Category: Stock Market

If you’d like to invest in the tech sector but aren’t sure which shares to buy, you could look at the two exchange traded funds (ETFs) instead.

These ETFs allow investors to buy and collection of tech shares through a single investment. Here’s what you need to know about them:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first tech ETF to look at is the BetaShares Global Cybersecurity ETF. This popular ETF gives investors exposure to the leading companies in the growing cybersecurity sector.

Included in the fund are global cybersecurity players Accenture, Cisco, Cloudflare, Crowdstrike, Okta, Palo Alto Networks, and Splunk. These companies appear well-placed for growth over the 2020s due to increasing demand for cybersecurity services.

One of the companies you’ll be owning a slice of is CrowdStrike. It is a provider of incident response and forensic analysis services via its Falcon platform. CrowdStrike’s services are designed to help businesses understand whether a breach has occurred. It then allows the user to respond and recover from a breach with speed and precision to remediate the threat.

Whereas Palo Alto Networks is the global leader in cybersecurity solutions. Its offering includes advanced firewalls and cloud-based products that extend firewalls to cover other aspects of security. It has over 85,000 customers across over 150 countries. From these customers it generated US$4.3 billion of revenue in FY 2021, which was up 25% year on year.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

Another tech ETF to consider is the VanEck Vectors Video Gaming and eSports ETF. This ETF gives investors exposure to many of the largest companies involved in video game development, eSports, and gaming related hardware and software.

Among the companies you’ll be owning are game developers Activision Blizzard, Take-Two and Electronic Arts, and graphics processing unit (GPU) developer Nvidia. VanEck notes that the increasing popularity of video games and eSports means that these companies are well-placed to benefit.

One of the companies in the fund is Take-Two. It is the game developer behind the Grand Theft Auto and Red Dead franchises. While it may have been some time since Grand Theft Auto V was released, its online offering continues to generate significant revenues from micro-transactions. Furthermore, a new expanded and enhanced version is due to be released soon ahead of a much-anticipated (but unconfirmed) sequel which is expected in the next couple of years.

As for Nvidia, it is the world’s leading GPU developer and sits at the forefront of modern technologies. Its GPU deep learning ignited modern artificial intelligence and is used by cryptocurrency miners.

The post 2 fantastic tech ETFs for ASX investors appeared first on The Motley Fool Australia.

More reading

• Own BetaShares Global Cybersecurity ETF (ASX:HACK)? Here’s what you’re invested in
• Potential buys: 2 compelling ASX shares
• 3 ASX shares to buy this week
• 2 ASX growth shares that could be buys in October 2021
• These ASX shares could be top options for growth investors

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 shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports 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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One expert has warned that many share market crashes have historically happened in October, and investors should act accordingly.

Already, the S&P/ASX 200 Index (ASX: XJO) has sunk 5.5% since its mid-August peak.

According to Switzer Financial director Paul Rickard, it’s “no surprise” that the market has been nervous after not seeing a correction since the COVID-19 crash in March 2020.

“October is ‘crash’ month,” he told Switzer Daily this week.

“Think back to the ‘Wall Street Crash’ of October 1929, ‘Black Monday’ of October 1987, the ‘Great Financial Crisis’ that started in October 2007 or even the ‘mini-crashes’ of 1989, 1997 and 2002.”

Rickard added that September broke an 11-month winning streak for the ASX 200.

“The S&P/ASX 200 lost 2.7% over the month to be up 11.3% in 2021. With dividends thrown in, the total return comes in at an impressive 14.8%.”

Don’t worry, momentum is strong

While the market is anxious about this month, Rickard analysed longer-term movements, which still show a strong upward trend.

He took the S&P 500 Index (SP: .INX) as a gauge, as the Australian market often follows the lead of the US.

“Although the spot index value has gone below the 30-day moving average, suggesting short term bearishness, it is miles away from its 300-day moving average – about 350 index points away,” said Rickard.

