All eyes will be on the Wesfarmers Ltd (ASX: WES) share price this morning following the release of a trading update ahead of its virtual annual general meeting.

How is Wesfarmers performing in FY 2021?

This morning Wesfarmers’ Managing Director, Rob Scott revealed that the company has had a pleasing start to the year.

He commented: “Despite the challenging operating environment, the results across the Group’s retail businesses reflect their continued focus on meeting the changing needs of customers and delivering greater value, quality and convenience while providing safe and trusted environments for customers to shop.”

He notes that significant demand growth has continued in Bunnings, Officeworks, and Catch following the strong results reported in the second half of the 2020 financial year.

Trading update.

The key Bunnings business has arguably been the star of the show. At the end of October, the hardware giant’s year to date sales were up 25.2% over the prior corresponding period.

This was driven by a 30.9% increase in comparable store sales. This metric excludes stores impacted by government-mandated temporary closures in Melbourne and Auckland.

Management notes that its strong sales growth has continued in both consumer and commercial segments. Consumer sales remained particularly strong as customers spent more time undertaking projects around the home.

The Kmart business has been performing well despite wide-spread store closures. It delivered 3.7% sales growth year to date. Comparable store sales were up 9.4% over the period.

Things weren’t quite as positive for the Target business, which has recorded a 2.2% decline in sales year to date. This is despite comparable store sales rising 9.9% over the prior corresponding period.

Management advised that continued growth in home, active, and kids categories was partially offset by lower customer demand for apparel products. In addition to this, the government-mandated temporary closure of 38 Kmart stores and 32 Target stores in Melbourne impacted sales, partially offset by very strong online growth.

Excluding its Melbourne stores, both Kmart and Target delivered sales growth of 12.1% and 7.8%, respectively.

The Officeworks business has continued its strong form and reported year to date sales growth of 23.4%. Its sales growth has been supported by strong demand for technology and home office furniture products. However, its margins have continued to be impacted by changes in sales mix. This is particularly the case across Melbourne stores where higher margin categories, such as office supplies and print, copy & create, were disproportionately impacted.

The company’s online Catch business was a very strong performer. It reported a 114.4% increase in gross transaction value during the first four months of FY 2021.

Management advised that it experienced strong growth in both its in-stock and marketplace segments. Furthermore, at the end of October Catch had 2.7 million active customers, compared to 2.3 million active customers at the end of the 2020 financial year.

Catch is continuing to invest significantly in technology, marketing and enhancements to its customer offer to further accelerate growth in gross transaction value.

Finally, the company’s industrial divisions have made a pleasing start to the year. In Chemicals, Energy and Fertilisers, demand for ammonium nitrate remains resilient but, as always, management warned that the outlook for the division is dependent on commodity prices and seasonal conditions.

More reading

• 5 things to watch on the ASX 200 on Thursday
• 2 ASX dividend shares analysts rate as a ‘buy’
• ASX 200 Weekly Wrap: US election special
• What to expect from these ASX blue chip dividend shares in 2021
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Telstra Corporation Ltd (ASX: TLS) share price will be in focus today after the release of a major announcement by the telco giant.

What did Telstra announce?

This morning Telstra announced an important milestone in its T22 strategy with the proposed restructuring of the company to create three separate legal entities.

Telstra’s CEO, Andrew Penn, believes the restructure would enable the company to take advantage of potential monetisation opportunities for its infrastructure assets which could create additional value for shareholders.

He commented: “The proposed restructure is one of the most significant in Telstra’s history and the largest corporate change since privatisation. It will unlock value in the company, improve the returns from the company’s assets and create further optionality for the future.”

“The challenges and disruptions of the last 6-12 months have reinforced the increasing value of infrastructure assets globally; the importance of the digital economy, not only to business but to the whole of Australia and its economic recovery; and the dependence of the digital economy on telecommunications as its platform,” Mr Penn added.

What are the changes?

The proposed legal structure within Telstra is expected to be completed by December 2021 and would be:

InfraCo Fixed – it would own and operate Telstra’s passive or physical infrastructure assets: the ducts, fibre, data centres, subsea cables and exchanges that underpin Telstra’s fixed telecommunications network.

InfraCo Towers – it would own and operate Telstra’s passive or physical mobile tower assets, which Telstra will look to monetise over time given the strong demand and compelling valuations for this type of high-quality infrastructure.

ServeCo – it would continue to focus on creating innovative products and services, supporting customers and delivering the best possible customer experience. ServeCo would own the active parts of the network, including the radio access network and spectrum assets to ensure Telstra continues to maintain its industry leading mobile coverage and network superiority.

