Category: Stock Market

When investors think about the Fortescue Metals Group Limited (ASX: FMG) share price, they may be increasingly be focused on the green hydrogen push.

For readers that are unaware, Fortescue is one of the largest iron ore miners. But it’s now pushing into numerous green industry sectors.

Indeed, the company recently officially announced that it was transitioning from a pure resources company to a vertically integrated green energy and resources group.

It has an overarching green, fully renewable hydrogen initiative. Fortescue boasts that it now has the largest portfolio of green hydrogen, green ammonia, green iron ore, green iron and other green product developments in the world.

Some investors are loving the green shift

The Fortescue share price has gone up by more than 20% over the last month. Looking at the other two big miners, the Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP) share prices are up 10.2% and 13.1% respectively over that same time period. Fortescue is outperforming.

Speaking to the media, Fortescue CEO Elizabeth Gaines recently said according to The Australian:

If you track our share price over the last three, four years or longer, it will just match the benchmark. But more recently, in the last two to three months, we’ve seen that decoupling. We’ve actually outperformed the fall in the iron ore price and we outperform the peers.

Fortescue founder Dr Andrew Forrest says that Fortescue has approximately 170,000 shareholders. This number has doubled compared to a year ago. The increasingly green industrial business is seeing more environmental and ESG funds investing in Fortescue. The company’s leadership says that there are strong tailwinds of support across the investment community and the company is grateful for that.

Other investors are not a fan of Fortescue’s decarbonisation plans

However, whilst there may be a growing number of investors that are backing Fortescue, The Australian noted that there are some analysts and institutional investors that are feeling blue about the shift from Fortescue.

The newspaper reported that Morgans analyst Adrian Prendergast said to clients:

Questions are emerging over how much focus [Fortescue] is placing on renewables versus its core iron ore business.

The next five years in iron ore are likely to be more difficult than the last five years, warranting more focus or even possibly diversification into other mature markets. We…have lost conviction in the overarching strategy and capital framework.

Dr Forrest is not perturbed by some of the doubts by some quarters.

He pointed out to The Australian that Fortescue Future Industries has already made good progress with creating a green hydrogen fuel fell for a heavy truck and an ammonia-fuelled ship engine. Green trucks and trains will be operating at sites next year.

When talking about the huge sums of money needed to fund all of these deals, Dr Forrest said that he doesn’t need to own all of these green energy assets, just create them with FFI.

Fortescue Future Industries will create the renewable energy projects, then sell them at a profit to infrastructure investors and fund managers after cutting a deal to buy enough energy from the projects to produce green hydrogen. Reportedly, customers are “already lining up” for the offtake agreements.

Fortescue share price snapshot

Despite the resurgence of Fortescue shares in recent times, it’s still down 24% in 2021 with the iron ore price down roughly half from the peak earlier in the year.

The post What do investors really think of Fortescue’s (ASX:FMG) green hydrogen push? appeared first on The Motley Fool Australia.

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• Leading fund manager says these blue-chip ASX shares are buys right now
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• This broker is bearish on the Fortescue (ASX:FMG) share price

Motley Fool contributor Tristan Harrison owns Fortescue Metals Group Limited. 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 Bruce Jackson.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price has dropped 16% in a month.

How much of that decline is down to the new variant of Omicron is for each investor to guess. But, it adds a bit more uncertainty ahead for the ASX travel share sector which was talking about being in the middle of a demand and profitability recovery.

What has Flight Centre said about Omicron?

There have not been any official ASX announcements from Flight Centre over the last couple of months since the annual general meeting (AGM).

However, a few weeks ago the Australian Federation of Travel Agents chief executive Dean Long was quoted in the Australian Financial Review, who said a couple of weeks ago:

This is the worst-case scenario that we’re experiencing since they’ve reopened the border. The number one barrier to people booking travel was the fear of not returning home. Then on Saturday, our clients’ worst fear came to fruition.

Mr Long also said, at the time, that inquiries for overseas trips had fallen off a cliff.

The AFR had a small quote from Flight Centre CEO Graham Turner who said:

Countries can’t keep locking down, shutting borders every time there’s a new variant. This does look like an overreaction, but it’s very early days yet.

What are other investor thoughts on ASX travel shares and the Omicron variant?

Drummond Capital Partners chief investment officer Nick Reddaway suggested that the new variant isn’t the vaccine-breaking problem that the market had feared.

