Jun.22 — Bank of England Governor Andrew Bailey signaled a major shift in the central bank’s strategy for removing emergency stimulus, stressing the need to reduce the institution’s balance sheet before hiking interest rates.
Writing for Bloomberg Opinion, Bailey said such a plan would give officials more firepower in future crises. David Goodman reports on “Bloomberg Markets: European Open.”
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Jun.22 — U.S. Securities and Exchange Commission Chairman Jay Clayton was surprised and dismayed by the political battle that quickly erupted over his pending nomination to be the top federal prosecutor in New York, said people familiar with the matter. Derek Wallbank reports on “Bloomberg Daybreak: Europe.”
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Jun.22 — Hong Kong’s autonomy will be top of the agenda when European Commission President Ursula von der Leyen and European Council President Charles Michel hold video conferences today with Chinese Premier Li Keqiang and President Xi Jinping. Maria Tadeo reports on “Bloomberg Markets: European Open.”
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Jun.22 — National Australia Bank Ltd. Chief Executive Officer Ross McEwan discusses how the coronavirus outbreak is affecting global businesses and the banking industry, and the business implications of the rising tensions between China and Australia. He speaks at the Bloomberg Invest Global Summit. (Excerpts)
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The S&P/ASX 200 Index (ASX: XJO) essentially finished flat today, it rose 0.03% to 5,945 points.
The Victorian COVID-19 outbreak is causing angst for some parts of the share market on fears that the infection resurgence could cause a delay for an opening of state borders. There was one particular industry that saw a selloff:
The share price of Corporate Travel Management Ltd (ASX: CTD) fell by 8% today.
Webjet Limited (ASX: WEB) saw its share price fall by 5%.
The Qantas Airways Limited (ASX: QAN) share price dropped by 4%.
Infrastructure business Sydney Airport Holdings Pty Ltd (ASX: SYD) suffered a 1.6% share price drop.
The Flight Centre Travel Group Ltd (ASX: FLT) share price fell 4.1%.
New Zealand travel shares also suffered today. The Auckland International Airport Limited (ASX: AIA) share price dropped 1.9%, the Air New Zealand Limited (ASX: AIZ) share price fell 3.2% and the Serko Ltd (ASX: SKO) share price fell 3.2%.
Challenger is looking to raise capital from the market.
The institutional part of the capital raising will amount to $270 million. The second part is a non-underwritten share purchase plan (SPP) which is looking to raise up to $30 million.
The placement will be conducted at a fixed price of $4.89 per new share, which represents an 8.1% discount to the last traded price of $5.32.
The placement will mean 55 million new shares will be issued. This is approximately 9% of Challenger’s existing shares on issue.
According to reporting by the Australian Financial Review, the $270 million placement was covered by institutional investors by early afternoon.
The ASX 200 business said that investment grade fixed income asset risk premiums have widened significantly following the COVID-19 pandemic market sell-off. The annuity company thinks that there is a significant opportunity to generate pre-tax return on equity (ROE) returns of more than 20% on the capital backing the investments. The capital will be progressively deployed and expected to be ROE accretive once fully deployed.
The equity raise will strengthen Challenger Life’s capital position during this period of market uncertainty, with $300 million to be used as common equity tier 1 (CET1) regulatory capital.
The ASX 200 toll road business announced an update today.
It announced a distribution of 16 cents per stapled security for the half-year to 30 June 2020. This brings the total FY20 distribution to 47 cents per stapled security. The FY21 distribution will be in line with free cash, excluding capital releases.
There has been a progressive traffic recovery in line with easing government restrictions. Australian markets are improving “significantly” from the peak impacts in April. The rate of recovery differs across different markets with the removal of restrictions.
GWA Express Lanes traffic is recovering slower, reflecting the government restrictions in the Greater Washington Area.
In the week of 7 June 2020, total Transurban traffic was down 23% compared to the prior corresponding period. In the week of 14 June 2020, total Transurban traffic was down 21%. There has been a clear and steady recovery of traffic since Easter.
Metcash has reported its result for the full year to 30 April 2020.
The ASX 200 business saw its share price rise 1% in reaction to this news.
Total revenue increased by 2.9% to $13 billion. Including charge through sales, there was 2% growth to $14.9 billion.
The food division delivered sales growth. It achieved growth even if the positive uplift in sales due to COVID-19 in March and April is excluded. This is the first time supermarkets wholesale sales (excluding tobacco) reported underlying sales growth since FY12.
