The big four banks have all tumbled lower today after they followed the lead of their U.S. counterparts.

The worst performer in the group has been the Westpac Banking Corp (ASX: WBC) share price.

The shares of Australia’s oldest bank were down as much as 6% at one stage. They have since recovered somewhat, but are still down almost 4% to $17.80 at the time of writing.

Why is the Westpac share price sinking lower?

As well as getting caught up in a selloff which has been triggered by concerns over a potential second wave of COVID-19 in the United States, an update by Westpac could be adding to the selling pressure.

Earlier today, Westpac provided an update on its dealings with AUSTRAC. This is in relation to the civil proceedings the agency launched against the bank in November. This was for the alleged contraventions of its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act.

According to the release, Westpac has continued to review its processes and as part of that has disclosed to AUSTRAC issues regarding its obligation to file threshold transaction reports.

In addition to this, a month after the civil proceedings were launched, as part of Westpac’s lookback announced in its response to AUSTRAC’s claim, Westpac reported additional suspicious matter reports (SMRs) in relation to potential child exploitation.

This morning the bank revealed that AUSTRAC is further investigating these matters and has advised that it may amend its statement of claim to include allegations arising from these investigations.

AUSTRAC has requested further information from the bank on these matters. This includes the details of 272 of its customers, many of whom were subject to SMRs previously.

A further case management hearing is scheduled for next week. Management intends to provide further updates on the matter when appropriate.

More reading

• ASX 200 down 2.2%: Westpac tumbles, TPG reveals special dividend plans
• Why Jumbo, Santos, Westpac, & Zip Co shares are crashing lower
• ASX 200: improved consumer sentiment to near pre COVID-19 levels
• ASX 200 drops 3%, Webjet share price sinks
• What today’s ASX 200 selloff tells me

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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The Mach7 Technologies Ltd (ASX: M7T) share price is one of the few shining lights on the market today as investors react to an acquisition.

Mach7 is a global provider of enterprise image management systems for the healthcare sector. The company’s solutions are designed to accelerate diagnosis and care delivery, reduce costs, and significantly improve patient outcomes.

Mach7 shares have been stuck in a trading halt since Wednesday while the company completed a capital raising to fund a new acquisition.

And it appears investors are viewing these moves favourably seeing as though Mach7 is one of the only ASX growth shares not being heavily punished today. In fact, at the time of writing, Mach7 shares are actually charging 7.60% higher.

Why has the Mach7 share price avoided today’s sell-off?

This morning, Mach7 announced it has completed the institutional component of its capital raising. This comprised a $3.7 million placement and $19.7 million entitlement offer, raising a total of $23.4 million. These funds were raised at an offer price of 68 cents per share, which was a 13.9% discount to Mach7’s last trading price of 79 cents.

Funds raised from the capital raising, together with the company’s existing cash reserves, will be used to fund the acquisition of Client Outlook.

Client Outlook is a leading provider of an enterprise image viewing technology called eUnity. It has around 100 customers across North America and Asia and generated $8.8 million of revenue in FY20.

Following the completion of the acquisition, Mach7 will be a complete front and back-end enterprise imaging solution provider. The acquisition also provides the company with a departmental clinical diagnostics PACS (picture archive communication system) solution offering – expanding Mach7’s addressable market from US$0.75 billion to US$2.75 billion.

Highlighting further benefits, Mach7 stated that the acquisition will increase the company’s sales pipeline by around 50%, with $40 million of contracted revenue opportunities in the near term. 

What’s more, Mach7’s customer install base will increase by around 200% from 51 to approximately 150 customers. Contracted annual recurring revenue also stands to benefit, increasing by 70% to $14.75 million.

Mach7 believes this is a low-risk acquisition since the two companies have an established partnership, reselling each other’s product. As such, Client Outlook is a well-known entity, team and product to Mach7 and deep technology integration has already been completed.

The purchase price has been set at CA$38.5 million (~A$40.8 million). Mach7 will have approximately $15 million cash reserves post acquisition, which is expected to be completed by 10 July 2020.

“This deal is truly transformational for Mach7 and its shareholders,” said Mike Lampron, CEO of Mach7. 

