Of all the ASX exchange-traded funds (ETFs) on the market today, the BetaShares Asia Technology Tigers ETF (ASX: ASIA) certainly hasn’t been a great one to hold over the past 12 months. Since mid-February 2021, ASIA units have lost a nasty 36.3% on today’s closing pricing. Yep, this was an ETF that was worth more than $14 a unit a year ago. Today, it’s at $8.96.

It’s not too hard to see why this ETF has been through the wars of late. Its largest holdings are dominated by Asian tech companies. These including Taiwan Semiconductor Manufacturing Co and Samsung. As well as Tencent Holdings, Alibaba Group Holding Ltd and JD.com Inc.

These kinds of companies have been at the centre of a global selloff of tech-related shares we have seen play out over the past month or two. Growth shares in the tech space have been heavily punished across the world in 2022 so far. That includes in Asia, as well as the United States and here on the ASX.

Additionally, many Chinese companies such as Alibaba have come under additional pressure over concerns of investing in the Chinese market. The Chinese Communist Party has recently initiated several crackdowns on various industries in China that have spooked investors as well. And the United States government has raised concerns about Chinese companies listing on American stock exchanges in the past.

ASIA ETF has a year to forget…

So where to now for ASIA? Have we found the bottom for this ETF?

Well, according to the Shanghai-based Mingshi Investment Management, the opportunities of investing in Chinese companies is not to be ignored, despite the risks.

Here’s some of what Lewis Prescott, Partner and International CEO at Mingshi, had to say:

Sophisticated investors consider geopolitics as a major risk, but they also acknowledge that ignoring China as a source of both alpha and diversification is also a risk… The China onshore equity market provides a unique opportunity for uncorrelated alpha and high liquidity

Mr Prescott also says that China is “under-represented in most investors’ asset allocations” when it comes to international shares. He argues that increasing exposure to Chinese companies can improve investors’ annual returns.

ASIA is of course not the only ETF on the ASX with Chinese exposure. In fact, only 46.7% of ASIA’s portfolio is invested in Chinese shares. Other countries like Taiwan, South Kore and India make up most of the remainder.

However, if Mr Prescott’s predictions turn out to be accurate, it might mean good things for the BetaShares Asia Technology Tigers ETF. 

The post Down 36% in a year, could the Betashares Asia Technology Tigers ETF (ASX:ASIA) be poised to take off? appeared first on The Motley Fool Australia.

More reading

• Here are 3 highly-rated ASX growth shares
• Here are 3 excellent ASX growth shares for investors in February
• Why these 2 ASX ETFs are in major correction territory
• 3 top ETFs for ASX investors to look at this month
• Are these 2 ASX tech shares good buys in February?

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. has recommended JD.com. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF and JD.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/w3n85gl

Today, the S&P/ASX 200 Index (ASX: XJO) succumbed to the selling pressure amid ongoing uncertainty around relations between Russia and Ukraine. At the end of the session, the benchmark index finished 0.51% lower at 7,206.9 points.

While a number of companies reporting their half-year results were well received by investors today, it wasn’t enough to offset the losers of the session. The energy sector was the heaviest of fallers across the market on Tuesday, slumping 2.8% after oil prices pulled back from their seven-year high this afternoon.

On the flip side, tech shares ended up being the best performers of the day. This was despite economists firming their belief that rates will rise sometime this year.

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, Sims Ltd (ASX: SGM) was the biggest gainer today. Shares in the metal and electronics recycling company skyrocketed 13.68% after revealing significant growth across all major metrics in its half-year results. Find out more about Sims here.

The next biggest gaining ASX share today was Brambles Ltd (ASX: BXB). The supply-chain logistics company’s share price jumped 6.16% despite there being no announcements released today. Uncover the latest Brambles details here.