Though, there are other things to consider such as renewed COVID-19 restrictions in Europe, an increasingly aggressive Fed and ongoing Chinese property market doldrums.

Indeed, Mr Reddaway was quoted by the AFR as saying that Omicron may actually be a positive:

There is also an upside scenario where omicron becomes the globally dominant variant, doesn’t evade immune response and is less severe than delta, which would be a boon for global equity markets.

Is the Flight Centre share price an opportunity?

Credit Suisse seems to think so, rating the business as a buy with a price target of $23.30. The broker is still expecting a difficult year for the company in FY23, but is expecting profitability to return strongly in FY23. On Credit Suisse’s numbers, the Flight Centre share price is valued at 13x FY23’s estimated earnings.

However, other brokers are much less optimistic on the business. Ord Minnett rates the business as a sell, with a price target of just $13.72. This broker thinks that the longer-term isn’t as good for Flight Centre’s operating model, which could come with lower commissions and so on, which could harm profit margins.

On Ord Minnett’s estimates, the Flight Centre share price is valued at 35x FY23’s estimated earnings.

The post How is Omicron affecting the Flight Centre (ASX:FLT) share price and outlook? appeared first on The Motley Fool Australia.

More reading

• Zip (ASX:Z1P) shares just topped these end-of-year rankings
• Love ’em or hate ’em, Flight Centre (ASX:FLT) shares were the second most traded on Superhero this year. Here’s why
• These are the 10 most shorted ASX shares
• Is the Flight Centre (ASX:FLT) share price good value after falling 16% in a month?
• ASX 200 retail shares lift as Aussies head into Christmas with $240bn in savings

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Thursday, the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped into the red. The benchmark index fell 0.4% to 7,295.7 points.

Will the market be able to bounce back from this on Friday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to end the week in a positive fashion. According to the latest SPI futures, the ASX 200 is expected to open the day 23 points or 0.3% higher this morning. This follows a mixed night of trade on Wall Street, which late on sees the Dow Jones up 0.1%, but the S&P 500 down 0.7% and the Nasdaq down 2.4%. The latter does not bode well for ASX 200 tech shares on Friday.

Corporate Travel Management shares to return

The Corporate Travel Management Ltd (ASX: CTD) share price is due to return from its trading halt this morning. The corporate travel specialist’s shares were halted so it could raise $100 million via a $75 million institutional placement and a $25 million share purchase plan. The proceeds will be used to acquire the Australia and New Zealand corporate and entertainment travel businesses of Helloworld Travel Limited (ASX: HLO).

Oil prices storm higher

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could end the week on a positive note after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 2.3% to US$72.51 a barrel and the Brent crude oil price is up 1.8% to US$75.20 a barrel. Oil prices were boosted by record U.S. implied demand and falling crude stockpiles.

Annual general meetings

A number of ASX 200 shares are holding their annual general meetings this morning and could provide updates. This includes banking giant National Australia Bank Ltd (ASX: NAB) and agricultural chemicals companies Incitec Pivot Ltd (ASX: IPL) and Nufarm Ltd (ASX: NUF).

Gold price jumps

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a strong finish to the week after the gold price jumped. According to CNBC, the spot gold price is up 1.8% to US$1,796.9 an ounce. The gold price stormed higher after the US dollar weakened.

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

More reading

• Here are the top 10 ASX shares today
• Why ASX 200 shares could add ~$70bn during the Santa Rally
• Why are the ASX 200 gold miners losing ground this past month
• Woodside (ASX:WPL) share price dips amid corporate watchdog’s mega-merger verdict
• These 3 ASX 200 shares are topping the volume charts on Thursday

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 recommended Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you don’t have the funds to build a truly diverse portfolio, then exchange traded funds (ETFs) could be a quick fix.

This is because ETFs give investors access to a large number of different shares through just a single investment.

