In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a small decline. At the time of writing, the benchmark index is down 0.15% to 7,270.7 points.

Four ASX shares that are not letting that hold them back today are listed below. Here’s why they are pushing higher:

CogState Limited (ASX: CGS)

The CogState share price is up a massive 58% to $1.46. Investors have been buying the neuroscience technology company’s shares following news that Eisai and Biogen have gained Accelerated Approval from the US FDA for aducanumab for the treatment of Alzheimer’s disease. Cogstate believes its digital cognitive assessment technology could play an important role in supporting the types of large-scale cognitive assessment that will be necessary in the launch of disease modifying therapies like aducanumab. It has a global deal with Eisai.

Contact Energy Limited (ASX: CEN)

The Contact Energy share price is up 5% to $7.62. This follows the release of a business update by the energy company this morning. That update revealed improvements in its overall performance and pricing.

EML Payments Ltd (ASX: EML)

The EML Payments share price is up 5% to $3.65. Investors have been buying the payments company’s shares after broker responded positively to its trading update from yesterday afternoon. One of those was UBS, which responded by retaining its buy rating and $5.30 price target. Based on its update, it expects EML Payments to deliver a result at the top end of its guidance in FY 2021.

OM Holdings Limited (ASX: OMH)

The OM Holdings share price is up 2.5% to 78.5 cents. This morning the manganese and silicon company announced that it has obtained the approval of the Securities Commission Malaysia and Bursa Malaysia Securities Berhad to proceed with its secondary listing. The company notes that it is known by many in Southeast Asia through its smelter operations in Sarawak.

The post Why Cogstate, Contact Energy, EML, & OM Holdings are pushing higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 up 0.1%: Tech shares rise, Ansell names new CEO
• Why the Cogstate (ASX:CGS) share price is rocketing 73% higher
• EML Payments (ASX:EML) share price jumps 5% on Q3 trading update
• Why the EML Payments (ASX:EML) share price sank 42% in May
• These were the worst performing ASX 200 shares in May

James Mickleboro does not own any shares 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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Ratings agency S&P Global has been busy looking over the Australian banking sector this week and has given its verdict.

S&P is positive on the banking sector and has raised its outlooks to stable from negative on the long-term issuer credit ratings on the four major banks and Macquarie Group Ltd (ASX: MQG).

It commented: “We believe that the Australian banking system’s funding profile has improved in the past 10 years on the back of growing customer deposits and falling offshore borrowings.”

The ratings agency notes that its issuer credit ratings are two notches above the bank’s standalone credit profiles. This reflects its view that, if needed, the systemically important banks are likely to receive timely financial support from the Australian government.

How does S&P Global rate the banks?

This morning Australia and New Zealand Banking GrpLtd (ASX: ANZ), National Australia Bank Ltd (ASX: NAB), and Westpac Banking Corp (ASX: WBC) all confirmed that S&P has revised the outlook for their long-term issuer credit ratings to stable from negative.

The ratings agency also affirmed their long-term issuer credit ratings at AA- and A-1+ for the short term.

However, it is worth noting that the rating outlook for both Westpac New Zealand Limited and for Westpac Life-NZ Ltd was unchanged at negative. This reflects the potential for reduced support as Westpac is considering alternative ownership structures.

Australia given thumbs up

Today’s action follows news that S&P has revised its overall outlook on its long-term ratings on Australia to stable from negative.

S&P explained: “The government’s swift and decisive fiscal and health response to contain the pandemic and limit long-term economic scarring has seen the economy recover quicker and stronger than we previously expected.”

“The stable outlook reflects our expectations that the general government fiscal deficits will narrow in line with our forecasts. We expect the budget to be supported by steady revenue growth, aided by robust commodity prices and expenditure restraint. We believe Australia’s external accounts are likely to remain stronger than in the past and be resilient during potential crises,” it concluded.

The post S&P Global gives ASX bank shares the thumbs up appeared first on The Motley Fool Australia.

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James Mickleboro owns Westpac shares. 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 Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Motley Fool Australia Chief Investment Officer Scott Phillips joined Weekend Sunrise on Sunday to discuss the booming mining industry’s contribution to the economy — and the budget — and gave his verdict on iron ore miners’ share prices.