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

ASX-listed company	Share price	Price change
Sims Ltd (ASX: SGM)	$17.04	13.68%
Brambles Ltd (ASX: BXB)	$10.00	6.16%
SEEK Limited (ASX: SEK)	$29.47	6.08%
Zimplats Holdings Ltd (ASX: ZIM)	$25.20	5.48%
Infratil Ltd (ASX: IFT)	$7.47	5.06%
JB Hi-Fi Ltd (ASX: JBH)	$53.70	3.85%
Dexus (ASX: DXS)	$10.43	2.66%
Bendigo and Adelaide Bank Ltd (ASX: BEN)	$9.92	2.59%
Downer EDI Ltd (ASX: DOW)	$5.45	2.44%
Altium Ltd (ASX: ALU)	$34.72	2.21%

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

• Why did ASX 200 energy shares weigh on the index today?
• These 3 ASX 200 shares are topping the volume charts this Tuesday
• Why Dexus, JB Hi-Fi, Seek, and Sims shares are climbing today
• Why is the Vanguard Australian Shares High Yield ETF (ASX:VHY) outperforming in 2022?
• ASX 200 (ASX:XJO) midday update: BHP and SEEK impress, Beach sinks

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. owns and has recommended Altium. The Motley Fool Australia owns and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/zQnuX0P

Tuesday proved to be a bad day for S&P/ASX 200 Index (ASX: XJO) energy shares.

The S&P/ASX 200 Energy Index (ASX: XEJ) tumbled to close 3.1% lower despite oil prices hitting new multi-year highs.

For context, the broader market also suffered today, with the ASX 200 slumping 0.51% and the All Ordinaries Index (ASX: XAO) falling 0.59%.

Let’s take a look at what’s going on went on with ASX 200 energy producers on Tuesday.

ASX energy stocks fall despite oil prices hitting 7-year high

The ASX 200 energy sector had a disappointing day even as oil prices hit their highest point since 2014.

The price of a barrel of Brent crude oil rose to an intraday high of US$96.26 on Tuesday while West Texas Intermediate hit US$95.17 a barrel, according to data from CNBC.

Reuters reported the increases may have been a reaction to rising tensions between Russia and Ukraine, as fears mount Russia could stage an invasion in coming days.

If Russia was to invade, the flow of oil from Ukraine, a major producer, could be disrupted. This could, in turn, send oil prices above US$100 per barrel, according to Rystad Energy senior oil market analyst Nishant Bhushan.

Interestingly, the energy commodity’s price surge wasn’t enough to boost ASX 200 energy shares today.

What dragged on ASX 200 energy shares on Tuesday?

The major weight on the energy index today was the Beach Energy Ltd (ASX: BPT) share price. It fell 10.46% over Tuesday’s session.

As The Motley Fool Australia’s Zach Bristow reported, its tumble was likely a delayed reaction to the release of the energy producer’s half-yearly earnings yesterday.

Bristow reported the company failed to hit market and broker expectations, posting earnings per share (EPS) of just 9.34 cents – notably lower than analyst forecasts of 10.62 cents.  

Meanwhile, the Santos Ltd (ASX: STO) share price fell 4.15% on the eve of its full-year earnings release.

It will, of course, be the first time the company reports after it merged with Oil Search in December.

Paladin Energy Ltd (ASX: PDN) rounded out the 3 worst performing large-cap energy stocks in today’s session. Its share price tumbled 4.14%.

While there’s no clear reason as to why all ASX 200 energy shares slipped lower today, it could represent a market correction after the index surged 3.3% on Monday.

At market close on Tuesday, the ASX 200 energy index is 12.56% higher than it was at the start of 2022. For comparison, the ASX 200 has fallen 3.19% over the same period.

The post Why did ASX 200 energy shares weigh on the index today? appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to sell today
• Why Adore Beauty, Beach, Fortescue, and Praemium shares are falling
• These 3 ASX 200 shares are topping the volume charts this Tuesday
• Not so sunny: why the Beach Energy (ASX:BPT) share price is sinking 10% today
• Why is the Vanguard Australian Shares High Yield ETF (ASX:VHY) outperforming in 2022?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

from The Motley Fool Australia https://ift.tt/tkrNIBf

The Australian Foundation Investment Co. Ltd (ASX: AFI), or AFIC for short, is not the most well-known ASX share. But it is one of the oldest. A Listed Investment Company (LIC), AFIC opened its doors back in 1928, and has been investing in ASX shares on behalf of its investors ever since.

