If you don’t have the funds to build a truly diverse portfolio, then exchange traded funds (ETFs) could be worth considering. This is because ETFs give investors access to a large number of different shares through just a single investment.

With that in mind, I have picked out two ETFs that trade on the ASX that could be good options. They are as follows:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF to look at is the BetaShares Asia Technology Tigers ETF. This popular ETF gives investors exposure to a number of the biggest tech shares in the Asia market.

This is certainly a great space to be in. As technological adoption in Asia is surpassing the West, it is expected to underpin strong growth over the next decade. This could make recent weakness in the BetaShares Asia Technology Tigers ETF share price a potential opportunity for investors.

The BetaShares Asia Technology Tigers ETF is currently invested in a total of 50 companies. This includes Alibaba, Baidu, JD.com, NetEase, and Tencent.

The latter is a multinational technology conglomerate and one of the largest companies in the world. Tencent’s communication and social platforms, Weixin (WeChat) and QQ, connect over a billion users with each other and with digital content and services.

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

Another ETF to consider is the VanEck Vectors Video Gaming and eSports ETF.

The VanEck Vectors Video Gaming and eSports ETF provides investors with access to a portfolio of the largest companies involved in video game development, hardware, and esports. Among the companies you’ll own a slice of are Nvidia, Take-Two, and Electronic Arts.

VanEck notes that these companies are in a position to benefit from the increasing popularity of video games and eSports. Furthermore, the fund manager points out that the fund gives investors the opportunity to diversify their portfolio by providing tech options outside the popular FAANG stocks.

The post 2 excellent ETFs for ASX investors in August appeared first on The Motley Fool Australia.

More reading

• Here’s why the BetaShares Asia ETF (ASX:ASIA) share price is down 10% over a month
• 2 ASX tech shares that might be buys in August 2021
• 2 top ETFs that might be buys in August 2021
• What’s gone wrong with China shares like Tencent lately?
• 2 excellent international ETFs for ASX 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 and BetaShares Asia Technology Tigers ETF. 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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ASX dividend shares could be good to think about in August 2021.

The world isn’t in a global lockdown like last year, but dividends are not guaranteed, particularly in this environment.

Some businesses managed to increase their payments for shareholders even during the COVID-affected 2020 year.

Here are two to think about:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is the ASX dividend share with the longest dividend growth record. It has actually increased its dividend each year since 2000.

The company has a portfolio of both listed and unlisted assets. It operates as an investment conglomerate.

Some of its listed holdings have been investments for many years like TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC) and Brickworks Limited (ASX: BKW).

It has plenty of other investments, though they aren’t as large positions in the portfolio: Bki Investment Co Ltd (ASX: BKI), Pengana Capital Group Ltd (ASX: PCG), Pengana International Equities Ltd (ASX: PIA), Tuas Ltd (ASX: TUA), Clover Corporation Limited (ASX: CLV), Bailador Technology Investments Ltd (ASX: BTI), Commonwealth Bank of Australia (ASX: CBA) and Woolworths Group Ltd (ASX: WOW).

Non-ASX holdings include resources, financial services, healthcare, electrical products, agriculture and swimming schools.

Soul Patts receives investment income from its portfolio, pays for its expenses and then releases a majority of the cashflow to shareholders as a dividend each year. Some profit is retained for future investments.

At the current Soul Patts share price, the ASX dividend share has a grossed-up yield of 2.7%.

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) with a focus on finding quality tenants with long-term leases.

Its portfolio has a weighted average lease expiry (WALE) of 13.2 years, which is one of the longest in the sector.

The ASX dividend share is currently rated as a buy by the broker Morgan Stanley with a price target of $5.35.

Charter Hall Long WALE REIT was one of the few property businesses to increase the distribution in 2020 thanks to its portfolio of large and stable tenants that currently includes several government entities, Telstra Corporation Ltd (ASX: TLS), BP, Endeavour Group Ltd (ASX: EDV), Inghams Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL), David Jones and Metcash Limited (ASX: MTS).

Its properties are spread across a variety of different sectors including offices, telecommunications, grocery and distribution, fuel and convenience, pubs and bottle shops, food manufacturing, waste and recycling, and ‘other’ (such as Bunnings).

The business has been steadily growing its operating earnings per share (EPS). It pays out 100% of its operating EPS as a distribution. It’s expecting EPS growth of at least 4.5% in FY22. 

Morgan Stanley is expecting the FY22 distribution will be 31.2 cents per unit. That translates to a yield of 6.3%.