With that in mind, listed below are three ETFs that could be good options in 2022. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF tracks the performance of many of the largest technology companies that have their main area of business in Asia (excluding the Japan market). Among the ETF’s holdings are Alibaba, JD.com, Pinduoduo, Samsung, Taiwan Semiconductor, and Tencent. Given how these companies are among the fastest growing in the region and revolutionising the lives of billions of people, they have been tipped to generate strong returns in the future.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Another ETF to look at is the BetaShares Global Cybersecurity ETF. It provides investors with exposure to the leaders in the global cybersecurity sector. This includes companies such as Accenture, Cisco, and Cloudflare, Crowdstrike, and Okta. BetaShares notes that the cybersecurity sector is heavily under-represented on the ASX. As a result, this ETF ensures that Australian investors don’t miss out on the growing demand for these services.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Finally, if you’re interested in gaining exposure to the US tech sector, then the BetaShares NASDAQ 100 ETF could be a great way to do it. This ETF provides investors with access to the 100 largest non-financial shares on the NASDAQ index. This means you’ll be owning a slice of giants such as Amazon, Apple, Facebook/Meta, Microsoft, Netflix, and Tesla.

The post 3 ETFs for ASX investors in 2022 appeared first on The Motley Fool Australia.

More reading

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• How did the Betashares Global Cybersecurity ETF (ASX:HACK) perform in November?
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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. owns and has recommended BETA CYBER ETF UNITS and BETANASDAQ ETF UNITS. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS and BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Aspen Group Limited (ASX: APZ) share price climbed today following the release of its portfolio valuations for the first half of FY22.

The property group also announced the date it would pay dividend distributions to shareholders.

At the close of trade, the Aspen share price was up 5.76% trading at $1.75.

What’s the latest on Aspen’s property portfolio?

Aspen owns and operates 18 residential, retirement and short-stay properties across Australia, valued at more than $200 million.

This morning, the company released a revaluation of 6 properties — 5 located in New South Wales and one in the Northern Territory — representing “about a quarter” of its property portfolio. The company said the value of these properties had jumped around $17 million higher since 30 June this year.

In today’s release, Aspen attributed the 45% valuation increase to “an increase in adopted net income of 25% and reduction in average capitalisation rate (weighted by net income) of about 95bps”.

Aspen said this equated to an increase in net asset value (NAV) per security of around 9%.

Dividends distribution

Also today, the company announced that it would advise shareholders about its performance, outlook and updated distribution policy when it released its half-year results next year.

Shareholders can expect a total dividend distribution payment of 3.10 cents to be paid on 25 February next year.

The company has also reiterated that its distribution reinvestment plan has remained suspended.

Aspen share price snapshot

The Aspen share price has rocketed more than 45% higher in the past 12 months and is up 44% since the start of 2021.

Based on its current share price, the company has a market capitalisation of more than $233 million.

The post Here’s why the Aspen (ASX:APZ) share price shot up 6% today appeared first on The Motley Fool Australia.

More reading

• Here’s why EML (ASX:EML) shareholders are suing their own company
• What’s on the cards for the Bank of Queensland (ASX:BOQ) share price in 2022?
• Broker names 3 ASX consumer good shares to buy in 2022
• Here are the top 10 ASX shares today
• Why ASX 200 shares could add ~$70bn during the Santa Rally

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 Bruce Jackson.

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It was a relatively good day to be a shareholder of EML Payments Ltd (ASX: EML) shares this Thursday. Despite the losses of the broader S&P/ASX 200 Index (ASX: XJO), the EML share price ended up closing 1.55% higher at $3.27 a share.

That move comes despite news today that some EML shareholders have banded together to file a class action against EML. It will be heard in the Supreme Court of Victoria.

Shine Lawyers allege that an Irish subsidiary of EML, PFS Card Services Ireland Limited (PFS), “made misleading representations regarding their corporate governance and regulatory compliance”. According to the law firm, “thousands of Australian investors who put money into EML Payments” have joined the class action.

EML faces class action from its own shareholders

This relates to the well-publicised issues EML had with the Central Bank of Ireland earlier this year. Back in May, it became public that the Irish Central Bank had raised concerns over EML’s PFS business. The Central Bank alleged that the company was failing to adequately comply with anti-money laundering and counter-terrorism financing regulations. As we covered at the time, this had big implications for the entirety of EML’s European business dealings.

The reaction from shareholders was brutal. Within a day, the EML share price had lost more than 46% of its value. Even today, after EML has received something of an all-clear from the Central Bank, EML shares remain down around 37% from where they were before the concerns were aired publically.

Shine Lawyers point to the fact that “the revelation caused EML Payments Limited’s share price to plunge 46 per cent in a day, yet it took the Brisbane-based company four days to request a trading halt” as the reason for the class action.