The liquor division delivered its seventh consecutive years of sales growth despite closures.
The hardware segment returned to positive sales growth in the second half of FY20 with strong DIY sales.
Group underlying earnings before interest and tax (EBIT), before AASB16, was $324.2 million. Excluding the impact of the loss of the Drakes supply and a lower contribution from lease resolutions, this was an improvement of around $12 million on last year.
The statutory loss after tax, after AASB16, of $56.8 million includes the impairment to goodwill and other assets of $242.4 million.
The Metcash board has decided to pay a final dividend of 6.5 cents per share, which brings the total dividend to 12.5 cents per share.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended Serko Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Last week was another up and down week for ASX 200 shares as investors weighed up the possibility of a renewed coronavirus wave against government stimulus measures.
The S&P/ASX 200 Index (ASX: XJO) climbed 1.6% to 5,942.60 points as the recent bull run continued to push share valuations higher.
While many tech and consumer staple companies surged in value, ASX 200 travel and media shares were hit hard.
Last week I had Woodside Petroleum Limited (ASX: WPL), Scentre Group (ASX: SCG) and Newcrest Mining Limited (ASX: NCM) shares on my watchlist.
The Scentre share price slumped 3.5% last week while Newcrest and Woodside shares climbed 2.4% and 2.8% higher, respectively.
Below are the 3 ASX 200 companies on my watchlist for this week as we prepare for what could be another good Aussie share market week.
One of the top shares that I’m watching this week is Transurban Group (ASX: TCL).
The Transurban share price climbed 3.1% higher last week to close at $15.16 per share. That means the Aussie infrastructure group’s shares have now surged 51.0% higher since 19 March.
I think Transurban could be a dark horse ahead of the August earnings season. The nature of COVID-19 could mean more people on toll roads rather than public transport in 2020 and 2021.
That would be good news for the ASX 200 infrastructure group’s earnings and its share price this year.
I always like to look at the previous week’s biggest movers as well. That means Afterpay Ltd (ASX: APT) is on my watchlist for this week after landing in the winner’s column last week.
The Afterpay share price surged 13.2% higher last week and continues to hit new record highs. Afterpay’s market cap has now rocketed to $15.7 billion and could be heading even higher.
Strong stimulus measures have propped up the Aussie economy in 2020. Particularly in Afterpay’s core demographics of young people, stimulus measures could mean more spending in discretionary sectors like retail.
If bad debts remain low then Afterpay could increase its sales both in Australia and abroad in 2020. That could accelerate the ASX 200 buy now, pay later group’s share price growth heading into next year.
My final ASX 200 share to watch this week is Southern Cross Media Group Ltd (ASX: SXL).
The Southern Cross share price jumped 2.6% higher on Friday to close the week the same as it started at $0.20 per share.
The Aussie media group has been one of the most volatile ASX shares since mid-February.
While I don’t know which way the Southern Cross share price is headed this week but it could be a good gauge of where investors think the media sector is headed in 2020.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Transurban Group. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Investors are torn between a pick-up in economic activity and fears of a second wave of COVID-19 cases.
The resurgence in the number of coronavirus cases in Victoria is adding to worries as the US continues to struggle to contain the outbreak.
While the S&P/ASX 200 Index (Index:^AXJO) swung between gains and losses to end flat on Monday, travel-related ASX stocks were the standout losers from today’s trade.
It looks like state borders will be locked down for longer than most expected with Victoria reporting 16 new COVID-19 cases over the weekend, according to the Australian Financial Review.
What’s even more worrying is that the source of the virus is unknown in a number of these cases.
Adding to the gloom in the sector are predictions that international travel is off the agenda until sometime in 2021. It may be the later half of next year before we can travel overseas or welcome international tourists.
Little wonder the Corporate Travel Management Ltd (ASX: CTD) share price is the second worst performer on the ASX 200 today with a 8% crash to $11.03.
But its peers aren’t far behind. The Webjet Limited (ASX: WEB) share price nosedived 5% to $3.78, the Qantas Airways Limited (ASX: QAN) share price dropped 4.1% to $4.19 and the Flight Centre Travel Group Ltd (ASX: FLT) share price declined by a similar amount to $13.05.
The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price didn’t escape the sell-off with JP Morgan warning that earnings may take longer than expected to recover.