“This offering is extremely compelling, but the enterprise-first philosophy of Mach7 and Client Outlook is truly what I believe is going to set us apart as we move forward together,” Mr Lampron added.

More reading

• Why Mach7, Meridian, Spark, & TPG Telecom are pushing higher

Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MACH7 FPO. 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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Shouldn’t we all just buy ASX tech shares from now on?

Tech shares of all stripes have done remarkably well since the S&P/ASX 200 Index (ASX: XJO) market bottom – but it’s easy to forget just how well.

Since 23 March, the ASX 200 has risen approximately 28% (even after today’s falls). But since the same date, the S&P/ASX All Technology Index (ASX: XTX) is up nearly 70%.

Just look at shares like Afterpay Ltd (ASX: APT). Its shares have been truly phenomenal to watch over the past 2 months. After bottoming out at $8.90 on 23 March, Afterpay shares were at an all-time high this week, hitting $54.85 at one point. That’s a return of more than 500% – sensational stuff!

It’s a similar story over in the United States for tech shares. Since 23 March (also the US market bottom), the Dow Jones Industrial Average has risen roughly 35%. But if you look at US tech shares like Apple (up nearly 50% since 23 March), Mastercard (up 43%), and Facebook (up nearly 52%), we can see a similar story playing out.

So should we just give up on the blue chips of the world in favour of ASX tech shares? By blue chips, I’m referring to the likes of Commonwealth Bank of Australia (ASX: CBA), Woolworths Group Ltd (ASX: WOW) and Telstra Corporation Ltd (ASX: TLS). 

A bull case for ASX tech shares

Well, I think to ignore tech shares is to do so at our own peril. These are the companies that are shaping the future of business in my view. Thus, I think it’s imperative to at least consider some tech shares like Afterpay, or maybe Altium Limited (ASX: ALU) or NextDC Ltd (ASX: NXT) for one’s portfolio. If you’re aiming to build your wealth through ASX shares, you’ll want to find at least some companies that are growing quickly – and there’s nowhere better to find such companies than in the tech space, in my view.

If you’re not confident investing in individual ASX tech shares, you can always look at exchange-traded funds (ETFs) instead. The Betashares Nasdaq 100 ETF (ASX: NDQ) is a great place to start. You can also have a look at the aptly tickered ETFS Morningstar Global Technology ETF (ASX: TECH).

In saying this, I also think it’s a mistake to tar all ASX tech shares with the same brush. Like any other sector, there will be winners and losers. For every Afterpay, there’s another tech company with a ‘brilliant idea’ that won’t make it off the starter’s block.

Furthermore, investors shouldn’t forget that having a diversified portfolio is always important. And only investing in tech isn’t diversified at all. The tech sector isn’t immune from the vicissitudes of life and faces some unique risks that merit the same level of balanced diversification as any other sector in your portfolio.

More reading

• Keep a watch on these 3 ASX trends next week
• ASX 200 down 2.2%: Westpac tumbles, TPG reveals special dividend plans
• Estia Health share price tumbles after being cut from the ASX 200
• ASX 200: improved consumer sentiment to near pre COVID-19 levels
• 3 ASX 200 shares to buy and hold for decades

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Facebook, Mastercard, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook and Mastercard. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, Altium, and ETFS Morningstar Global Technology ETF. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS and Telstra Limited. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended Facebook and Mastercard. 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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As the market pulls back from recent highs I expect these 3 ASX trends to feature prominently next week. 

Index rebalancing

S&P Dow Jones Indices has announced its quarterly Australian rebalancing. This cyclical ASX trend will bring several new Australian companies to prominence with foreign investors. In addition, dropping others at the same time. This provided a window for Seven Group Holdings Ltd (ASX: SVW) to take a significant stake in Boral Limited (ASX: BLD) last week. 

Some of the more interesting changes are that mid-cap defence manufacturer, Electro Optic Systems Hldg Ltd (ASX: EOS) has been included into the S&P/ASX 300 (INDEXASX: XKO) and the S&P/ASX All Australian 200 (INDEXASX: XAT).

Also, lithium miner, Pilbara Minerals Ltd (ASX: PLS) has been removed from the S&P/ASX 200 (INDEXASX: XJO). I think this marks a return to sanity amongst lithium investors.