Here’s some of what Joshua Aylward of Shine Lawyers class Action Practise, had to say:

The Central Bank of Ireland raised the alarm over potential non-compliance with anti-money-laundering and counter-terrorism financing regulations with PFS on May 13… This suggested the company’s European operations could be in jeopardy, but EML failed to disclose this to the Australian share market in a timely manner…

It is alleged that EML’s conduct showed disregard for its regulatory obligations and to the thousands of Aussies who invested their money into its businesses.

The class action is open to any investor that purchased EML shares between 19 December 2020 and 18 May 2021.

The post Here’s why EML (ASX:EML) shareholders are suing their own company appeared first on The Motley Fool Australia.

More reading

• Could the best be yet to come for the EML Payments (ASX:EML) share price?
• Top broker tips 27% upside for the EML (ASX:EML) share price
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended EML Payments. The Motley Fool Australia owns and has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Bank of Queensland Limited (ASX: BOQ) share price is testing its shareholders’ patience this year. Despite putting the pedal to the metal for the first three-quarters of the year — rising nearly 30% — shares in the 158-year-old bank are now only up 5.7% year-to-date.

For context, the S&P/ASX 200 Index (ASX: XJO) has handed out a gain of 9.1% (before dividends). An even more comparable comparison is the ASX financials sector. The overall sector has pulled a gain of more than 18% since the start of 2021, mostly thanks to the majority of the big four conjuring up 15% or more increases.

Nonetheless, as we get closer to crossing the threshold from one year to the next, it’s time to slide the Bank of Queensland share price under the microscope and get a sense of where it could be heading in 2022.

New year, same old bank

Many of us like to create New Year’s resolutions, though few follow through on the idealised ambitions. In 2022, shareholders will be watching that the bank follows through on its pre-commitments.

This follows a barrage of shareholder complaints regarding the Bank of Queensland’s lack of current technology at the annual general meeting (AGM) on Tuesday.

To which the bank admitted it had underinvested in during the past. However, chair Patrick Allaway gave shareholders the commitment that a digital transformation would be underway as part of a new strategy launched last year.

As part of the grilling for the bank’s outdated tech, Australian Shareholders’ Association’s Kelly Buchanan said:

For years and years, BoQ has been promising to get on top of its antiquated technology system. How can your long-suffering shareholders be confident, that with the acquisition of ME Bank, this time it’s different?

While current technology seems to be a problem for numerous major Australian banks, the Bank of Queensland has the added complexity of recently tieing up a substantial amount of money in the acquisition of ME Bank. That investment came to a total of $1.325 billion.

What are analysts expecting for the Bank of Queensland share price?

It appears brokers are optimistic about a good year for the Bank of Queensland share price. In fact, two brokers currently have price targets that are above the financial institution’s current valuation.

Firstly, the team at Citi has a buy rating on the bank, alongside a $10 price target. This would suggest a potential upside of 25% to the current Bank of Queensland share price.

Secondly, analysts at Goldman Sachs are expecting good things from the Aussie bank in 2022. The broker also has a buy rating and a $9.67 price target.

Finally, based on its latest earnings the Bank of Queensland share price is trading on a price-to-earnings (P/E) ratio of ~12.8 times. While this is above the industry average, investors could be paying a premium for the bank’s impressive growth between FY20 and FY21.

The post What’s on the cards for the Bank of Queensland (ASX:BOQ) share price in 2022? appeared first on The Motley Fool Australia.

More reading

• Goldman Sachs names 2 ASX 200 shares to buy
• Bank of Queensland (ASX:BOQ) shares: $8 one day, $10 the next?
• Top brokers name 3 ASX shares to buy today
• Why Bank of Queensland, Imugene, Webjet, and Zip shares are pushing higher
• Why the Bank of Queensland (ASX:BOQ) share price is racing 5% higher today

Motley Fool contributor Mitchell Lawler 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 Bruce Jackson.

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The team at Bell Potter has been busy this week looking at its top ASX share picks for 2022.

On this occasion, I’m going to look at what the broker is saying about the fast-moving consumer goods (FMCG) sector. Here are its top picks in the sector for next year:

What did the broker say?

Bell Potter’s analyst, Jonathan Snape, notes that investing in the sector can be high risk and volatile.

He commented: “Investments in the Agricultural & FMCG sector should be considered high risk and come with volatility. For this reason we tend to focus on stocks where we see either: a structural uplift in ROIC through the cycle, cyclical growth stories, or counter-seasonal crop exposures.”