“Moreover, the Coppock indicator, which is a measure of relative strength, is very positive. Bottom line: the long term trend is in place and momentum is strong.”

The numbers for the Australian market are not quite as bullish, but “shows a similar story”.

“Locally, we are looking forward to lockdowns ending in NSW, and hopefully Victoria, and data to confirm that the economic recovery is rapid.”

‘Stack of money’ with nowhere to go

According to Rickard, the Reserve Bank’s message that interest rates would not rise until at least 2024 means “there is a stack of money moving into the share market”. 

“In October, this is being boosted by $8 billion from the Commonwealth Bank of Australia (ASX: CBA) and Woolworths Group Ltd (ASX: WOW) buybacks, and record dividend payments from major resource companies including BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG),” he said.

“One key watch point will be whether the iron ore price can stabilise around the US$110 a tonne level.”

Rickard’s conclusion is that while October could look “a little scary”, investors will buy up bargains after any significant dips to push prices back up again.

“While we will take our lead from the US, the most probable call is to say that by the end of the December quarter, the nervousness of September and October will look like a good buying opportunity.”

The post October is ‘crash’ month: Will history repeat for the ASX 200? appeared first on The Motley Fool Australia.

More reading

• CBA (ASX:CBA) warns iron ore price will fall by 27% in the next year
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares today
• ASX 200 (ASX:XJO) midday update: Pilbara Minerals jumps, Whitehaven Coal sinks
• Top broker upgrades the Super Retail (ASX:SUL) share price to buy

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 Bruce Jackson.

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Analysts from Commonwealth Bank of Australia (ASX: CBA) believe that the iron ore price is going to keep falling.

There are a number of different opinions out there, but this one comes from Vivek Dhar, an analyst for mining and energy commodities at CBA.

Despite the fact that the iron ore price has roughly halved over the last five months, the call is that iron ore could fall more than 25% to US$85 per tonne by the end of next year, according to reporting by the Australian Financial Review.

The main reason for that negative outlook is because of China’s efforts to reduce its emissions by cutting how much steel is being produced.

Mr Dhar reportedly wrote:

These steel output cuts, driven by emission reduction goals, aim to cap China’s steel output in 2021 at 2020 levels.

China’s steel output is crucial to iron ore prices because China accounts for 70 per cent ‑ 75 per cent of the world’s iron ore imports.

What do the big ASX 200 miners think about the iron ore price?

There are a few very large S&P/ASX 200 Index (ASX: XJO) miners on the ASX such as BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG).

The resources giant BHP released some thoughts on the iron ore price when it reported its FY21 result.

It noted that the iron ore prices have been elevated since the Brazil dam disaster that disrupted the iron ore market in early 2019. The miner said that conditions have been “particularly tight” since the second half of the 2020 calendar year, with a new record for the iron ore price. Lower iron ore production from some other major iron ore producers contributed to this.

However, BHP said:

Medium term, China’s demand for iron ore is expected to be lower than it is today [on 17 August 2021] as crude steel production plateaus and the scrap-to-steel ratio rises. In the long-term, prices are expected to be determined by high cost production, on a value-in-use adjusted basis, from Australia or Brazil. Quality differentiation is expected to remain a factor in determining iron ore prices.

However, BHP did say that it’s positive about the outlook for long-term global economic growth and commodity demand. Population growth, the infrastructure of decarbonisation and rising living standards are all expected to drive demand for energy, metals and fertilisers for decades to come.

The post CBA (ASX:CBA) warns iron ore price will fall by 27% in the next year appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares today
• Could the Fortescue (ASX:FMG) share price slide to $12.50 by Christmas?
• Own BHP shares? Here’s the latest on the miner’s nickel and EV battery play
• Could the Rio Tinto (ASX:RIO) share price reach $123 by the end of 2021?

Motley Fool contributor Tristan Harrison owns shares of 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 Telstra Corporation Ltd (ASX: TLS) share price will be on watch in the coming period as multiple experts name it their value pick.