The gold boom never stopped

In a typical ASX trend over the past two days, investors are rushing back into gold shares.

Yesterday the 4 largest advances among large-cap shares were Northern Star Resources Ltd (ASX: NST), Newcrest Mining Limited (ASX: NCM), Saracen Mineral Holdings Limited (ASX: SAR) and Evolution Mining Ltd (ASX: EVN) in that order.

From today I expect to see large inflows into gold mining shares again with lower tier. During the last mini-boom, one of the big winners was Gold Road Resources Ltd (ASX: GOR).

The major ASX trend: travel and tourism 

As sentiment turns there is a clear pull back from those companies that stand to benefit from open economies. Air New Zealand Limited (ASX: AIZ) share price has seen consecutive falls by 7% on Wednesday and 9.5% on Thursday.

Likewise Scentre Group (ASX: SCG) in the real estate sector has seen share price falls of 4.4% on Wednesday and 8.1% on Thursday. Furthermore, the market is becoming increasingly sceptical about Australian real estate investment trusts (A-REITs), focussing on those with exposure to shopping centres after the GPT Group (ASX: GPT) announcement of a devaluation in their retail assets. 

Foolish takeaway

The market remains very febrile in the current economic environment. This will provide buying opportunities for those with the patience and nervous disposition to sit through any upcoming volatility.

More reading

• Tech shares! Should we even invest in anything else?
• ASX 200 down 2.2%: Westpac tumbles, TPG reveals special dividend plans
• Estia Health share price tumbles after being cut from the ASX 200
• ASX 200: improved consumer sentiment to near pre COVID-19 levels
• 3 ASX 200 shares to buy and hold for decades

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

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At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) is on course to follow the lead of U.S. markets and record a sizeable decline. The benchmark index is currently down 2.2% to 5,830.5 points.

Here’s what has been happening on the market today:

Westpac AUSTRAC update.

The Westpac Banking Corp (ASX: WBC) share price is trading notably lower again on Friday. As well as being caught up in the market selloff, an AUSTRAC update could also be weighing on its shares. This morning Westpac revealed that AUSTRAC is further investigating matters that were brought to its attention by the bank recently. Westpac commented that the agency has advised that it may amend its statement of claim to include allegations arising from these investigations.

ASX 200 quarterly rebalance

This morning S&P Dow Jones Indices announced the June 2020 quarterly rebalance of the S&P/ASX Indices. The benchmark index will welcome Centuria Industrial REIT (ASX: CIP), Megaport Ltd (ASX: MP1), Mesoblast limited (ASX: MSB), Omni Bridgeway Ltd (ASX: OBL), and Perseus Mining Limited (ASX: PRU) to the illustrious index. Heading to the exits are Estia Health Ltd (ASX: EHE), Hub24 Ltd (ASX: HUB), Jumbo Interactive Ltd (ASX: JIN), Mayne Pharma Group Ltd (ASX: MYX), Pilbara Minerals Ltd (ASX: PLS), and Pinnacle Investment Management Group Ltd (ASX: PNI).

TPG Telecom special dividend.

The TPG Telecom Ltd (ASX: TPM) share price is pushing higher on Friday after providing an update on its special dividend plans. If its merger with Vodafone Australia completes successfully, TPG Telecom plans to pay a fully franked special dividend in the range of 49 cents per share to 52 cents per share.

Best and worst ASX 200 performers.

The best performer on the ASX 200 has been the TPG Telecom share price with a 2% gain. This follows its special dividend update. The worst performer has been the Platinum Asset Management Ltd (ASX: PTM) share price with a massive 12% decline. Investors may be concerned that Platinum’s fund outflows will accelerate again because of the market volatility.

More reading

• Tech shares! Should we even invest in anything else?
• Keep a watch on these 3 ASX trends next week
• Estia Health share price tumbles after being cut from the ASX 200
• Why Jumbo, Santos, Westpac, & Zip Co shares are crashing lower
• Why Mach7, Meridian, Spark, & TPG Telecom are pushing higher

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MEGAPORT FPO. The Motley Fool Australia has recommended Jumbo Interactive Limited and MEGAPORT FPO. 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 Estia Health Ltd (ASX: EHE) share price is tumbling lower today as the ASX responds to bleak trading in the US overnight.