Trading update.

In addition to the above, Telstra provided an update on its performance in FY 2021 and its expectations for the full year and beyond.

Pleasingly, the company has reconfirmed the FY 2021 guidance provided to the market with its full year results in August.

Furthermore, with the NBN rollout effectively complete and being more than half way through its T22 strategy, the company’s chief executive believes it will return to underlying EBITDA growth by FY 2022. After which, it is aiming to grow its underlying EBITDA to the range of $7.5 billion to $8.5 billion in FY 2023.

Mr Penn commented: “While we do not provide financial guidance beyond the current financial year, our board and management team understands the importance of achieving EBITDA in this range and the actions required to deliver it.”

”If we are successful in getting into the bottom end of the $7.5 – $8.5 billion underlying EBITDA range by FY23, this would equate to an estimated ROIC of close to 8 percent. As a result, we have updated our ROIC target accordingly to be around 8 percent by FY23,” he added.

Mr Penn also revealed that 5G adoption has been strong this year and is expected to strengthen further by the end of the year.

He explained: “Our mobile business continues to perform strongly relative to our competition. Our clear lead in 5G means we have the opportunity to capitalise on a new multi-year cycle of growth and our transacting minimum monthly commitment has continued to grow in FY21. We already have more than 400K 5G devices on our network and we expect that to reach around 750K by the end of the calendar year. “

More reading

• ASX 200 Weekly Wrap: US election special
• What to expect from these ASX blue chip dividend shares in 2021
• 2 ASX dividend shares with yields over 8% today
• Government declares 2021 as ‘Year of 5G’
• Why the Novatti (ASX:NOV) share price jumped 10% on open today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Did you know that Brickworks Limited (ASX: BKW) hasn’t cut its dividend in more than four decades?

Many ASX shares cut (or at least deferred) their dividends in 2020 because of the global COVID-19 pandemic. Brickworks said it was proud to be one of the very few S&P/ASX 200 Index (ASX: XJO) companies that increased dividends during the pandemic. Brickworks also didn’t raise capital or receive government support payments during the COVID-19 period.

Lots of businesses also cut their dividends during the GFC, but Brickworks did not. 

Brickworks boasts of a long history of dividend growth. It has been 44 years since dividends were last decreased in 1976.

An overview of Brickworks

Brickworks has been a leading building products for many decades. It has a number of bricks brands including Austral Bricks, Bowral Bricks and Daniel Robertson. Brickworks also operates in other Australian building products categories including precast, paving, masonry and roofing.

It has also quickly become the market leader for bricks in the north east of the United States after making three acquisitions including Glen Gery.

There are two other segments to its business. The first is that it owns 50% of an industrial property trust along with Goodman Group (ASX: GMG). Brickworks sells excess land that it had previously used into the JV property trust so that the land can be used for building industrial properties.

Both Amazon and Coles Group Ltd (ASX: COL) will soon be tenants for the property trust which is building large distribution centres for those retail giants to use and rent. Following the completion of these two facilities, the gross assets held within the various JV trust assets across Western Sydney and Brisbane is expected by Brickworks to exceed $3 billion.

The final division is its investment holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares. It owns around 40% of Soul Patts. Brickworks says that Soul Patts has a diversified portfolio of assets and has a proven investment approach that has delivered “outstanding” returns over the long-term. At the time of Brickworks reporting its FY20 result, Soul Patts had delivered annualised total returns of 12.7% per annum over the past 20 years, which represented outperformance of 5.2% per annum compared to the ASX All Ordinaries Accumulation Index.

Dividend record

As mentioned above, Brickworks has maintained or grown its dividend every year for over four decades.

Brickworks says that its dividend is funded entirely from the distributions from the property trust JV as well as the dividends from Soul Patts. The property trust keeps growing its net rental profit and Soul Patts keep increasing its dividend, which allows Brickworks to continue to grow its dividend. it doesn’t need any building products cashflow to pay its current dividend. 

The ASX dividend share increased its FY20 dividend by 3.5% to $0.59 per share. At the current Brickworks share price, that amounts to a grossed-up dividend yield of 4.3%.

The Motley Fool Dividend Investor service commented on Brickworks’ in its latest buy recommendation of the company: “This, along with the diversified nature of its assets, is one of the key reasons behind the company’s incredible decades-long dividend paying track record. In the current low interest rate environment, the size and reliability of its dividend should prove to be attractive for those investors looking for a reliable income stream.