Shares for the telecommunications company have already risen almost 29% this year, closing at $3.87 yesterday.

But with the S&P/ASX 200 Index (ASX: XJO) sinking 5.5% over the past few weeks, investors are increasingly looking for ‘safe havens’.

Pengana Australian Equities Fund analyst Mark Christensen said this week that Telstra has one large and reliable revenue source.

“Telstra has 25% of their valuation effectively tied up in a long-term bond with the government essentially — it’s with the NBN,” he told a Pengana webinar.

“[The contract] has a step-up linked to inflation … So if inflation does run away, Telstra benefits by having that income stream also accelerate.”

This means that the telco is resilient against inflation and interest rate hikes, according to Christensen.

Expect Telstra’s dividends to remain healthy

Ord Minnett senior investment adviser Tony Paterno also likes the look of the Telstra share price for its reliability through some possibly turbulent years.

“Management is targeting mid-single digit growth in underlying operating earnings to fiscal year 2025,” he told TheBull.com.au.

“It expects increasing earnings to be driven by mobile service revenue growth, improving consumer and small business fixed margins and further cost reductions.”

Paterno forecasts Telstra’s fully franked dividends to stay at least at the current level of 16 cents per share.

“Telstra plans to return any excess cash flow to shareholders – in the absence of merger and acquisition opportunities – via an unfranked special dividend, or further on-market share buybacks.”

The current dividend yield is 2.58%, although that jumps to more than 4% if all 16 cents, which includes special cash payments, is counted.

Telstra is actually Pengana Australian Equities Fund’s largest holding currently.

It’s positioning its portfolio to be defensive-dominated for the coming years, expecting hard times for the general market.

“[We’re] making sure we’ve got companies that, at the very least, will not lose in an interest-rate or inflationary environment,” said Christensen.

“But more than that, we [aim to] find winners — those that benefit.”

The post Why these experts say the Telstra (ASX:TLS) share price is tempting right now appeared first on The Motley Fool Australia.

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• 3 ASX shares protected from rising inflation and interest rates
• Here’s what happened to the Telstra (ASX:TLS) share price in September
• When was the worst ever day on the Telstra (ASX:TLS) share price chart?
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• 2 ASX dividend shares with fully franked yields of more than 5% today

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 owns shares of and has recommended Telstra Corporation 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 your risk tolerance allows for it, having a little exposure to the small side of the market could be worth considering.

This is because if you can identify a future mid or large cap share while it is still in its infancy, you could potentially generate outsized returns in the future.

With that in mind, I have picked out two small cap ASX shares that brokers rate highly. They are as follows:

Adore Beauty Group Limited (ASX: ABY)

Adore Beauty is a growing online beauty retailer. It was founded in a Melbourne garage by Kate Morris and James Height back in 2000.

Since then, it has evolved into an integrated content, marketing, and ecommerce retail platform in order to better meet customer needs.

At the end of FY 2021, the company had 818,000 active customers. This was up 38% over the 12 months. Together with a 7% increase in its average revenue per customer, this led to Adore Beauty reporting a 48% jump in revenue to $179.3 million.

The good news is that this is still only a very small slice of the Australian beauty and personal market worth an estimated ~$11 billion a year. This gives Adore Beauty a very long runway for growth, particularly given the low penetration of online beauty sales compared to other Western markets.

Morgan Stanley is positive on the company’s long term outlook. So much so, it has an overweight rating and $6.00 price target on Adore Beauty’s shares.

Serko Ltd (ASX: SKO)

Another small cap to look at is Serko. It is an online travel booking and expense management provider. While times have been hard because of the pandemic, demand is starting to pick up and is likely to continue doing so as the vaccine rollout gathers pace and borders reopen.

Another big positive is the game-changing Booking.com deal, which has seen the launch of the new Zeno powered ‘Booking.com for Business’ platform. In August the company had migrated over 150,000 activated existing businesses onto the new platform, with more to follow.