The post The mining boom is digging us out of recession, but where to for the BHP share price? appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips 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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El Salvador President Nayib Bukele has declared he intends to make Bitcoin (CRYPTO: BTC) legal tender in the Central American nation.

The move would make El Salvador the first country in the world to accept the cryptocurrency as legal tender. Let’s take a closer look at the news.

Bitcoin to be legal tender

In a video broadcast at the Bitcoin 2021 conference on Sunday morning (AEST), President Bukele said he planned to submit a legislature bill to El Salvador’s legislative assembly that would make Bitcoin legal tender.

Welcome to the future #Bitcoin pic.twitter.com/j30vcZVXvJ

— Nayib Bukele (@nayibbukele) June 5, 2021

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According to President Bukele, the move would give El Salvador’s citizens more financial freedom.

In a Twitter Inc. (NYSE: TWTR) thread, the president stated that 70% of El Salvador’s population did not have bank accounts – making the ability to transfer Bitcoin outside of banks a major upside to the use of crypto as official currency.

He added that US$6 billion worth of remittances were sent to Salvadoran families each year – a large percentage of which was taken in fees.

President Bukele tweeted:

By using [Bitcoin], the amount received by more than a million low income families will increase in the equivalent of billions of dollars every year.

President Bukele also stated if 1% of Bitcoin was invested into El Salvador, the country’s GDP would increase by 25%.

The president went on to sell El Salvador to potential residents – offering permanent residency in the nation to cryptocurrency entrepreneurs.

1. Great weather, world class surfing beaches, beach front properties for sale.
2. One of the few countries in the world with no property tax.
3. No capital gains tax for #Bitcoin, since it will be a legal currency.
4. Immediate permanent residence for crypto entrepreneurs. https://t.co/j3eugJQCMd

— Nayib Bukele (@nayibbukele) June 6, 2021

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El Salvador’s financial troubles

According to reporting by Forbes, El Salvadore’s use of the US dollar as its major currency has recently caused issues for the country.

In 2001, El Salvador replaced its own currency with the US dollar to stabilise the nation’s financial system.

Then, in an effort to minimise the economic impacts of the coronavirus pandemic, the US Federal Reserve increased the amount of available US dollars.

Forbes reported the move by the US Federal Reserve caused El Salvador to lose purchasing power due to inflation.

Unlike the US dollar, the amount of Bitcoin available is capped – meaning it’s more resistant to inflation.

About the Bitcoin price

The Bitcoin price has fallen 8% since President Bukele’s announcement on Sunday, with a single Bitcoin trading at $42.227 at the time of writing. This continues a significant drop in the Bitcoin price over the past month, down 43.8% since 8 May.

The post Could this be the first country to adopt Bitcoin as legal tender? appeared first on The Motley Fool Australia.

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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 shares of and has recommended Bitcoin and Twitter. 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 AGL Energy Limited (ASX: AGL) share price is edging higher today after Australia’s largest electricity provider unveiled its plans for a “concentrated solar thermal” project.

At the time of writing, the AGL share price is flat at $9.08 a piece.

Who moved my cheese?

Dr. Spencer Johnson’s wildly popular book “Who Moved My Cheese” describes an important aspect of business. If you haven’t read the book – it’s a short story of two mice, Sniff and Scurry; and two little people, Hem and Haw, that are faced with the dilemma of dwindling cheese reserves.

Sniff and Scurry decided to take a chance and begin looking for the next delectable block of cheese before their current one ran out. Meanwhile, Hem and Haw basked in the delight of their current cheese block, ignoring the vanishing supply – until one day it was gone.

Point being, it often pays to move out of one’s comfort zone voluntarily, rather than the decision being made for you at an inconvenient time. Which makes for quite an interesting overlay when considering Australia’s shift to renewables.

AGL’s latest news might be the energy company’s attempt at searching for the new block of metaphorical cheese. According to The Sydney Morning Herald, AGL is planning to replace the Liddell coal-powered thermal power station with a solar-and-hydro energy facility once the plant shuts down in 2023.