With that in mind, here are the picks:

A2 Milk Company Ltd (ASX: A2M)

Bell Potter is sticking with this embattled infant formula company. The broker currently has a buy rating and $7.70 price target on its shares. This is due to its belief that A2 Milk’s earnings can grow materially in the coming years.

It explained: “We see the scope for EPS to double by FY26e, if A2M can execute on the China offline expansion strategy, while recovering 50% of the lost sales (from FY20-21) in English label IMF. The catalyst to regaining lost English label sales is likely to be boarder reopening and the return of international students. Exiting the loss making US assets or navigating a turnaround at the MVM asset would likely accelerate this turnaround. We do not see the current share price as reflecting this potential.”

Bega Cheese Ltd (ASX: BGA)

This dairy company is another consumer goods share that Bell Potter is a fan of. Particularly given its recent acquisition of the Lion Dairy & Drinks business. Bell Potter has a buy rating and $6.45 price target on its shares.

The broker commented: “The acquisition of Lion Dairy & Drinks (LDD) and targeted synergy base is expected to drive a material step change in returns for BGA over the next three years. In addition, we see BGA benefiting from recent upward moves in both commodity price drivers (SMP returns up +32% since Jun’21) and price increases on private label milk for only the second time in 20 years.”

Synlait Milk Ltd (ASX: SM1)

A final consumer goods share that Bell Potter has on its list for 2022 is dairy processor Synlait Milk. It has a buy rating and $4.40 price target on the company’s shares. The broker believes the company is well-placed for a recovery in earnings after a difficult period.

Bell Potter explained: “SM1’s FY21 performance is reflective of a business that completed the commissioning of major capital works, while experiencing an unfavourable shift in sales mix and the added complexity of unwinding IMF inventory positions accumulated over 2H20-1H21. Looking into FY22-24e, a stabilisation in A2M demand, commencement of a material new nutritionals contract at Pokeno and execution against the consumer based strategy in liquids and cheese are expected to drive a material recovery in operating earnings and the share price.”

The post Broker names 3 ASX consumer good shares to buy in 2022 appeared first on The Motley Fool Australia.

More reading

• Experts tip 2 beaten up ASX shares for gains in 2022
• What I’d do with these ASX dogs of 2021: expert
• This broker thinks the A2 Milk (ASX:A2M) share price is heading to $7.70
• How the A2 Milk (ASX:A2M) share price tanked 5% in November
• Down 50% in 2021, is the A2 Milk share price a cheap buy?

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 recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Today, the S&P/ASX 200 Index (ASX: XJO) took a trip to the downside amid key data from the Reserve Bank of Australia (RBA). Once again, RBA governor Philip Lowe rejected forecasts that the central bank will look to raise rates next year. Additionally, the jobs report beat expectations as 366,000 jobs were added in November. Despite this, the benchmark index finished 0.43% lower at 7,295.7 points.

The Australian share market was pulled in two different directions today, with the laggards winning out. While ASX-listed tech shares largely followed in the footsteps of their US-listed counterparts, other sectors struggled. The worst offending was the health care sector. Shares in CSL Limited (ASX: CSL) brought down the market with its 8.1% fall.

However, the question is: which shares delivered the biggest returns to investors on the ASX today? Here are the top ten stocks that came through for investors:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Liberty Financial Group (ASX: LFG) was the biggest gainer today. Shares in the financial services company surged 8.41% despite there being no news out from the company. Find out more about Liberty Financial here.

The next biggest gaining ASX share today was WiseTech Global Ltd (ASX: WTC). The logistics software company jumped 6.90% backed by a more positive sentiment towards tech shares. Uncover the latest WiseTech Global details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Liberty Financial Group (ASX: LFG)	$5.80	8.41%
WiseTech Global Ltd (ASX: WTC)	$59.38	6.90%
Novonix Ltd (ASX: NVX)	$9.30	5.56%
Lifestyle Communities Ltd (ASX: LIC)	$21.66	5.40%
Healius Ltd (ASX: HLS)	$5.28	4.97%
New Hope Corporation Ltd (ASX: NHC)	$2.09	4.50%
Pro Medicus Ltd (ASX: PME)	$60.45	4.01%
Uniti Group Ltd (ASX: UWL)	$4.61	3.83%
Pointsbet Holdings Ltd (ASX: PBH)	$7.07	3.51%
Imugene Ltd (ASX: IMU)	$0.47	3.30%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Thursday
• Why has the WiseTech (ASX:WTC) share price popped 6% to a new all-time high?
• CBA (ASX:CBA) share price up amid another loan rate hike
• ASX 200 (ASX:XJO) midday update: CSL sinks, Qantas’ $1.1bn+ first half loss
• Qualitas (ASX:QAL) shares are hitting the ASX boards today following its IPO