This comes at a time when Serko notes industry trends are turning favourable because of the pandemic. It advised that risk and cost management will be the key priorities for organisations as they return to travel. As its Zeno product has a number of product capabilities to address the challenges of post-pandemic business travel, it expects to benefit.

Macquarie is positive on Serko. It currently has an outperform rating and NZ$8.31 (A$7.92) price target on its shares.

The post Brokers name 2 small cap ASX shares to buy 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. owns shares of and has recommended Serko Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Serko Ltd. 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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You’ve probably heard of NFTs by now.

It stands for non-fungible token, with the non-fungible bit meaning they’re unique and can’t be swapped out with a duplicate work.

Broadly speaking, they’re one-of-a-kind digital art. Unlike regular digital productions, though, they rely on cryptocurrencies and the blockchain to ensure they cannot be identically reproduced.

That’s NFTs in a nutshell. But, if you’re like many Aussie investors, you may not know how to go about valuing them. Or, indeed, why they have any value at all.

So, are NFTs a bubble awaiting a pin or the next big investment theme?

The answer could be a bit of both.

What was the first NFT?

To gain a broader insight into the risks and rewards of investing in NFTs, we turned to Ray Brown, market analyst at Australian crypto exchange CoinSpot.

First, we wanted to know how long they’ve actually been around.

Brown told the Motley Fool:

In 2012, Colored Coins hit the scene, and many still argue that they are the very first NFTs to exist. They’re made of small denominations of a bitcoin [Bitcoin (CRYPTO: BTC)], and can be as small as a single satoshi, the smallest unit of a bitcoin.

Colored Coins can be used to represent a multitude of assets and have multiple use cases including property, coupons, the ability to issue your own crypto, issue shares of a company, subscriptions, access tokens and digital collectables.

This was a big step for Bitcoin’s capabilities back then, which Brown said, “opened the door to further experimentation in applying blockchain technology for other purposes, laying much of the initial groundwork for NFTs”.

And Colored Coins look to have sparked a range of related work. According to Brown:

Closely after, a string of other similar projects followed, including the peer-to-peer financial platform Courterparty, Cryptopunks, Dapper Lab’s CryptoKitties, and Ethereum-based VR platform, Decentraland which lets players buy up empty parcels of 3D virtual space. Decentraland’s ICO [initial coin offering] raked in US$26 million in just half a minute.

The 2 highest valued non-fungible tokens to date

NFTs tend to get the most media attention, and pop up on ASX investors’ radars when they sell for mind boggling sums of money.

With that in mind, we asked Brown which 2 have fetched the highest selling prices to date.

His answer, “Everydays: The First 5000 Days by Beeple.”

The artwork from “veteran digital artist Beeple” was bought earlier this year by Bitcoin billionaire Vignesh Sundaresan (aka MetaKovan) for an extraordinary US$69.4 million.

Coming in at number 2, with a sale price of US$11.8 million, is CryptoPunk #7523 (aka Covid Alien) by Larva Labs, sold by Sotheby’s auction house in June 2021.

Are NFTs the 21st century version of Tulip Mania?

The chief concern among any would be investors in NFTs is whether they’ll hold their value. Or are they akin to soaring Dutch tulip prices in 1636, which promptly collapsed in 1637.

Brown told The Motley Fool:

Yes, some NFTs have built hype and excitement much like Tulip Mania. But it’s not always the case. And given we are often talking about art or tokens that provide utility, the value proposition is far more subjective.

NFTs are proving they are more than just a “craze”, and have many real life applications, beyond just digital art and collectibles.

He also drew the distinction that, unlike tulips, non-fungible tokens aren’t perishable. That gives investors a longer timeline to recoup any money, should they lose value. “As long as the collector doesn’t sell the unique NFT, the asset will retain value over time,” he said.

The potential risks

One of the most important factors to consider before making any investment is the risk involved.

And investing in NFTs, as you’d expect, comes with its own unique set of risks.