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

More reading

• The least productive argument in investing…
• Why has the Brickworks share price rocketed up 50% in the last year?
• 2 small ASX shares with big dividend yields
• Here are 2 top ASX dividend shares that could provide steady passive income
• 2 top ASX dividend shares with BIG yields

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bailador Technology Investments Limited and Clover Corporation Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, COLESGROUP DEF SET, Telstra Corporation Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Bailador Technology Investments 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 Brickworks Limited (ASX: BKW) share price is going to be on watch today after announcing an acquisition called Southfield Corporation.

What is Southfield Corporation?

Southfield Corporation is a business in the US that has assets including the Illinois Brick Company (IBC).

IBC was started in 1981. Through a combination of organic growth and acquisitions, it is now the largest independently owned and operated brick distributor in the US with 17 showrooms and distribution yards, all located in Illinois and Indiana.

Brickworks says that IBC trades under a range of well-known and long established brands. Almost half of its revenue comes from the sale of around 70 million bricks per annum.

IBC also sells a variety of building materials and supplies such as stone, masonry, construction materials and tools.

How much is Brickworks spending to buy Southfield Corporation?

Brickworks is going to spend $70 million, or US$51.1 million, on buying Southfield Corporation.

The transaction is going to be funded by existing debt facilities and is expected to deliver 2% earnings per share (EPS) accretion.

Why is Brickworks buying this business?

Brickworks noted that IBC has delivered consistent earnings for several years, with significant growth opportunities and cost synergies available to Brickworks.

The company said that the acquisition supports Brickworks’ growth strategy in North America. It said that it builds scale and fills a gap within Glen Gery’s existing direct distribution network. Brickworks also pointed out that sales volume through the IBC network underpins significant sales volume at its Midwest plans, which Brickworks says have ample capacity to accommodate additional sales growth.

Lindsay Partridge, the managing director of Brickworks, said:

We have enjoyed a strong relationship with IBC since our entrance into the US market almost three years ago. We know the business well and are pleased to welcome its 225 staff to the Brickworks Group. We look forward to building on the strong position that IBC has established as the number one brick distributor in the region.

Illinois and Indiana are two major states within our key target market in the Midwest, and both have a strong heritage of brick construction. We currently lack a direct distribution presence in these states and as such this acquisition is a logical strategic fit.

Outlook

Management said that the outlook for the region is strong, with building activity expected to increase over the next five years, across both residential and non-residential segments.

Infrastructure spending is expected to boost construction activity.

Brickworks points out that the US vaccine program is now well advanced and the economy is re-opening. It’s seeing a strong recovery in demand.

The company continues to see the North American brick industry as a “highly attractive” long-term growth opportunity.

The market will have the chance to decide today how material this is for the Brickworks share price.

The post Brickworks (ASX:BKW) share price on watch with US acquisition appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 shares that keep growing their dividends
• Why has the Brickworks share price rocketed up 50% in the last year?
• 2 ASX 200 shares that could be buys for dividends
• ASX construction shares fall on worksite shutdowns in NSW
• Why is the Soul Patts (ASX:SOL) share price down this Monday?

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 Brickworks. 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 Monday the S&P/ASX 200 Index (ASX: XJO) started the week on a very positive note. The benchmark index finished the day 1.35% higher at 7,491.4 points.

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

ASX 200 expected to fall

It looks set to be a tough day of trade for the Australian share market on Tuesday. According to the latest SPI futures, the ASX 200 is expected to open the day 24 points or 0.3% lower this morning. This follows a subdued start to the week on Wall Street, which saw the Dow Jones fall 0.3%, the S&P 500 drop 0.2%, and the Nasdaq edge slightly higher. The RBA meeting this afternoon could also have an impact on the market late on.

Afterpay share price on watch

The Afterpay Ltd (ASX: APT) share price will be on watch on Tuesday after Wall Street investors responded positively to Square’s takeover plans. Given that the US payments giant has offered 0.375 Square shares per Afterpay share, a rising Square share price is good news for Afterpay shareholders. The Square share price closed Monday at US$272.38. This means its offer price now equates to A$138.78 per share. This compares to the original implied offer price of A$126.21 per Afterpay share.

Oil prices sink

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could come under pressure today after oil prices sank notably lower. According to Bloomberg, the WTI crude oil price is down 3.4% to US$71.42 a barrel and the Brent crude oil price has fallen 3.1% to US$73.07 a barrel. Concerns over the Chinese economy weighed on prices.

Gold price largely flat

It could be a subdued day for gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) after the gold price traded largely flat. According to CNBC, the spot gold price is down slightly to US$1,816.3 an ounce.