Today, it is the largest LIC on the ASX boards, besting rivals like Argo Investments Limited (ASX: ARG) and WAM Capital Limited (ASX: WAM) in terms of market capitalisation. But the modern world of investing is very different to the world upon which AFIC opened its doors to in the 1920s.

LICs have certainly lost some popularity at the expense of the ever-popular exchange-traded fund (ETF). The increasing desire of passively-minded investors to put their cash in index-tracking and low-cost ETFs instead of the more actively managed LICs like AFIC is a trend that has been growing for years now.

So how does AFIC measure up in the modern world of investing?

Well, let’s get straight into the numbers. So, AFIC tells us that as of 31 January, its total return (share price growth plus dividends and franking) was 12.5% for the preceding 12 months. That compares well with the S&P/ASX 200 Accumulation Index. It has returned 10.9% over the same period (also including dividends and franking).

Over the past five years on average, AFIC’s total return has come in at 10.6% per annum against the index’s 10%. But over the past ten years, AFIC and its benchmark are dead-even at 11.1% per annum on average each.

So that effectively means an investment in AFIC shares has bested investing in an ASX 200 ETF over both the past year and the past five years.

How does AFIC’s performance measure up against the ASX 200 and other LICs?

But how does this compare to Argo and WAM Capital?

Argo tells us that its total return performance, as of 31 December, was 25.5%. We can’t take too much stock in that when comparing to AFIC though. That’s because January was such a negative month for the ASX 200 Index. But over five years, Argo’s total return has averaged 10.5% per annum, just under AFIC’s. In saying that, it doesn’t appear that those returns factor in franking, which could give Argo an extra boost. Over ten years, Argo’s total return averages at 11.5% per annum.

Unfortunately, WAM Capital is not as transparent with its performance data. It only releases the performance of that LIC’s underlying investment portfolio, rather than the total return shareholders have enjoyed. Still, let’s check it out for comparison’s sake. So, as of 31 January, WAM Capital’s underlying portfolio enjoyed a gain of 7.5% over the preceding 12 months, including dividend returns (again, franking doesn’t seem to factor in here). Over the past five years, it has averaged a return of 9% per annum. And over ten years, it’s 13.7% per annum.

Those metrics don’t factor in WAM Capital’s management fee either, which, at 1% per annum, is far higher than AFIC and Argo’s 0.14%. AFIC and Argo’s performance figures account for their fees.

So that’s how AFIC’s performance stacks up against its rival ASX LICs, as well as the ASX 200 Index. It appears AFIC comes out on top for the five year period, but Argo and WAM Capital best it over ten years, if only slightly.

At the current AFIC share price, this ASX LIC has a market capitalisation of $9.94 billion, with a trailing dividend yield of 2.96%. 

The post AFIC (ASX:AFI) is the biggest LIC on the market. But how does its performance stack up? appeared first on The Motley Fool Australia.

More reading

• Why is the AFIC (ASX:AFI) share price sliding lower today?
• These ASX 200 shares can beat inflation: expert
• Rocketing returns trump souring outlook: Argo Investments (ASX:ARG) share price lifts on results
• ‘Solid performance’: WAM Capital (ASX:WAM) share price spikes after portfolio update
• Will a growing dividend help the AFIC (ASX:AFI) share price?

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. 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.

from The Motley Fool Australia https://ift.tt/sNRz9Kg

Yesterday we looked at three ASX shares brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with brokers right now. Three that have just been given sell ratings are listed below. Here’s why these brokers are bearish on these ASX shares:

Beach Energy Ltd (ASX: BPT)

According to a note out of Macquarie, its analysts have downgraded this energy producer’s shares to an underperform rating with an improved price target of $1.50. This follows the release of a half year result that fell short of the broker’s expectations. And while it has upgraded its earnings forecasts and price target to reflect production growth, it believes investors would be better off with other cheaper options in the sector. The Beach share price has fallen heavily today and is now trading at $1.46.