Among those, Brown pointed out that:

Most NFTs don’t protect collectors and investors from fraud and theft. There have been a few instances of fake websites, where NFTs hosted on the platform have disappeared and faced copyright and trade infringements.

On Nifty Gateway, a digital art online auction platform for NFTs, some user wallets were compromised and robbed of their entire NFT collection.

The potential rewards

Having touched upon the risk end of the scale, we moved onto the potential rewards on offer.

Brown broke those potential rewards down as follows.

First, the investor has true ownership of the non-fungible token they purchase:

NFTs create an ecosystem where artists can authenticate the actual ownership of their work by recording the metadata on-chain. Typically, most art pieces are physically sorted, which exposes them to the risk of being stolen or duplicated. NFTs eliminate these shortcomings by allowing artists to keep the records of the actual copy on the blockchain network.

Second is access to decentralised finance (DeFi) NFT services:

Some NFT projects such as Hoard marketplace are providing DeFi services which allows users to buy, sell, loan or rent NFTs. The platform empowers developers with tools to integrate digital art, in-game items and domain names with the Ethereum (CRPTO:ETH)  blockchain.

Other potential benefits are growth prospects and value preservation:

The NFT market is growing by the day, which means most NFTs should only become more valuable and innovative as time goes on. The growth prospects of NFTs are significant and present more opportunities for creatives and investors to join the market.

And NFTs have created an ecosystem where artists can preserve their art and yield income for generations.

Then, according to Brown, there are the utility benefits:

NFTs enable businesses and individuals to acquire and protect value in real-world and virtual objects.

One NFT project by Gary Vaynerchuk called VeeFriends, is all about utility and access, meaning each NFT will have different levels of access and activities through the smart contract attached with each investment.

How can an investor value an NFT?

Now that we’d gained a better understanding of the potential risks and rewards, we asked Brown how an investor would go about valuing an NFT.

He told The Motley Fool that the value is generally calculated as, “Utility + Ownership History + Future Value + Liquidity Premium.”

Brown explained:

Depending on the asset that the NFT represents, value is weighted differently across these four components. This framework can be used by investors to evaluate if an NFT is worth investing in, and by NFTs developers to think of ways to increase the value of NFTs to attract users and investors.

The post Are NFTs a bubble awaiting a pin or the next big investment theme? appeared first on The Motley Fool Australia.

More reading

• Here’s what happened to the Ethereum price in September
• Here’s what happened to the Bitcoin price in September
• How these top 3 cryptos performed in the first quarter of FY22
• What’s driving the Bitcoin price surge?
• Why the Ethereum (CRYPTO:ETH) price is trouncing Bitcoin’s gains

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. 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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Are you looking for some top ASX dividend shares to add to your income portfolio?

If you are, you might want to look at the ones listed below. Here’s what you need to know about these highly rated dividend shares:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is Accent. It is a retail group with a collection of popular footwear-focused store brands including HYPEDC, Platypus, and The Athlete’s Foot.

Accent has been growing at a solid rate for a number of years thanks to the popularity of these brands and their expanding store network. This continued in FY 2021, with the company reporting a 19.9% increase in sales to $1.14 billion and a 38.6% jump in net profit after tax to $76.9 million.

Bell Potter was pleased with its result. And while the broker expects lockdowns to weigh on its performance in FY 2022, it remains very positive on the long term. As a result, the broker currently has a buy rating and $2.90 price target on its shares.

As for dividends, Bell Potter has pencilled in fully franked dividends per share of 9.3 cents in FY 2022 and 13.3 cents in FY 2023. Based on the latest Accent share price of $2.30, this represents yields of 4% and 5.8%, respectively.

Charter Hall Social Infrastructure REIT (ASX: CQE)

Another dividend share to look at is the Charter Hall Social Infrastructure REIT. It is a real estate investment trust with a focus on social infrastructure.

Among the properties the company invests in are bus depots, police and justice services facilities, and childcare centres. These are properties with specialist use, limited competition, and low substitution risk.