“Brickworks offers a compelling dividend investment opportunity. Combining its strong market positions, a quality management team, shareholder base and a solid balance sheet”.

The Dividend Investor service still rates Brickworks as a buy.

More reading

• These ASX dividend shares smash term deposits
• ASX 200 surges again on Wednesday
• Latest ASX stocks to be hit by a broker downgrade
• The irresistible urge that costs retail investors 3% a year
• 2 ASX dividend shares analysts rate as a ‘buy’

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article is about two technology exchange-traded funds (ETFs) that are generating big returns.

What is an ETF?

I’ve already linked to a lengthy article covering ETFs, but in summary it’s an investment vehicle that allows you to buy lots of businesses (or other assets) through a single investment, rather than needing to buy dozens or hundreds of businesses individually yourself.

Here are the tech funds

Betashares Nasdaq 100 ETF (ASX: NDQ)

BetaShares explains that the NASDAQ-100 comprises 100 of the largest non-financial companies listed on the NASDAQ market, and includes many companies that are at the forefront of the new economy.

Many people use one or more of the services of the ‘FAANG’ shares – Facebook, Apple, Amazon, Netflix and Google (Alphabet). Smartphones, googling something, watching some TV streamed over the internet, connecting with family on Facebook – all these are examples of something provided by a FAANG share.

The ETF gives exposure to some of the biggest businesses in the world including Apple, Microsoft, Amazon, Facebook, Alphabet, Tesla, Nvidia, Adobe, Netflix and PayPal.

Betashares Nasdaq 100 ETF has been one of the best-performing ETFs on the ASX over the past five years, returning an average of 19.8% per annum after fees. That return figure includes the annual management fee of 0.48% per annum.

However, this isn’t just a tech ETF, although almost half of it is invested in the ‘information technology’ sector. Another 19.1% is invested in the communication services sector, then 18.9% is invested in consumer discretionary, 6.7% in healthcare, 4.7% is invested in consumer staples and the rest is invested in industrials and utilities.

Whilst many of its biggest positions don’t pay dividends, the ETF usually pays two distributions each year. According to BetaShares, its 12-month trailing distribution amounts to a yield of 2.6%.

It’s still rated as a buy by the Motley Fool Pro service.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

According to BetaShares, this investment gives exposure to the 50 largest technology and online retail stocks in Asia (excluding Japan), including technology giants such as Alibaba, Tencent, Baidu and JD.com.

There are a couple of key reasons why BetaShares thinks investors may like this ETF.

Firstly, due to its younger, tech-savvy population, Asia is supposedly surpassing the West in terms of technological adoption and the sector is anticipated to remain a growth sector.

The other reason is that, with this one trade, BetaShares says investors get diversified exposure to a high-growth sector that is under-represented in the Australian share market, and a complement to investors with US technology exposure.

Here are the ETF’s top 10 biggest holdings: Tencent, Meituan, Samsung Electronics, Taiwan Semiconductor Manufacturing, Alibaba, JD.com, Pinduoduo, Infosys, Netease and KE Holdings.

The ETF is newer than the NASDAQ one, but it’s showing bigger returns as of right now. Since inception in September 2018, the ETF’s net returns has been an average of 32% per annum. That return figure includes the annual management fee of 0.67% per annum.

The entire holdings may classified as ‘technology’, but BetaShares has broken it down into down sub-sectors. Around two thirds of the ETF is invested in internet and direct marketing retail, semiconductors and interactive media and services.

In terms of geographical diversification, around 55% of the ETF is allocated to Chinese businesses. A further 22.3% is invested in Taiwan, 16.3% is invested in South Korea and 6.1% is invested in India. The other 0.4% is invested in Hong Kong and other countries.

The Betashares Asia Technology Tigers ETF is still rated as a buy by the Motley Fool Extreme Opportunities service.

More reading

• Zip and Flight Centre were among the most traded shares on the ASX last week
• I would buy the BetaShares NASDAQ 100 ETF (ASX:NDQ) and these ETFs this month
• 2 ETFs to buy next week
• I plan to invest heavily in ASX shares next week
• These ASX growth shares could be long-term market beaters

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In the current low interest rate environment, income investors will be lucky to receive an interest rate of 1% from term deposits.

Fortunately, the Australian share market is home to plenty of shares that offer dividend yields which are notably better than this.