This development is in addition to AGL’s work with RayGen on a “concentrated solar thermal” project in Carwarp, Victoria. Construction has already commenced on this renewable endeavour – capable of delivering 4 megawatts of solar power and 50 megawatt-hours of storage.

PrimeCo involvement

Interestingly, the low carbon replacement for Liddell is expected to be encompassed by AGL’s PrimeCo business – not ‘New AGL’. Speaking in an interview with The Australian Financial Review, interim chief executive Graeme Hunt said:

For things that are on the land where PrimeCo will continue to have thermal generation for some time to come yet it is most likely that PrimeCo will be the participant in the project.

In March, the company’s proposed ‘New AGL’ was described as ‘the business with a clear pathway to full carbon neutrality’.

ASX utilities and AGL

It’s been a challenging 12 months for ASX-listed utilities, including AGL Energy. The S&P/ASX 200 Utilities [XUJ] (ASX: XUJ) index has sunk roughly 22% during the past year. Similarly, the AGL share price has eroded by 48%.

Both the utility sector and AGL have substantially underperformed the S&P/ASX 200 Index (ASX: XJO). Perhaps the cheese was moved on the whole sector.

The post The AGL Energy (ASX:AGL) old dog with green new tricks appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Superloop Ltd (ASX: SLC) share price remains frozen today after the company revealed the details of its proposed acquisition and capital raising.

Superloop shares are expected to resume trading on Wednesday 9 June, pending the completion of the company’s placement and institutional entitlement.

Superloop to acquire Exetel

Superloop shares will be in focus when they resume trading after the company advised it will be forking out $100 million in cash and an additional $10 million in Superloop shares to acquire Exetel Pty Ltd. Exetel is Australia’s largest independent internet service provider.

Exetel will bring with it more than 110,000 consumer and business customers. With a post acquisition customer base of more than 155,000, Superloop expects the acquisition to accelerate its growth trajectory and provide the necessary scale for it to be a major provider in the Australian marketplace. Superloop also believes the addition of Exetel customers will accelerate the utilisation of its infrastructure assets, resulting in greater operating margins.

From an earnings perspective, Exetel forecasts FY21 revenue of more than $150 million, 95% of which is recurring revenue, and earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $11 million.

The acquisition announcement also highlighted that the combined group will realise $5 million in annualised synergies and cost savings. Cost reduction from external wholesale services is expected to commence immediately, with full cost savings expected to be achieved within 12 months.

The combined group expects FY21 EBITDA to jump 89% from $18 million to $34 million. This is comprised of $18 million EBITDA from Superloop, $11 million EBITDA from Exetel and $5 million in expected synergies.

Superloop will fund this acquisition with a $100 million capital raising at 93 cents per new share. The offer price represents a 10.6% discount to $1.04 the Superloop share price closed at on 4 June.

Superloop share price snapshot

Its been a flat year for the Superloop share price, currently trading at $1.04 and starting the year off at $1.06.

The company has struggled to inspire the market despite a solid half-year results announcement that delivered a 3.8% increase in revenue and an improvement in net losses. The Superloop share price slumped almost 9% to 95 cents on the day of the release.

The post Superloop (ASX:SLC) shares remain halted amid cap raise and acquisition appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun 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 SUPERLOOP FPO. 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 National Storage REIT (ASX: NSR) share price won’t be going anywhere today. This follows the company’s announcement that its shares have been placed in a trading halt.

At Monday’s market close, the self-storage provider’s shares were changing hands for $2.08 apiece.

Why are National Storage shares halted?

National Storage shares entered a trading halt before market open this morning so the company could launch an accelerated non-renounceable entitlement offer.

This will see 1 share issued for every 6.27 shares owned at a price of $2.00, representing a 3.8% discount on Monday’s closing price. The company is hoping to raise approximately $325 million to repay debt and provide further liquidity on its balance sheet.

The entitlement offer represents 15.9% of total stapled securities currently on issue. Stapled securities means the combined 6.27 shares on offer cannot be bought or sold separately.

National Storage managing director Andrew Catsoulis commented:

This will enable us to further strengthen our balance sheet in order to facilitate ongoing growth of the business from a development, expansion and centre revitalisation basis, as well as enabling us to undertake continued acquisitions on a selected basis.

How has National Storage been performing?