It was also on form in FY 2021, reporting a 13.5% increase in operating earnings to $58 million.

Pleasingly, the company’s outlook remains very positive. This is thanks to its weighted average lease expiry of 15.2 years and having 73.2% of its properties on fixed rent reviews. Combined with its 100% occupancy rate, this bodes well for its future growth.

Goldman Sachs is a fan of the company and has a conviction buy rating and $3.81 price target its shares.

The broker is forecasting dividends per share of 16.6 cents in FY 2022 and 17.3 cents in FY 2023. Based on the current Charter Hall Social Infrastructure REIT share price of $3.60, this will mean yields of 4.6% and 4.8%, respectively.

The post Analysts name 2 ASX dividend shares to buy 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 recommended Accent Group. 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 back on form and stormed higher. The benchmark index climbed 0.7% to 7,256.7 points.

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

ASX 200 expected to rise again

The Australian share market looks set to end the week on a positive note. According to the latest SPI futures, the ASX 200 is expected to open the day 44 points or 0.6% higher. This follows a strong night of trade on Wall Street, which late on sees the Dow Jones up 1.15%, the S&P 500 1% higher, and the Nasdaq up 1.3%.

EML Payments’ Ireland update

The EML Payments Ltd (ASX: EML) share price will be on watch on Friday after releasing a regulatory update on its PFS Card Services (Ireland) business. EML said: “The nature of these potential directions are more limited than those originally foreshadowed by the CBI [Central Bank of Ireland] in May 2021. However, as presently framed, EML considers that the direction could materially impact the European operations of the Prepaid Financial Services (PFS) business.”

Oil prices rise

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a strong finish to the week after oil prices charged higher. According to Bloomberg, the WTI crude oil price is up 1.8% to US$78.84 a barrel and the Brent crude oil price is up 1.7% to US$82.50 a barrel.

Dividends being paid

It is payday for the shareholders of a number of popular ASX 200 shares. Among the shares paying dividends are Healius Ltd (ASX: HLS), Reliance Worldwide Corporation Ltd (ASX: RWC), WiseTech Global Ltd (ASX: WTC), and Woolworths Group Ltd (ASX: WOW).

Gold price falls

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could end the week in the red after the gold price dropped. According to CNBC, the spot gold price is down 0.3% to US$1,755.50 an ounce. Improving investor sentiment is weighing on demand for the safe haven asset.

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

More reading

• EML Payments (ASX:EML) share price on watch with CBI update
• Here are the top 10 ASX shares today
• Here’s why ASX 200 tech shares are surging today
• Why A2 Milk, Magellan, Santos, & Whitehaven Coal shares are falling
• ASX 200 energy shares pull back as oil prices take a breather

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 shares of and has recommended EML Payments, Reliance Worldwide Corporation Limited, and WiseTech Global. The Motley Fool Australia owns shares of and has recommended EML Payments and WiseTech Global. The Motley Fool Australia has recommended Reliance Worldwide Corporation 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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The EML Payments Ltd (ASX: EML) share price is going to be on watch on Friday after the company announced an update regarding the Central Bank of Ireland (CBI).

EML Payments’ CBI update

The payments business said that its Irish-regulated subsidiary, PFS Card Services (Ireland) Limited (PCSIL), has received more correspondence from the CBI about the regulatory concerns and potential directions regarding the remediation plan and material growth.

EML stated:

The nature of these potential directions are more limited than those originally foreshadowed by the CBI in May 2021. However, as presently framed, EML considers that the direction could materially impact the European operations of the Prepaid Financial Services (PFS) business.

The remediation program is currently underway and there are governance improvements with the PCSIL board. But, the CBI has advised that PCSIL’s proposed material growth policy is higher than what the CBI “would want to see”.

Additionally, the CBI has proposed that certain limits be applied to programs that, if implemented, could have a negative impact on the PCSIL business. EML said that, subject to endorsement by the PCSIL board, it is going to present to the CBI a “significant and detailed” analysis of limits applied across almost 27,000 programs in the next week along with a proposed recalibration of limits for certain programs.