Insurance Australia Group Ltd (ASX: IAG)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating but lifted their price target on this insurance giant’s shares to $3.90. While IAG surprised to the upside with its half year results, this isn’t enough for a more positive rating. Morgan Stanley believes there are risks that are not being accurately priced in by the market. This is particularly the case with claims inflation. The IAG share price is fetching $4.74 today.

Magellan Financial Group Ltd (ASX: MFG)

Analysts at UBS have retained their sell rating and $7.00 price target on this fund manager’s shares. The broker continues to believe that the risks are to the downside for Magellan. This is due to fund outflows, staff retention concerns, and its belief that Magellan may need to cut its fees to reduce retail fund outflows. This could put pressure on the company’s margins. The Magellan share price is trading at $18.12 currently.

The post Leading brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• Why Adore Beauty, Beach, Fortescue, and Praemium shares are falling
• These 3 ASX 200 shares are topping the volume charts this Tuesday
• Not so sunny: why the Beach Energy (ASX:BPT) share price is sinking 10% today
• We’ll pass thanks: Top broker downgrades IAG (ASX:IAG) share price to hold
• ASX 200 (ASX:XJO) midday update: BHP and SEEK impress, Beach sinks

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 owns and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/cRTYNwu

Leading fund manager Wilson Asset Management (WAM) has revealed two ASX shares that it rates as buys within the WAM Research Limited (ASX: WAX) portfolio.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

One of the LICs is called WAM Research, which looks at smaller businesses on the ASX.

WAM describes WAM Research as a LIC that invests in the most compelling undervalued growth opportunities in the Australian market.

The WAM Research portfolio has delivered gross returns (that’s before fees, expenses, and taxes) of 15.4% per annum since the strategy changed in July 2010, which is superior to the All Ordinaries Total Accumulation Index (ASX: XAOA) return of 8.9% per annum.

These are the two ASX shares that WAM outlined in its most recent monthly update:

Credit Corp Group Limited (ASX: CCP)

Credit Corp was described as a business that provides debt purchase and collection, and consumer lending services in Australia, New Zealand and the US.

The Credit Corp share price outperformed during January 2022 in the lead-up to the FY22 interim result, which was released at the start of February.

WAM said that investor expectations were growing ahead of a positive result. That result delivered, according to the fund manager. There was an 8% increase in the underlying net profit after tax (NPAT) in the half-year report thanks to strong collections activity.

The period included record investment driven by the US purchased debt ledger (PDL) acquisitions alongside the acquisition of Radio Rentals in Australia.

Credit Corp’s consumer lending demand accelerated to record levels over the three months to 31 December 2021. Key markets emerged from COVID lockdowns whilst pilot projects continued to demonstrate “promising results”.

WAM liked the confidence that the ASX share’s management showed by increasing the FY22 guidance, with PDL investment increasing to a range of between $300 million to $320 million and net profit between $92 million to $97 million.

The fund manager believes there is still upside to the given guidance and remains positive on the medium-term outlook as unsecured credit balances are “set to accelerate” as consumer stimulus fades and the impacts of COVID eases.

The above-mentioned impacts are expected to underpin organic growth, while a strong balance sheet positions the company to capitalise on further acquisitions that would add to earnings with a range of opportunities currently in the market.

BWX Ltd (ASX: BWX)

WAM describes BWX as an Australian-based company that is engaged in developing, manufacturing and marketing beauty and personal care products.

The company’s expansion into the US and UK is gaining traction. When coupled with new products and a larger distribution network, this is driving growth of the market share.

It was announced in January 2022 that CEO Dave Fenlon had resigned. Mr Fenlon is going to change to be a non-executive director position on the BWX board.

WAM wasn’t too concerned because the appointment of his successor is Rory Gration. Mr Gration was the chief operating officer. This demonstrated the continuity of the ASX share’s management team.