In addition to the capital raise, National Storage provided a glimpse into its operational performance for the second half of FY21.

According to the company’s release, strong market conditions and ongoing portfolio improvements have driven revenue growth. In particular, National Storage achieved a record occupancy of 86.7%, up 9.1% on the prior corresponding period. This is for both Australian and New Zealand portfolios.

In addition, National Storage’s REVPAM (revenue per available square metre) increased to $229 per square metre, up from $188 at the end of FY20.

The rate per square metre also lifted to $261, a 5.2% increase on the $248 per square metre at the end of FY20.

Mr Catsoulis added:

All states and territories in which NSR operates continue to perform strongly and all these areas are now trading at over 80% occupancy, with over 35% of all centres now operating at over 90% occupancy, and approximately 70% operating at over 85%.

We attribute this strong operational result to a positive macroeconomic environment as well as a number of internal operational improvements over the past 12 to 18 months. These enhancements include an updated and fully rebuilt website, the integration of our “contact-free move-in“ process, refinements made to our revenue management system, as well as the internalisation of a number of key functions in the business that were previously outsourced.

Guidance update

Looking ahead, National Storage provided a positive outlook when taking into account the equity raising and robust operating performance.

For FY21, underlying earnings per share (EPS) is expected to slightly increase from 8.5 cents to 8.6 cents per stapled security. Previously the company was forecasting EPS to be in the range of 8.1 cents to 8.5 cents.

Preliminary guidance for FY22 underlying EPS is projected to be no less than an 8% growth on the FY21 result.

National Storage is scheduled to release its full-year results for 2021 on 25 August 2021.

Over the past 12 months, the National Storage share price has gained around 12%, and is up 9% this year.

The post Why the National Storage (ASX:NSR) share price is frozen appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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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Australia’s second biggest bank, Westpac Banking Corp (ASX: WBC), has become the latest bank to increased fixed interest rates for potential home buyers that are getting a loan with principal and interest repayments.

According to reporting by the Australian Financial Review, Westpac is going to increase its two-year and three-year fixed rate loans by 10 basis points and this will be also implemented with its smaller banks: St George, BankSA, Bank of Melbourne and RAMS.

It isn’t the first big bank to increase the fixed interest rate. The biggest Australian bank, Commonwealth Bank of Australia (ASX: CBA), decided to increase fixed rate last month.

The AFR quoted a spokesman for Westpac who said:

In making this decision, we took into account multiple factors including the need to manage pricing changes in a sustainable way.   

We are in a record low interest rate environment and continue to offer competitive home loan rates for customers.

Depending on the direction of the cost of Westpac’s funding, this interest rate rise might mean Westpac can earn a slightly higher net interest margin (NIM) on the loans it gives out.

What has been happening for Westpac recently?

Over the last six months the Westpac share price has risen by over 32%.

Just over a month ago, the big four ASX bank reported its FY21 half-year result which showed a sizeable profit improvement year on year. Excluding notable items, Westpac’s cash earnings went up 60% to $3.82 billion.

Statutory net profit was up 189% to $3.44 billion. Westpac’s cash earnings went up 256% to $2.54 billion. However, the net interest margin (NIM) dropped 4 basis points year on year to 2.09%. But compared to the second half of FY20, the NIM went up 6 six basis points.

Westpac’s balance sheet improved, the common equity tier 1 (CET1) capital ratio improved by 153 basis points to 12.34%.

The CEO of Westpac, Peter King, gave some comments on the outlook for the bank and economy:

It has been a promising start to the year with increased cash earnings, growth in mortgages and continued balance sheet strength.

First half earnings were considerably higher than the prior corresponding period, mainly due to an impairment benefit reflecting improved asset quality and a better economic outlook. Notable items were also lower.

Importantly, we are beginning to see the benefits of our new operating model through improved performance.

Our Australian mortgage book increased $2.6 billion over the past six months, with good growth in owner occupier loans partly offset by lower investor lending. Owner occupier loans increased 3 per cent, with first home buyers making up 13 percent of new loans.

Australia and New Zealand have managed the pandemic well and we are proud to have helped so many customers return to full repayments. Stressed exposures to total committed exposures ended the half at 1.60 per cent, compared to 1.91 per cent at 30 September 2020.