For example, the two ASX dividend shares listed below provide yields of over 3.5% at present. Here’s what you need to know about them:

BWP Trust (ASX: BWP)

BWP is a real estate investment trust (REIT) that invests in and manages commercial assets across Australia. The majority of its assets are leased to home improvement giant, Bunnings Warehouse.

While 2020 has been difficult for many property companies because of the pandemic, BWP has come out of the crisis largely unscathed. This is because the Bunnings business has been a very strong performer this year and flourished during the pandemic. So much so, BWP Trust recognised a $93.6 million increase in the gains in fair value of its investment properties in FY 2020.

This allowed BWP to increase its full year distribution to 18.29 cents per unit. Based on the current BWP share price, this represents a 4.3% yield.

Coles Group Ltd (ASX: COL)

This supermarket giant has been a very positive performer in 2020 thanks to its defensive qualities and favourable changes in consumer behaviour during the pandemic. In FY 2020 the company delivered a 6.9% increase in sales to $37.4 billion and a 7.1% lift in net profit after tax to $951 million. The good news is that this strong form has continued in FY 2021, with Coles recently reporting strong first quarter sales growth.

One broker that believes this has put Coles in a position to increase its dividend again this year is Goldman Sachs. In response to its first quarter update, the broker has increased its earnings and dividend forecasts for the year. It now expects the company to pay a fully franked 64 cents per share dividend in FY 2021. Based on the current Coles share price, this equates to a 3.6% dividend yield.

More reading

• 2 ASX dividend shares analysts rate as a ‘buy’
• 3 compelling ASX shares rated as buys by brokers
• Why Coles, Incitec Pivot, Kogan, & Northern Star shares are crashing lower
• 2 ASX dividend shares with above-average yields
• Why big brokers are bullish about the Woolworths (ASX: WOW) share price 

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One thing the Australian share market is not short of, is tech shares growing at a strong rate.

Two exciting tech shares which have continued to grow strongly in 2020 despite the pandemic are listed below. Here’s what you need to know about them:

ELMO Software Ltd (ASX: ELO)

ELMO is a cloud-based human resources and payroll software company. Its software streamlines a range of processes such as employee administration, recruitment, remuneration, and payroll through a single a unified platform. ELMO currently has operations in both the ANZ and UK markets, which management estimates are worth $2.4 billion and $6.8 billion per year, respectively.

In respect to the latter, the company has just boosted its presence in the UK with the acquisition of UK-based Breathe for an initial payment of $32.4 million. Breathe is a fast-growing, scalable human resources platform for small businesses.

This acquisition led to ELMO increasing its FY 2021 annualised recurring revenue (ARR) guidance to be in the range of $72.5 million to $78.5 million. This is up from its previous guidance of $65 million to $70 million and represents strong growth on FY 2020’s ARR of $55.1 million.

Whispir (ASX: WSP)

Another tech share which has been growing strongly in 2020 is Whispir. It is a leading workflow communications platform provider which allows organisations to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. 

In FY 2020, Whispir posted a 25.5% increase in revenue to $39.1 million and ARR growth of 34% to $42.2 million. This compares to its prospectus forecast of $37.8 million and $42 million, respectively.

Pleasingly, its positive form has continued in FY 2021, with the company’s ARR lifting to $43.7 million at the end of September. This is still only scratching at the surface of a workflow communications platform as a service market which management estimates could be worth US$8 billion per year by 2024.

More reading

• 3 exciting small cap ASX tech shares to watch
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• 3 explosive ASX growth shares to buy with $3,000
• 5 ASX tech shares that could be the next WAAAX stocks

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 recommends Elmo Software and Whispir Ltd. The Motley Fool Australia has recommended Elmo Software and Whispir Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Wednesday the S&P/ASX 200 Index (ASX: XJO) continued its impressive run and charged higher again. The benchmark index rose a sizeable 1.7% to 6,449.7 points.

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

ASX 200 poised to rise again.

The Australian share market looks set to extend its positive run on Thursday. According to the latest SPI futures, the ASX 200 is expected to open the day 34 points or 0.5% higher. This follows a positive night of trade on Wall Street, which in late trade sees the Dow Jones up slightly, the S&P 500 up 0.8%, and the Nasdaq up 1.9%.

Xero half year update.

The Xero Limited (ASX: XRO) share price will be one to watch this morning when the cloud-based business and accounting software platform provider releases its half year results. At the start of August, the company’s subscriber numbers were up 96,000 since the start of the financial year to 2.38 million. With the Xero share price hitting a record high yesterday, investors appear to be expecting further growth in this metric today.

Oil prices climb higher again.