BWX recently expanded its portfolio with the acquisition of a 50.1% majority stake of Go-To Skincare for $89 million. In FY21, this business generated $36.8 million of revenue and $11.6 million of earnings before interest, tax, depreciation and amortisation (EBITDA).

The post 2 ASX shares that this top fund manager rates as a buy appeared first on The Motley Fool Australia.

More reading

• 2 highly-recommended ASX shares by experts
• 2 ASX dividend shares with grossed-up yields over 8% right now
• Why Amcor, Ansell, Block, and Credit Corp shares are sinking today
• ASX 200 (ASX:XJO) midday update: Amcor slides, BHP and Fortescue storm higher
• Why Boral, Carsales, Credit Corp, and PointsBet shares are racing higher

from The Motley Fool Australia https://ift.tt/xzKjqYT

The Woolworths Group Ltd (ASX: WOW) share price closed higher today at $34.36, up 1.33% on yesterday’s close.

Shares in the retail conglomerate have levelled off in 2022 after the company’s share price plunge at the end of last year. Investors have seen their holdings come off 52-week highs of around $52 dollars to now trade near 52-week lows.

But not everyone is downbeat on Woolworths with one broker retaining its overweight stance on the retail giant. Let’s take a look.

Is Woolworths a buy in 2022?

According to analysts at JP Morgan, Woolworths looks attractively priced and offers long-term upside potential. The broker says that makes it a buy right now.

After some readjustments, analysts now value Woolworths at $39.60 per share, suggesting an upside potential of more than 15%.

The broker reckons that Food LFL [like-for-like] sales growth is supported by “local, online and ongoing execution capabilities, as Woolworths continues to execute across its strategy of convenience, fresh and range”.

JP Morgan analysts also like Woolworths’ operating leverage and that falling COVID-19 costs, and not lower labour costs, are supporting lifting operating margins.

But the broker also likes each of the other segments in Woolworths’ portfolio, especially given the changing landscape of the sector.

“[The] Big W turnaround has been a positive with further opportunity due to DC [distribution centre] and store network optimisation,” the broker said in a recent note.

However, analysts say visible challenges remain, particularly from ongoing cost pressures due to supply chain disruption, COVID-19 costs in early 2022, and higher wages from FY23 onwards.

Nevertheless, there are plenty of bullish signals that offset these headwinds in the broker’s view.

“The Everyday Needs ecosystem leverages and extends the competitive advantages of the Food business, while adding to WOW earnings growth,” analysts said.

The team also views Woolworths’ “market-leading online platform favourably and see[s] sustained levels of high online penetration post-COVID”.

With this in mind, analysts at JP Morgan forecast revenue of $60.5 billion in FY22, leading to a free cash flow conversion of $3.1 billion – both down on FY21.

The broker also sees return on equity (ROE), alongside other profitability measures, declining substantially over the coming periods. However, analysts say this is likely to return Woolworths’ figures in line with long-term averages after the company’s period of hyper-growth.

“After a period of normalisation, we expect online penetration to continue to grow to approximately 14% over the next five years,” the broker said.

Woolworths share price snapshot

In the last 12 months, the Woolworths share price has fallen more than 6% and is down more than 10% since 2022 trading began on January 4.

The company has a market capitalisation of around $41.4 billion dollars at its current share price.

The post Is it a buy in 2022? Why this top broker tips 15% upside in Woolworths (ASX:WOW) shares appeared first on The Motley Fool Australia.

More reading

• Why UBS is warning of more pain for the Coles (ASX:COL) share price
• Own Woolworths (ASX:WOW) shares? Now you also own part of this niche start-up
• Why is the Woolworths (ASX:WOW) share price trailing Coles by 5% over the past month?
• Why does the Woolworths (ASX:WOW) share price have the blues today?
• Price check: Woolworths (ASX:WOW) shares have already dropped 8% in 2022. Can they recover?