While the economic outlook is more positive, there is still some uncertainty and we have remained prudent in our impairment provisioning.

The post Westpac (ASX:WBC) just made it a bit more expensive to buy a house with higher interest rates 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 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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We Fools like to tout the virtues of long-term investing. Holding a basket of quality ASX shares with a long-term horizon is one of, if not the, best way to invest for maximum wealth creation. Well, that’s the Warren Buffett playbook, and it seems to have worked pretty well for him over 6-plus decades of investing.

But what about those investors who don’t like investing? And perhaps have followed one of Buffett’s other pieces of wisdom – buy an index fund and just keep adding to it.

This ‘passive investing’ method is also recommended by many investors – and for good reason. By entrusting your capital to an index fund, your money can just follow ‘the market’ over time. Sure, you might not get a juiced-up return. But you also don’t have to put nearly as much work into it.

So how would an investor who has followed this method of index investing have fared over the past year? Or 5 years?

How has the ASX 200 historically performed?

Let’s take a simple S&P/ASX 200 Index (ASX: XJO) fund like the iShares Core S&P/Asx 200 Etf (ASX: IOZ). This exchange-traded fund (ETF) is your typical Aussie index fund – just investing in every company on the ASX 200, proportioned by market capitalisation.

This index fund has returned an average of 9.82% per annum over the past 3 years, 9.97% over the past 5, and 8.37% since its inception in December 2010. However, it’s also returned 28.12% over the past 12 months, including 10.4% in 2021 so far alone (remember, it’s only June). Is that normal?

Well, no, not if you define normal as the long-term returns we discussed earlier. But wait, what about the market crash last year, you might say. Isn’t that distorting these numbers somewhat? Well, in a way. But the market crash happened over March and April last year. By early June 2020, the ASX 200 had already recovered close to 25% from its March lows. So we can take a large part of the ‘2020 crash factor’ away from the returns of the past 12 months.

Long story short, the returns that passive index investors have enjoyed over the past 12 months are not normal, at least by the ASX 200’s historical standards. Now, no one knows what the markets will do over the next year or two (or even the next day or two). But history tells us that we probably shouldn’t be expecting a 28.12% return every year from now on.

That might leave some investors disappointed. But that’s the way the cookie crumbles, as they say. But who knows, maybe if we all temper our expectations, we might be pleasantly surprised.

The post Is the ASX 200’s stellar 2021 performance normal? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) is bouncing back from yesterday’s decline. The benchmark index is currently up 0.1% to 7,290.5 points.

Here’s what is happening on the market today:

Tech shares rise

Tech shares such as Pro Medicus Limited (ASX: PME) and WiseTech Global Ltd (ASX: WTC) are pushing higher today and helping drive the S&P/ASX All Technology Index (ASX: XTX) up 0.7%. Investors have been buying tech shares following another positive night on the Nasdaq index. The tech-heavy index recorded a 0.5% gain during overnight trade. This compares to a 0.35% decline by the Dow Jones.

Travel shares rebound

News that Victoria will be ending its lockdown on Thursday has gone down well with the market and particularly the travel sector. The likes of Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) shares are pushing higher today, with investors seemingly banking on this giving the domestic travel market a big boost in the coming weeks and months.

Ansell names its new CEO

The Ansell Limited (ASX: ANN) share price is trading lower despite announcing its new CEO. This morning the health and safety products company announced that Neil Salmon will become its new Managing Director and CEO on 1 September. This follows a comprehensive internal and external search for a successor. Mr Salmon is currently the company’s President of the Industrial Global Business Unit. He will be replacing the retiring Magnus Nicolin.

Best and worst ASX 200 performers

The EML Payments Ltd (ASX: EML) share price is the best performer on the ASX 200 on Tuesday with a 4.5% gain. This morning UBS responded to the payments company’s trading update by retaining its buy rating and $5.30 price target. The worst performer has been the Infratil Ltd (ASX: IFT) share price with a 2.5% decline on no news.

The post ASX 200 up 0.1%: Tech shares rise, Ansell names new CEO appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares 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 Ansell Ltd, EML, Flight Centre, Pro Medicus and Webjet. 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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