim of delivering consistent income and capital growth to investors.

The company’s portfolio is heavily weighted to areas of the economy that are still growing and are in demand from tenants. This includes properties linked to the production, packaging, and distribution of consumer staples, telecommunications, and pharmaceuticals.

One broker that is positive on the company is Moelis. It currently has a buy rating and $3.69 price target on its shares. The broker is also forecasting dividend yields of over 5% for investors over the next couple of financial years.

National Storage REIT (ASX: NSR)

Another top ASX share to consider for a retirement portfolio is National Storage.

It is one of the region’s largest self-storage operators with over 225 centres in the ANZ market. Through this growing network the company provides tailored storage solutions to over 90,000 residential and commercial customers.

National Storage has been growing at a solid rate over the last decade thanks to its strong position in a fragmented market and its growth through acquisition strategy. The good news is that management still sees plenty of room to grow both organically and through acquisitions and developments.

Jarden currently has an overweight rating and $2.90 price target on its shares. The broker is also expecting dividend yields greater than 4% over the next two financial years.

The post 2 excellent ASX shares for a retirement portfolio: brokers appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Currency implications on your ASX shares can get confusing.

One such example is if you hold stocks for mining companies.

Many of those operate in Australia but sell the commodities in US dollars, because that’s the de facto currency of the global resources market.

Traditionally, the thinking is that a strong US dollar is favourable for investors of businesses like that.

The idea is that costs are spent in the lower Australian dollar, therefore minimising expenses — then the income is maximised as customers pay in the higher US dollar.

“In simple terms, a higher Australian dollar hurts exporters and companies that make money offshore while benefiting importers that end up paying less for their purchases,” said Finder expert Prashant Mehra in a blog post.

However, one expert recently disagreed with this theory.

No, a weaker US dollar is better for ASX miners

Shaw and Partners portfolio manager James Gerrish told a Market Matters Q&A that the equation is not that simple.

In fact, he believes the opposite of the conventional wisdom actually applies to local resource producers.

“It’s more a case of a weak US dollar is bullish for commodities as opposed to a strong Australian dollar, although they usually go hand in hand,” he said.

“The likes of crude oil, copper, gold etc are all priced, bought and sold in US dollars — hence a weaker greenback helps drive up the prices of these resources in US dollar terms.”

So when this happens, ASX-listed mining companies reap higher revenue, which “usually more than outstrips the accompanying strength in the Australian dollar”. 

“But, of course, this may not always be the case.”

Classic example is right now

Gerrish took Thursday last week as a “classic” example.

That night US inflation figures came in lower than market expectations, sending the US dollar weaker. 

“The Australian dollar roared back above 66 US cents helped by a weak greenback, the commodities surged higher — e.g. gold up US$40/oz,” he said.

“While the S&P/ASX 200 Index (ASX: XJO) was trading up +2.7% at 11am, many resource heavyweights outperformed — e.g. Fortescue Metals Group Limited (ASX: FMG) +5%, Sandfire Resources Ltd (ASX: SFR) +6.3%, Evolution Mining Ltd (ASX: EVN) +6.6% and BHP Group Ltd (ASX: BHP) +3.5%.”

Gerrish’s team, therefore, likes the current conditions for resources and is overweight in the sector.

The post Is a weak US dollar good for ASX 200 mining shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Thursday, the S&P/ASX 200 Index (ASX: XJO) was back on form and pushed higher. The benchmark index rose 0.2% to 7,135.7 points.

Will the market be able to build on this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to end the week in the red. According to the latest SPI futures, the ASX 200 is expected to open 5 points or 0.1% lower this morning. In late trade in the United States, the Dow Jones is down 0.15%, the S&P 500 has fallen 0.55%, and the Nasdaq has dropped 0.55%.

Oil prices tumble

Energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a difficult finish to the week after oil prices sank overnight. According to Bloomberg, the WTI crude oil price is down 3.8% to US$82.30 a barrel and the Brent crude oil price is down 2.4% to US$90.65 a barrel. Oil prices fell on concerns over Chinese demand.

Webjet remains a buy

The Webjet Ltd (ASX: WEB) share price remains great value according to analysts at Goldman Sachs. The broker was impressed with the online travel agent’s first half results, which came in well ahead of expectations. Goldman commented: “WEB’s 1H23 results reported a strong beat across both the Webbeds and Webjet OTA business, cementing our view that the business is structurally improved vs. pre-pandemic times.” Its analysts have retained their buy rating with an improved price target of $6.90.

Gold price falls

Gold miners including Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a subdued end to the week after the gold price fell overnight. According to CNBC, the spot gold price is down 0.65% to US$1,764 an ounce. Traders were selling gold after the US dollar and treasury yields strengthened.

Annual general meetings

There are a good number of annual general meetings being held on Friday. This includes infant formula company A2 Milk Company Ltd (ASX: A2M), integrated real estate company Lendlease Group (ASX: LLC), infection prevention company Nanosonics Ltd (ASX: NAN), and data centre operator NEXTDC Ltd (ASX: NXT). These companies could provide trading updates at their respective events.

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

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More reading

• Is it finally safe to buy ASX shares now?
• What dragged on the Santos share price today?
• Why did the Flight Centre share price trounce the ASX 200 today?
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor James Mickleboro has positions in NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nanosonics Limited. The Motley Fool Australia has positions in and has recommended Nanosonics Limited. The Motley Fool Australia has recommended A2 Milk and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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