The Scentre Group (ASX: SCG) share price has popped today after the Westfield owner gave a market update to investors before the bell this morning.

Scentre shares closed at $2.22 on Friday afternoon, but opened at $2.26 this morning and are sitting at $2.28 at the time of writing – a 3.18% bump.

Scentre cancels interim dividend

Well, let’s get the bad news out of the way first: Scentre has officially cancelled its 2020 interim dividend distribution. Here’s how the company justified its move in the ASX release this morning:

“Given the uncertainty regarding the pandemic, its duration, the economic impact and the timing of operating cash flows for the Group, the Group has determined to not pay an interim distribution for the Half Year period ending 30 June 2020. The Group believes that retaining this capital will further strengthen its financial position and ability to continue to deliver long term returns to its securityholders.”

Although this was a move most investors had braced themselves for, it will no doubt still be a painful pill to swallow. Many investors buy into REITs (real estate investment trusts) like Scentre for dividend/distribution income, so the absence of this income from Scentre shares isn’t negligible.

What else did Scentre tell us?

You may have noticed that the Scentre share price has risen substantially today, so the news out of this REIT can’t be all bad. Scentre did also inform the markets that its capital position was healthy with increased liquidity to $3.1 billion, and it has managed to retain its ‘A’ grade credit rating.

The company also told markets that 57% of its retail tenants, representing 70% of the gross lettable area, remain open, with “more retailers scheduled to reopen over the coming weeks”.

Scentre also noted that “as more retailers have reopened, we have seen an increase in customer visitation in recent weeks and most significantly over this last weekend there was double the level of visitations from 5 weekends ago”.

All of these developments point to Scentre recovering once restrictions are lifted across the coming months, and it might not look like the retail apocalypse for the company that many feared a few months ago.

This is reflected in the current Scentre share price, which although is still a long way away from the ~$4 levels we were seeing early in the year, is still far above the $1.35 low we saw in March.

The next few months will still be crucial for this ASX REIT, however, and we shall have to see how this company pulls itself out of the woods when the coronavirus is, at last, behind us.

More reading

• Are ASX retail shares undervalued today?
• 3 ASX shares to buy as a beginner
• Is there long-term value in ASX REITs?
• Increase your income with $5,000 in ASX shares
• Some ASX shares will never be the same again

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. 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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The Ophir High Conviction Fund (ASX: OPH) released its April report this morning and provided investors with an update on its portfolio and its market view.

Have share markets gone too far?

Ophir notes that share markets have rebounded very strongly from their March lows.

This is despite the impending release of “the worst economic data the world has seen since the Great Depression” over the next few months. This data will include the “sharpest falls in GDP, the highest unemployment and the largest contraction in corporate earnings in many countries.”

However, the fund manager believes things are very different to the 1930s.

It explained: “Unlike the Great Depression though, it is our opinion that this crisis is likely to be much shorter, though there will likely be some lasting impacts on consumer behaviour.”

The fund manager warned that it is difficult to predict how the market will react to the upcoming economic data. However, as it is a long-term focused investor, it isn’t being put off and remains heavily invested.

Furthermore, it notes that this crisis is “as much about ascertaining what long term changes we might see in consumer buying behaviour as it is about avoiding the immediate losers.”

Which leads us on to Ophir’s portfolio update. The Ophir High Conviction Fund’s investment portfolio returned +12.1% during April.

Key drivers of its return were payments company Afterpay Ltd (ASX: APT), artificial intelligence company Appen Ltd (ASX: APX), and gold miner Evolution Mining Ltd (ASX: EVN).

This was offset slightly by the underperformance of shares such as private health insurer NIB Holdings Limited (ASX: NHF) and medical device company ResMed Inc. (ASX: RMD).

Ophir notes: “Both Resmed and NIB Holdings suffered some payback in April for being two of the only 25 stocks in the ASX300 that went up in March. Both have been significant outperformers since the onset of COVID-19.”

Should you be investing in the share market?

I think Ophir is spot on with its assessment. Over the next few months we are likely to see some horrific economic data, but I remain confident the recovery will be far swifter than the Great Depression.

In light of this, I think investors ought to continue investing in the share market. And particularly companies which are continuing their growth unabated during the pandemic such as Afterpay and Appen.

More reading

• 3 ASX 200 pandemic winners and 3 losers
• Buy these 4 ASX shares to survive the pandemic
• These ASX shares booked the biggest gains last week
• These ASX 200 shares are up over 1,000% in just 3 years
• ASX 200 Weekly Wrap: New ASX bull run continues

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. The Motley Fool Australia has recommended NIB Holdings Limited and ResMed Inc. 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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