Motley Fool contributor Zach Bristow 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.

from The Motley Fool Australia https://ift.tt/Eduz1Vm

In late trade, the S&P/ASX 200 Index (ASX: XJO) is heading for a disappointing decline. At the time of writing, the benchmark index is down 0.4% to 7,212.5 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Adore Beauty Group Ltd (ASX: ABY)

The Adore Beauty share price is down 7% to $2.51. This is quite a turnaround for the online beauty retailer’s shares, which were up 7% in morning trade. Although Adore Beauty delivered strong revenue growth during the first half, investors may have concerns over its slender margins.

Beach Energy Ltd (ASX: BPT)

The Beach share price is down 10% to $1.46. Investors have been selling this energy producer’s shares following a pullback in oil prices and a broker note out of Macquarie. In respect to the latter, this morning the broker downgraded Beach’s shares to an underperform rating with a $1.50 price target.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price has fallen 5% to $21.64. This may have been driven by weakness in the iron ore price overnight. This appears to have been caused by China seeking to cool the rallying price of the steel making ingredient. One action that was taken was increasing transaction fees for iron ore futures on China’s Dalian Commodity Exchange.

Praemium Ltd (ASX: PPS)

The Praemium share price is falling again and is down 6% to 99.2 cents today. Investors have been selling this investment platform provider’s shares after its half year results on Monday disappointed. In addition, while Ord Minnett remains positive on the company, it has cut its price target on its shares down by 12% to $1.50.

The post Why Adore Beauty, Beach, Fortescue, and Praemium shares are falling appeared first on The Motley Fool Australia.

More reading

• Hunger Games? Here’s why more Fortescue (ASX:FMG) execs are calling time out on the miner
• These 3 ASX 200 shares are topping the volume charts this Tuesday
• Not so sunny: why the Beach Energy (ASX:BPT) share price is sinking 10% today
• ASX 200 (ASX:XJO) midday update: BHP and SEEK impress, Beach sinks
• You beauty! Adore Beauty (ASX:ABY) share price up 7% after record half year result

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 Praemium Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited and Praemium Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/wetNFl5

The Qantas Airways Limited (ASX: QAN) share price is in the red today amid news the airline will continue to operate its iconic ‘kangaroo route’ via Darwin rather than Perth.

The direct service between Australia and London will fly from Darwin until at least mid-June as Western Australia’s border uncertainty continues.

At the time of writing, the Qantas share price is $5.23, 1.51% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.28%.

Qantas delays Perth to London flight

The Qantas share price is slipping amid news the airline has opted against restarting its direct Perth to London route.

The landmark flight — one of the longest in the world — was meant to revert to taking off from Australia’s westernmost capital in April.

However, the airline will instead continue to operate the flight from Darwin until at least June, as it has been doing since international travel recommenced last November.

The airline broke news of the delayed re-start hours before Western Australia premier Mark McGowan stated he will be making an announcement regarding the state’s borders later this month, according to the ABC.

It follows the premier’s earlier decision to delay the state’s reopening – originally scheduled for 5 February – indefinitely earlier this month.

As readers might have heard, Qantas boss Alan Joyce reportedly recently compared Western Australia’s border policy to that of North Korea.

Qantas is also choosing to stop over in the Top End to “streamline transit arrangement” for travellers from Sydney, rather than using traditional stopover destination, Singapore.

Joyce today said:

This extension through to at least mid-June means the Top End has several months to properly leverage the opening up of Australia’s borders to all tourists. It’s a great opportunity to encourage thousands of visitors to stop off in Darwin to see what the NT has to offer.

Qantas to build jet base in Darwin

In more Top End tourism news, Qantas has announced it will be building a new jet base in the territory’s capital.

The base will service at least 4 E190 jets servicing QantasLink routes and a new commercial route between Darwin and Dili, made possible by Qantas’ deal with Alliance Aviation Services Ltd (ASX: AQZ).

The planes will also see Qantas able to open routes that would be unserviceable with larger aircraft. These include flights between Darwin and Canberra, Cairns, and Townsville.

On the new jet base, Joyce commented:

Basing these aircraft in Darwin means securing more jobs and a stronger local aviation industry.