Credit Corp results

The Credit Corp Group Limited (ASX: CCP) share price will be on watch today when it releases its full year results. According to a note out of Morgans, its analysts expect the debt collector’s FY 2021 profit to be at the top end of the guidance range of $85 million to $90 million. The broker has an add rating and $33.45 price target on its shares.

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

More reading

• Square takeover sees surge in the Afterpay share price
• Our faith in Afterpay (ASX:APT) has now paid off: fund manager
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• How China tensions could be a boon for ASX gold shares
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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 AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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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Motley Fool Chief Investment Officer Scott Phillips and Director of Research Kevin Gandiya are joined by analysts Chris Copley, Trevor Muchedzi and Ryan Newman to discuss the announced takeover of Afterpay Ltd (ASX: APT) by Square Inc (NYSE: SQ)… whether the deal is any good, what it means for Afterpay shareholders, and what comes next…

The post Square takeover sees surge in the Afterpay share price appeared first on The Motley Fool Australia.

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• Surging Afterpay (ASX:APT) share price reinvigorates BNPL sector
• ASX 200 midday update: Afterpay to be acquired by Square, Oil Search to merge with Santos

Motley Fool Chief Investment Officer Scott Phillips 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 AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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’re looking for long term options, then the tech sector could be a good place for investors to look. This is because the sector is home to a number of companies that have the potential to grow strongly over the next decade.

Two ASX tech shares that are highly rated are named below. Here’s why analysts rate them as buys:

Adore Beauty Group Limited (ASX: ABY)

The first ASX tech share to look at is Adore Beauty. Australia’s leading online beauty retailer has been growing strongly in recent years thanks to the structural shift online which accelerated during the pandemic. This is expected to underpin a 43% to 47% increase in full year revenue in FY 2021.

The good news is that with online penetration rates for beauty products still much lower than other categories and in comparison to other Western markets, Adore Beauty appears very well-positioned to continue its growth over the next decade. Particularly given its leadership position in the growing market.

UBS is a fan of Adore Beauty. Its analysts currently have a buy rating and $5.60 price target on the company’s shares. UBS believes the company will benefit from structural tailwinds in the coming years.

NEXTDC Ltd (ASX: NXT)

Another ASX tech share to look at is NEXTDC. It also appears well-placed for growth over the long term. This is thanks to the cloud computing boom and NEXTDC’s position as one of the region’s leading data centre-as-a-service providers.

At present, the company has 11 world class centres in key locations across Australia that are experiencing insatiable demand for capacity. In light of this, it has just announced plans to build a fourth centre in Sydney.

Furthermore, it has plans to expand into the Asian market. If NEXTDC can replicate its Australian success internationally, then it could provide it with a very long runway for growth over the 2020s and beyond.

UBS is also positive on NEXTDC. Last week the broker put a buy rating and $15.40 price target on its shares.

The post 2 ASX tech shares rated as buys appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns NextDC shares. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. 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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Afterpay Ltd (ASX: APT) has been one of the most polarising shares among professional and amateur investors alike.

But now that US fintech giant Square Inc (NYSE: SQ) is acquiring the Australian buy now, pay later business, one fund manager is revelling in his ‘I told you so’ glory.

Taking up about 11.5% of the portfolio, Afterpay is the largest holding in the Hyperion Australian Growth Companies Fund.

“Our thesis, that Afterpay is a misunderstood undervalued structural growth stock, was validated today with the proposed transaction with Square,” said Hyperion Asset Management deputy investment officer Jason Orthman.

“We estimate that 65% to 70% of those under the age of 30 across Australia, UK and the US do not have a credit card.”

This addressable market, in addition to more than 50 million estimated people that don’t possess a credit rating in the US, is just waiting for Afterpay to conquer, he added.

The Square acquisition will provide Afterpay shareholders with $39 billion of the new parent’s stocks. The deal is scheduled to finalise in about 6 months’ time.

Younger folks have no interest in old school products

Younger people, especially generation Z, prefer not to participate in “the traditional financial system”, according to Orthman.

“High interest rates and revolving debt traps do not appeal to this generation as a result of having observed their parents suffer during the GFC,” he said.

“Apps such as what Square provides and BNPL that Afterpay leads in, have become essential in allowing them to consume and transact outside the traditional finance system.”

Orthman still has much faith in Afterpay, so is content with the stock deal.

“We would have been disappointed with a cash offer as we want to share in long-term upside,” he said.