Time will tell how the EML Payments share price reacts to this news.

CBI has invited PCSIL to provide it with submissions regarding the potential directions, which PCSIL intends to do by 28 October 2021.

There is an ongoing dialogue with CBI about the remediation plan, which EML said remains on track.

Does this affect the whole business?

No.

EML confirmed that these issues don’t relate to its Australian or North American operations, the UK subsidiary which is regulated in England, the other Irish regulated subsidiary (EML Money DAC), Sentenial and Nuapay, EML’s French regulated subsidiary.

The company looked to reassure investors by saying it’s subject to regular audits by various parties including central banks, payment schemes, external and internal auditors and other third parties.

EML said it takes regulatory compliance, including anti-money laundering and counter-terrorism financing, risk management and governance very seriously, and is committed to ensuring its global operations meet the highest standards of risk and regulatory compliance.

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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. owns shares of and has recommended EML Payments. The Motley Fool Australia owns shares of 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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There are some potentially impressive ASX shares that might be worth considering in October 2021.

Businesses that are growing quickly may be worthwhile looking at because of their long-term potential, if they are able to deliver on their plans.

Companies with international growth potential have much larger addressable markets, which may give them more profit potential.

Here are two ASX shares to consider:

Redbubble Ltd (ASX: RBL)

Redbubble owns and operates two global leading online marketplaces – Redbubble.com and TeePublic.com. It has a community of artists that have created designs that are printed on everyday products such as apparel, stationery, housewares, bags, wall art and so on.

Morgan Stanley currently rates the Redbubble share price as a buy with a target price of $6.50. That suggests the broker believes the company could see a rise of almost 50% of its share price over the next 12 months. Morgan Stanley is attracted to the Redbubble operating model and believes it could become much more profitable in the coming years.

In FY21, the e-commerce business achieved marketplace revenue of $553 million, an increase of 58%. In the next few years, it’s aiming to grow its gross transaction value (GTV) to $1.5 billion, which would lead to marketplace revenue of $1.25 billion per annum.

In the shorter-term, the ASX share is going to invest heavily to achieve growth. Over the longer-term, the increase in users, order rate, average order value and repeat order rate is expected to help improve the profit margins of the business.

In FY22, the earnings before interest, tax, depreciation and amortisation (EBITDA) margin is expected to be in the mid-single digit range and improve in subsequent years with its top line growth.

The company expects to deliver a trading update on 14 October 2021.

Bapcor Ltd (ASX: BAP)

Bapcor already calls itself the largest auto parts in Australasia, but it has plans to become a larger business. COVID-19 is currently impacting the expansion business, but it has outlined plans to extend its market leadership.

The company operates a number of different businesses including Burson, Autobarn and specialist wholesale (such as electrical and commercial vehicles).

At the end of FY21, it had around 1,100 locations and the 5-year target is to increase that to more than 1,500 locations with a large increase in its retail division and creating a material presence in Asia.

The ASX share sees a sizeable opportunity in Asia. It aims to be the most prominent vehicle parts distributor in the Asia Pacific region, with six locations in Thailand and a 25% stake of the Singapore-listed Tye Soon. The Tye Soon business has 60 locations across Asia, notably in South Korea and Malaysia. Burson Thailand will open its seventh location (and more) once COVID restrictions reduce.

There are four areas that Bapcor is investing in to grow the business – driving expansion of its network (including online), supplementing market-leading brands with Bapcor’s own brand products (with higher margins), realising benefits and efficiencies across Bapcor, and investing in its team members.

In FY21, Bapcor grew its revenue by 20.4% and increased the net profit by 46.5% to $130 million. Management attributed the result to improved operating and financial performance across all business segments.

The post 2 impressive ASX shares that could be buys in October 2021 appeared first on The Motley Fool Australia.

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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 owns shares of and has recommended Bapcor. 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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