The 97% plunge in passenger numbers going through our nation’s largest airport is only part of the problem.
The airport is likely to have to provide rent relief to its retail tenants while the fees it gets from its lucrative car parks will be nearly non-existent too.
Don’t count on Sydney Airport paying a dividend this year either, according to the broker. JP Morgan is only tipping a dividend of 25 cents a share in 2021 and 37 cents the following year.
The broker reckons fair value for the stock is $5.10 and that’s well below Sydney Airport’s closing price of $5.95.
There’s really no reason to be buying Sydney Airport in my view with no dividend and little scope for a re-rating in the nearer-term.
There are much better ASX shares to be looking at in this coronavirus-stricken market. The experts at the Motley Fool have picked a handful that are worth putting on your watchlist.
Find out what these stocks are for free by following the link below.
One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.
Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!
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Motley Fool contributor Brendon Lau owns shares of Webjet Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 share prices of the 3 major ASX gold miners below were higher on Monday following a lift in the gold price. Additionally, they were boosted by reports that the wealthy have been buying up gold, which could suggest a strong rally is coming. Lately, the gold price has also been supported by the decision of the US federal reserve to continue its quantitative easing as the world economy works through the current recession.
If your bullish on gold prices, gold mining companies are a great way to gain exposure. As the gold price moves higher they generally see an increase in sale prices of the precious metal. This boosts profits for shareholders.
The Newcrest Mining share price was up 3.69% on Monday. Newcrest has operations in Australia, Canada, Ecuador and Papua New Guinea. In Q3 of the 2020 financial year, Newcrest produced 519,000 ounces of gold. Its margin on this production was $742 per ounce. Since the end of March, the gold price has recovered more than 15%. This means that we can expect the margins that Newcrest receive to be significantly higher in the current period.
The Newcrest mining share price has recovered almost 50% from its 52 week low of $20.70. It is up 3.25% since the beginning of the year.
The Saracen Mineral Holdings share price is up 8.47% on Monday. Saracen is a reliable gold producer and has an impressive 7-year track record of meeting or beating its production guidance. Its production guidance for the 2021 financial year is 600,000 ounces or more. If higher gold prices remain this will fetch over $1.5 billion in revenue for the miner.
The Saracen Minerals share price is up 84% from its 52 week low of $2.81. Since June 2015, the Saracen Minerals share price has increased more than 10 fold from $0.45 cents to $5.17 on Monday.
The St Barbara share price was up 5.96% on Monday. This comes as investors rush into shares offering exposure to the precious metal. St Barbara has operations in Australia, Canada and Papua New Guinea. When St Barbara presented to analysts in May, it forecast that it would produce 385,000 ounces of gold in the 2020 financial year. This is lower than its usual production over the last 5 years and if the miner can boost production at a higher gold price, it could see significantly higher profits for shareholders.
The St Barbara share price is up 98% from its 52 week low of $1.615. It has returned 17.2% since the beginning of January.
Want to find more opportunities to make money from ASX companies? Click the link below.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
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Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 a source of income in this low interest rate environment, then I think the dividend shares listed below could be quality options.
Here’s why I think income investors ought to consider buying them:
I think ANZ would be worth considering right now. At around 13x estimated FY 2021 earnings and 0.9% FY 2021 book value, I think the banking giant’s shares are trading at a very attractive level. Especially for income investors. I expect the bank to pay a partially franked dividend of $1.05 per share in FY 2021. If this proves accurate, it means that ANZ’s shares currently offer investors a very generous 5.5% yield at present.
This exchange traded fund (ETF) gives investors exposure to all of the 200 companies listed on the S&P/ASX 200 Index (ASX: XJO) through just a single investment. This diverse group of shares includes the likes of the big four banks, mining giants, and countless REITs. While predicting what the yield will be in FY 2021 is difficult because of dividend deferrals and cuts, traditionally it is around 4% to 4.5%. I think this makes it a good option for income investors that don’t have enough funds to maintain a truly diverse portfolio.
Another top dividend share to consider buying is this conglomerate. I’m a big fan of the conglomerate due to the quality and diversity of its portfolio of businesses. I feel the majority of these businesses are well-positioned to deliver solid long term earnings growth. Combined with potential earnings accretive acquisitions in the near term, I think Wesfarmers could grow its dividend materially over the next decade. For now, I estimate that its shares offer investors a fully franked ~3.6% FY 2021 dividend yield.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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