“While the premium on offer does not excite Hyperion, the structure of the deal to receive Square stock listed on the ASX as a CDI is compelling.”

Square is also a nice stock to own

Orthman has great conviction in Square shares too, as revealed to The Motley Fool back in April.

It was Hyperion Gbl Growth Companies Fund (ASX: HYGG)’s second-highest holding at the time.

“We believe Square is also a misunderstood stock that Hyperion understands well and is what Afterpay was aspiring to evolve into over the next 5 years,” he said Monday.

Orthman likes how Afterpay is going from essentially a single-product company to a parent with a large catalogue of services.

“Square offers consumer products across P2P, banking, stocks, bitcoin, and taxes,” he said.

“Square’s product set is broader and significantly more comprehensive when compared with Afterpay’s. The Cash App was launched in 2013.”

According to Hyperion, Afterpay has 16 million customers while Square has roughly 40 million monthly active users for Cash App and more than 70 million annually.

“In our view, this transaction is an upgrade in liquidity, valuation and quality,” said Orthman.

“We believe this is a huge win for Hyperion investors and again validates the market inefficiencies Hyperion continues to exploit as business analysts and long-term holders.”

The post Our faith in Afterpay (ASX:APT) has now paid off: fund manager appeared first on The Motley Fool Australia.

More reading

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• Why a2 Milk, Afterpay, Dicker Data, & Oil Search shares are charging higher
• Surging Afterpay (ASX:APT) share price reinvigorates BNPL sector
• ASX 200 midday update: Afterpay to be acquired by Square, Oil Search to merge with Santos
• What is the outlook for the Afterpay (ASX:APT) share price?

Tony Yoo owns shares in both Afterpay and Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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 a large number of growth shares to choose from on the Australian share market. So many, it can be hard to decide which ones to buy ahead of others.

To help narrow things down, I have picked out two ASX 200 growth shares that have been rated as buys. They are as follows”

Altium Limited (ASX: ALU)

The first ASX 200 growth share to look at is Altium. It is the electronic design-focused software provider behind the Altium Designer and Altium 365 platforms, the Octopart electronic parts search engine business, and the NEXUS design collaboration platform.

These businesses appear well-placed for growth over the next decade. This is due to the quality of the platforms and the growing internet of things and artificial intelligence markets. These rapidly growing markets are supporting an explosion in electronic devices globally. A testament to this is that it recently received and rejected a takeover proposal by US software giant Autodesk.

Credit Suisse is a fan of Altium. It currently has an outperform rating and $42.00 price target on the company’s shares. This compares to the latest Altium share price of $34.10.

Xero Limited (ASX: XRO)

Another ASX 200 growth share to consider buying is Xero. It is a leading cloud-based business and accounting software provider with a focus on small to medium sized businesses.

Xero platform’s has evolved over the last few years from a basic accounting solution into a full service small business solution. This has gone down well with small to medium sized businesses globally, leading to significant growth in subscriber numbers.

This continued in FY 2021, with Xero reporting strong subscriber growth, which underpinned an 18% increase in revenue to NZ$848.8 million and a 39% jump in EBITDA to NZ$191.2 million.

Pleasingly, Xero still has an enormous runway for growth. This is being supported by the ongoing shift to cloud solutions, its international expansion, and its burgeoning app ecosystem. The latter has been bolstered by a number of bolt on acquisitions such as Planday, Tickstar, and Waddle.

Goldman Sachs is very positive on its future. In light of this, it recently reaffirmed its buy rating and lifted its price target to $165.00. This compares to the latest Xero share price of $142.22.

The post 2 highly rated ASX 200 growth shares analysts love appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
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• How China’s war on tech companies can hit ASX shares where it hurts
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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 Altium and Xero. The Motley Fool Australia owns shares of and has recommended Altium and Xero. 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 S&P/ASX 200 Index (ASX: XJO) went up by 1.3% today to 7,491 points today.

Here are some of the highlights from the ASX:

Afterpay Ltd (ASX: APT)

It was announced today that Square wants to buy Afterpay. It’s valuing Afterpay at $39 billion.

Square expects to pay Afterpay shareholders in new Square stock. Under the terms of the deal, Afterpay shareholders will receive a fixed exchange ratio of 0.375 Square shares for each Afterpay share they own.

Based on Square’s last closing price of US$247.26 on 30 July 2021, this represents an implied transaction price of $126.21 per Afterpay share, being a premium of 30.6% to the last Afterpay share price.

The ASX 200 buy now, pay later business also released a trading update for FY21.