As we prepare to welcome back international visitors, the E190s will make it easier to fly directly between Darwin and other popular tourist destinations including Alice Springs for central Australia, encouraging travellers to see more of Australia.

In other airline news, new budget carrier Bonza today revealed it will fly 25 routes to 16 destinations around Australia. Bonza is due to begin flying in October.

Qantas share price snapshot

The Qantas share price has often been turbulent throughout the pandemic. However, it’s outperforming the ASX 200 in 2022.

The airline’s stock has gained 1.75% year to date. Meanwhile, the index has slipped 4.8%.

Qantas shares are also currently trading for 14% higher than they were this time last year. For comparison, the ASX 200 is 5.2% higher than it was 12 months ago.

The post Border drama: Qantas (ASX:QAN) faces continued challenges on ‘kangaroo route’ appeared first on The Motley Fool Australia.

More reading

• Qantas (ASX:QAN) share price slips amid Bonza plans to launch ‘something very different to the market’
• ‘Deeply unfair’: Here’s why some Qantas (ASX:QAN) customers are seeing red
• ‘Squawking’ bird? War of words erupts between Regional Express (ASX:REX) and Qantas (ASX:QAN)
• Qantas v the WA government: here’s the latest
• ‘Open for business’: Qantas (ASX:QAN) share price lifts amid CEO’s renewed optimism

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alliance Aviation Services Ltd. The Motley Fool Australia owns and has recommended Alliance Aviation Services Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/x2hKETu

Commonwealth Bank of Australia (ASX: CBA) has a different take on inflation than the Reserve Bank of Australia (RBA). Saying inflation is running hot, the bank foresees the RBA lifting rates sooner than the central bank has forecast.

CBA shares – alongside the other banks – are among those that could stand to benefit from higher interest rates.

Though it’s a two-edged sword.

On one side, higher interest rates can improve banks’ lending margins.

On the other side, if rates rise quickly, it could impact the banks’ lucrative mortgage lending as new home buyers take a pause. Not to mention the potential of increased bad debts.

Depending on which force is stronger, rising rates could either help or hinder CBA shares.

With rate rises in the cards, whether sooner or later, investors should have some greater insight into this balance over the coming year.

Brace for a June rate rise

Previously, CommBank had forecast that the RBA would move to raise the cash rate from the current record low of 0.10% in August.

Now CBA has moved that up to a likely June rate increase.

As the Australian Financial Review reports, CBA’s economics team estimates trimmed mean inflation to come in at 3.5% by mid-year. That’s above the RBA’s own forecast of a trimmed mean CPI of 3.25%.

According to CBA’s head of Australian economics, Gareth Aird:

We are very comfortable with our expectation that the Q1 2022 underlying inflation data will be a lot stronger than the RBA’s forecast. If the Q1 2022 CPI prints in line with our forecast, the RBA will not need an additional CPI to conclude that inflation is ‘sustainably within the target range’. The RBA will simply need to be satisfied that wages growth is moving towards the desired levels.

On the wages front, CommBank expects that first quarter results will show Aussie wages growing by 3% on an annualised basis.

If the RBA moves the cash rate higher in accordance to CBA’s forecast, Australians will see a 0.15% increase in the cash rate in June, followed by 3 more increases of 0.25% this year yet, bringing the official rate to 1% by the end of 2022.

How have CBA shares been performing?

CBA shares, flat in late afternoon trading today, have outperformed the S&P/ASX 200 Index (ASX: XJO) in 2022, in that the bank’s losses have been less.

Since the opening bell on 4 January, CBA shares are down 2.3% compared to a loss of 4.9% posted by the ASX 200.

The post Own CBA (ASX:CBA) shares? Here’s the bank’s hawkish outlook for RBA rate rises appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 bank shares getting so much love today?
• These are some of the top performing ASX 200 value shares of the past year
• Strap yourself in: Why ASX 200 shares could continue their wild ride in 2022
• Own CBA (ASX:CBA) shares? Here’s the bank’s next big tech move
• 3 of the best results on the ASX 200 last week

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.

from The Motley Fool Australia https://ift.tt/DN8pdXG