It could be another positive day for energy producers including Beach Energy Ltd (ASX: BPT) and Santos Limited (ASX: STO) after oil prices continued to rise. According to Bloomberg, the WTI crude oil price climbed 0.9% to US$41.73 a barrel and the Brent crude oil price rose 1% to US$44.04 a barrel. Oil prices continued to rise amid COVID-19 vaccine optimism and declining U.S. crude stocks.

Gold price softens.

Gold miners such as Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR) could continue their slide on Thursday after the gold price softened. According to CNBC, the spot gold price has fallen 0.7% to US$1,863.50 an ounce.

Annual general meetings.

Another group of shares are due to hold their virtual annual general meetings on Thursday and are likely to provide trading updates. This includes the likes of appliance manufacturer Breville Group Ltd (ASX: BRG), aerial imagery company Nearmap Ltd (ASX: NEA), and conglomerate Wesfarmers Ltd (ASX: WES).

More reading

• ASX 200 surges again on Wednesday
• Why the Xero (ASX:XRO) share price jumped 13% to a record high today
• Where you could invest $20,000 into ASX shares today
• Why Bingo, Evolution, JB Hi-Fi, & Super Retail shares are dropping lower
• 2 ASX dividend shares analysts rate as a ‘buy’

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 Nearmap Ltd. and Xero. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The InvoCare Limited (ASX: IVC) share price will be on watch on Thursday following the release of an announcement after the market close.

What did InvoCare announce?

This afternoon the funerals company announced that it has entered into conditional sales agreements to acquire 100% of the shares of Family Pet Care and the business and assets of Pets in Peace.

InvoCare has agreed a combined price of $49.8 million, of which $11.5 million represents deferred consideration subject to the attainment of 2-year earnings targets.

Management notes that the two acquisitions will provide InvoCare a national footprint and position it as the market leader in pet cremation and pet after life services in Australia.

They also represent a strategic expansion of the company’s existing pet cremation business in NSW (Patch and Purr), putting it in a position to capture a larger slice of an industry estimated to be growing at ~9% per annum.

The acquisitions are forecast to deliver combined annual revenue of ~$19.3 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $5.2 million. Management also expects the acquisitions to be earnings per share accretive in the first full year of operations.

“High-quality businesses.”

InvoCare’s Chief Executive Officer, Martin Earp, appeared to be very pleased to be able to acquire these high-quality businesses.

He said: “The acquisitions are a significant expansion into the adjacent market of pet cremations building on our 2018 entry into this market in NSW and transforming the Pet Cremation division of InvoCare into a meaningful contributor to overall earnings. We are excited to complete these transactions as they are both very high-quality businesses providing exceptional levels of customer service.”

Mr Earp sees the expansion of this side of the business as a natural evolution for the funerals company.

The chief executive commented: “Expanding the pet cremation business is a natural evolution for InvoCare providing opportunities to leverage its decades of operating in the end of life market. In addition, it is our belief that our deep experience in memorialisation in our core business will transfer across to the pet sector given the increasing trend towards the humanisation of the pet industry.”

“I am also delighted to announce that the current owners and leadership teams of both businesses will remain in place to ensure that we continue to provide the highest level of customer service and facilitate a smooth integration with InvoCare’s existing pet cremation operation, Patch & Purr. This will include building on the market leading service proposition provided through Patch & Purr’s technology and bespoke cremations,” he concluded.

More reading

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• Propel Funeral (ASX:PFP) share price springs to life after quarterly update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended InvoCare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) surged higher on Wednesday, it went up 1.7% today to 6,450 points.

Here are some of the highlights from the ASX today:

Commonwealth Bank of Australia (ASX: CBA)

CBA announced its first quarter trading update today.

The big four ASX bank revealed that it generated $1.9 billion of statutory net profit after tax (NPAT) in the quarter for the three months to 30 September 2020.

It also said that it made $1.8 billion of cash NPAT, which was down 16% on the same period last year.

CBA reported that its income was stable compared to the quarterly average for the second half of FY20. Its core volume growth helped to offset lower net interest margins. Meanwhile, expenses rose by 2% excluding customer remediation (or down 4% including customer remediation provisions in the second half of FY20).

The ASX 200 bank said that its credit quality indicators insulated by repayment deferrals and government support initiatives. The provision coverage was strengthened through forward looking adjustments for economic assumptions and expected COVID-19 impacts.

The strong balance sheet settings were maintained, with deposit funding at 74%. The CET1 capital ratio of 11.8%, which was an increase of 20 basis points after the payment of the FY20 final dividend.