Total underlying sales increased 90% to $21.1 billion. Looking at the individual regional breakdown, there were $9.8 billion of North American underlying sales (up 148%), $9.4 billion of ANZ underlying sales (up 44%) and $1.8 billion of Clearpay (UK and EU) underlying sales (up 227%).

Afterpay’s overall revenue increased 78% to $925 million and merchant revenue went up 90% to $822 million. It also revealed that gross profit went up 75% to $675 million.

Active merchants rose 77% to 98,200. Total active customers increased by 63% to 16.2 million, but whilst North American active customers rose 88% to 10.5 million. The ANZ active customers only increased by 8% to 3.6 million.

The Zip Co Ltd (ASX: Z1P) share price also rose by around 9% today. It was the second highest rise in the ASX 200.

Santos Ltd (ASX: STO) and Oil Search Ltd (ASX: OSH)

The share prices of Santos and Oil Search went up 0.6% and 4.7% respectively.

These two large businesses have reached an agreement on the merger ratio under the proposed deal.

Under the revised deal, Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share they own.

After the merger, Oil Search shareholders will own approximately 38.5% of the combined entity and Santos will own the other 61.5%.

This revised proposal implies a transaction price of $4.29 for each Oil Search share, based on the closing prices on 19 July 2021. This represents a 16.8% premium to the Oil Search closing price on 19 July.

The two ASX 200 oil shares are expecting compelling value benefits to both sets of shareholders.

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share went up around 2.5% today after providing a trading update.

It said that in the fourth quarter of FY21, its revenue increased 8% quarter on quarter. Revenue for the quarter to 30 June 2021 was $100.1 million.

FY21 earnings before interest, tax, depreciation and amortisation (EBITDA) excluding IPO costs is expected to be at the upper end of guidance (which is between $17 million to $20 million).

Fourth quarter overall broadband connections increased 7.4% and business broadband connections increased 12% on the previous quarter.

It also said that fourth quarter mobile services increased by 20% from the previous quarter, up from 18,684 to 22,454 connections.

Aussie Broadband also said it has signed its first white label customer.

The company said that it launched services on the new Optus mobile virtual network operator (MVNO) agreement.

The post ASX 200 rises, Afterpay soars, Zip jumps appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Aussie Broadband Limited and AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Aussie Broadband 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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ASX gold shares, as a whole, have not had the best of years.

After riding high in the early months following the outbreak of the global pandemic, most ASX gold shares have retraced sharply over the past 12 months.

The Newcrest Mining Ltd (ASX: NCM) share price, for example, has lost 25% over the past full year. The Northern Star Resources Ltd (ASX: NST) has fallen 35%. And the Gold Road Resources Ltd (ASX: GOR) share price is down 29%.

This comes as the gold price has also fallen, down roughly 12% since this time last year. The yellow metal has dropped from US$2,064 (AU$2,827) per troy ounce in early August 2020 to the current price of US$1,810 per troy ounce.

While numerous factors impact the price of ASX gold shares, the value of the metal they dig from the ground is one investors keep a sharp eye on.

Why China frictions could boost the gold price

No one, we have to hope, wants to see recent tensions between the West and China continue to simmer. Let alone get worse.

Not even investors in ASX gold shares, which could receive a boost if these simmering tensions end up driving gold prices higher.

That potential was highlighted by Ian Goldin. Goldin is a professor of globalisation and development at the University of Oxford, a former adviser to South Africa’s Nelson Mandela and a former vice-president of the World Bank.

Speaking at the Diggers & Dealers mining conference underway in Western Australia, Goldin warned of the potential fallout from the United States’ and Australia’s frictions with China.

As the Australian Financial Review reports, Goldin said, “he was bullish about the gold price given the pandemic, the threat of a new Cold War [with China] and as central banks continued to print money as part of stimulus packages”.

“My own view is it stay around US$2000 an ounce. I do think gold will hold its own,” he said.

If Goldin is right and gold prices do stabilise at that level, it will represent more than a 10% increase from the current price. Which in turn will help ASX gold shares boost their profit margins.

How have these ASX gold shares been performing?

Let’s look at the 12-month performance for 3 leading ASX gold shares up top.

More recently the Newcrest share price is roughly flat year-to-date, and up 5% over the past month.

Meanwhile, the Northern Star share price has continued to struggle in 2021, down 22% this calendar year. Over the past month, the share price has turned around, up 4%.

Finally, ASX gold share Gold Road is down 3% year-to-date and up 3% over the last month.

The post How China tensions could be a boon for ASX gold shares appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Bernd Struben 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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