Motley Fool contributor Mitchell Lawler owns Pro Medicus Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd., Pointsbet Holdings Ltd, Pro Medicus Ltd., and WiseTech Global. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. and WiseTech Global. The Motley Fool Australia has recommended Pointsbet Holdings Ltd and Uniti Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Don’t fret about today’s market sell-off as at least one prominent expert is predicting that ASX shares are entering the Santa Rally, which is their strongest trading period for the year!

If this prediction comes to pass and if history is any guide, shares on the S&P/ASX 200 Index (ASX: XJO) could generate gains of around $70 billion for shareholders during this Santa Rally.

The Santa Rally describes the strong trading period in the two weeks before Christmas till early January.

Santa Rally for ASX shares is an 85% probability

No one can quite explain why ASX shares perform well at the end of the year, but the Santa Rally is one of the most reliable seasonal trends on the market.

Over the last 41 years, the Santa Rally has visited ASX shares 35 times, according to Bell Potter’s high-profile trader Richard Coppleson.

“Well, if we do what we have done most times in the last 41 years – then yes – markets are close to entering a sweet spot of no resistance,” said Coppleson. “That could see a decent rally over the next 3 weeks.”

Billions in Christmas gifts for ASX investors

What this suggests is that if you bought the market now and held on for the next 14 to 16 trading days, there is an 85% chance that you will make money.

What’s more, the average gain in the 35 out of the last 41 years is an impressive 2.9%. Applying that to the total market capitalisation of all ASX 200 shares, this average return will equate to $69 billion.

Not a bad gain for a two-week trade! What’s more, Coppleson noted that 25% of the time, the average gain was over 6%.

A magical time for ASX shares

The Santa Rally phenomenon isn’t confined to ASX shares. The US market also experiences the magic of Christmas. The Santa Rally has struck the S&P 500 (INDEXSP: .INX) index in 21 of the last 27 years, although its average gain is a more modest 2%.

No one can quite definitively say why this happens. Efficient market theorists will claim that arbitrage opportunities like this should not exist.

But science can’t beat magic – not during Christmas!

Possible ASX share drivers behind the Santa Rally

However, there may be a few logical reasons behind the Santa Rally, according to Coppleson. One reason is the lack of major capital raises as we head full swing into the holiday period. You can imagine CSL Limited (ASX: CSL) and its bankers scurrying to close off its record-breaking $6.3 billion cap raise before fund managers go off on their holidays.

Capital raises suck money out of the market as fund managers may sell shares in other companies to participate. Coppleson estimates that cap raises take in around $2 billion a month on average.

That equates to the amount of superannuation money going into markets per month, which will be directed to buying shares instead during the Christmas to New Year period.

Doesn’t take much to move ASX shares up

Further, any buying during this time will be met with few sellers as professional investors have closed their books for the year and won’t be doing much, if any, selling.

Also, there’s a wall of ASX bank dividends that will hit the market from the middle of December. A chunk of it will be devoted to a dividend reinvestment plan (DRP), which puts further buying pressure on some ASX shares.

These include the Westpac Banking Corp (ASX: WBC) share price, National Australia Bank Ltd. (ASX: NAB) share price, Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price and Macquarie Group Ltd (ASX: MQG) share price.

Dividends boost adds to Christmas cheer

“I’ve also worked out that $9.48 billion in dividends are paid 15th Dec NAB, 16th Dec ANZ, 21st Dec WBC & MQG 14th Dec,” said Coppleson.

“So, if you assume a 18% DRP on NAB, ANZ & WBC (So about $1b less cash), then actual cash that will come back into the market is about $8.5 billion.”

T’is the season to be receiving fellow Fools!

The post Why ASX 200 shares could add ~$70bn during the Santa Rally appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau owns Australia & New Zealand Banking Group Limited, CSL Ltd., Macquarie Group Limited, National Australia Bank Limited, and Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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