CBA CEO Matt Comyn said: “Disciplined execution of our strategy and strong operational performance continued to deliver good outcomes for our stakeholders during the September quarter. Our strong balance sheet, focus on operational excellence and the dedication and commitment of our people ensures we remain well placed to support our customers and the wider community through ongoing challenges of COVID-19.

Looking at CBA’s home loan deferrals, there was a reduction in the deferred balance of around $18 billion. There are approximately 45,600 home loans still in deferral at the end of October, worth around $19 billion – of these 27% are due to expire and exit in November, though they may be extended. 

The CBA share price rose 2.75% in reaction to this news.

Oil businesses

The oil industry has gone up again after a strong reaction yesterday to the hopeful vaccine news.

Today, the Woodside Petroleum Limited (ASX: WPL) share price went up 6.3%, the Santos Ltd (ASX: STO) share price grew by 6.4%, the Oil Search Limited (ASX: OSH) share price grew by 7.5% and the Beach Energy Ltd (ASX: BPT) share price rose 7%.

Mesoblast Limited (ASX: MSB)

The Mesoblast share price went up by around 4.8% today after it announced today that the randomised controlled phase 3 trial of remestemcel-L, in patients with moderate to severe acute respiratory distress syndrome (ARDS) due to a COVID-19 infection, has received a recommendation to continue from the independent data safety monitoring board following completion of the trial’s second interim analysis.

Mesoblast chief medical officer Dr Fred Grossman said: “We are pleased with the recommendation by the DSMB, as we seek to confirm whether remestemcel-L improves survival in ventilated COVID-19 patients with moderate to severe ARDS. Patients who have co-morbidities or are older are likely to continue to be at high risk of ARDS and death, even if COVID-19 vaccines become available. This is why having a potential treatment that reduces mortality in these patients is so important.”

Other big share price movements

There were some big movements in the ASX not related to oil. The Virgin Money UK CDI (ASX: VUK) share price went up 14.3% and the Xero Limited (ASX: XRO) share price went up 6.7%.

Straker Translations Ltd (ASX: STG) saw its share price soar 76% after announcing an important deal with IBM. Straker has been picked as a strategic translation service provider on for a two-year agreement.

More reading

• Why the Virgin Money (ASX:VUK) share price surged 15% today
• Latest ASX stocks to be hit by a broker downgrade
• Why the Xero (ASX:XRO) share price jumped 13% to a record high today
• The irresistible urge that costs retail investors 3% a year
• Commonwealth Bank (ASX:CBA) share price higher on Q1 and loan deferral update

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has recommended Straker Translations. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Suncorp Group Ltd (ASX: SUN) share price was on form on Wednesday and charged notably higher.

The insurance and banking giant’s shares rose almost 4% to $9.50.

Can the Suncorp share price go higher from here?

According to one leading broker, there could be plenty more upside for the Suncorp share price over the next 12 months.

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $10.86 price target on the company’s shares following its quarterly update.

This price target implies potential upside of 14% excluding dividends, even after factoring in today’s solid gain.

What did the broker say?

Goldman has been looking through Suncorp’s first quarter banking update and notes that its home lending lodgement and settlement rates have increased as a result of improved processes for the broker channel.

However, this was more than offset by higher levels of customer repayments and refinancing as a result of increased competition across the industry. As a result, its mortgage growth was down 1% quarter on quarter and tracking slightly below Goldman’s half year forecast of -0.5%.

Positively, though, the broker points out that its net interest margin (NIM) has held up much better than regional peers that are experiencing stronger volume growth. It also appears confident this will remain the case throughout the first half.

Another positive was its business volumes. They were up 1.7% on the prior corresponding period thanks largely to Agribusiness growth of 3.7%.

But perhaps the biggest positive of all was its asset quality, which the broker was pleasantly surprised by.

It commented: “Asset quality trends are tracking much better than anticipated, with SUN’s c.A$3m bad debt charge for the quarter trending well below the A$56m we have forecast for 1H21E. With deferral metrics remaining encouraging alongside a broader re-opening of key state economies, asset quality is on track to be a source of upside risk to consensus for FY21E.”

In light of this, it appears comfortable with its buy rating and $10.86 price target at this stage.

More reading

• Why the AMP (ASX:AMP) share price could be set to rocket higher today
• These could be the next ASX stocks to unlock value by selling assets
• The Suncorp (ASX:SUN) share price is slightly lower on day of AGM
• Invest your Suncorp dividends in these ASX shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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