At the time of writing, Estia shares are down 8.39% while the S&P/ASX 200 Index (ASX: XJO) sits 3.10% lower.

Estia Health shares have been included in the benchmark index since March 2015. However, this is set to soon come to an end.

The S&P Dow Jones Indices announced the June 2020 quarterly rebalance of the S&P/ASX Indices this morning. And with a current market capitalisation of just $370 million, it comes as no surprise that Estia didn’t make the cut.

As a result, Estia will cease being part of the benchmark index from the market open on 22 June 2020.

What’s going on with the Estia Health share price?

Estia Health shares were sold-off alongside the rest of the market earlier this year, falling to a 52-week low of 90 cents at the bottom of the March bear market. 

Since then, despite positive investor sentiment driving the market higher, Estia’s rebound has been relatively subdued. Accordingly, the Estia share price is still down more than 40% for the year.

The company’s most recent update was delivered in late May. In the release, Estia shed some light on trading conditions and its financial position.

At the time of the announcement, the aged care provider assured investors that none of its residents had tested positive for COVID-19. However, the company had 3 confirmed cases within its workforce of around 7,500 staff which occurred in March and April.

In terms of operations, occupancy in mature homes fell during the early stages of lockdown restrictions from 93.8% on 17 March to 91.7% on 26 April.

The company attributed the reduction to a number of factors, including the cancellation of travel and elective surgeries, and visitor restrictions.

Nonetheless, Estia Health has been buoyed by government support. At the beginning of May, the government announced a one-off payment to residential aged care providers of either $900 or $1,350 for each resident, depending on the location. As a result, Estia expects the payments to contribute up to $5.2 million of additional revenue in FY20.

Financial position

Looking to the balance sheet, net bank debt at 22 May 2020 stood at $108.5 million. This was an increase of $11.9 million since 31 December 2020. Estia noted that it expects to remain in full compliance with its banking covenants at 30 June 2020 and hasn’t sought covenant relief.

In terms of expenses, the company flagged an increase in staff costs and costs associated with supplying personal protective equipment and other medical supplies. However, as part of its approach to capital management in response to COVID-19, Estia made the move to temporarily defer several refurbishment and development projects.

Prior to this announcement in late May, Estia provided its first COVID-19 update in mid-March and delivered its first-half FY20 results in late-February.

While Estia is exposed to ageing population tailwinds, I believe there are better options out there for income and growth.

More reading

• Tech shares! Should we even invest in anything else?
• Keep a watch on these 3 ASX trends next week
• ASX 200 down 2.2%: Westpac tumbles, TPG reveals special dividend plans
• ASX 200: improved consumer sentiment to near pre COVID-19 levels
• 3 ASX 200 shares to buy and hold for decades

Motley Fool contributor Cathryn Goh 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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The coronavirus pandemic has presented investors with some tremendous investment opportunities. Following its steep decline earlier this year, the S&P/ASX 200 Index (ASX: XJO) has bounced more than 30% from its lows in March. Despite the volatility, quality shares with great, long-term growth potential have come out shining. Here are 2 ASX growth shares that have led the charge and could blossom even further in 2020 and beyond.

Pointsbet Holdings Ltd (ASX: PBH)

The PointsBet share price has bolted an astounding 450% from its lows in mid-March. Yesterday, PointsBet hit a new all time high of of $7.92 before falling back to $6.14 in today’s trade. PointsBet is a corporate bookmaker that offers wagering services for sports and betting products through its cloud-based platform. With local and international sport beginning to resume, investors have acknowledged the boost this will have on the business operations of PointsBet and, subsequently, the growth of the company’s share price.

In a trading update last month, PointsBet highlighted that despite the disruptions of the coronavirus pandemic, the company managed to record ‘net wins’ for both February and March. PointsBet also provided an update on its Australian operations, with the company recording a net win of $18.2 million for the period 1 April to 25 May.

Furthermore, PointsBet elaborated on its agreement to become the exclusive wagering partner for Fox Sports AFL (Fox Footy) for the 2020 season. The agreement highlights PointsBet’s continued approach to targeting media assets to build increased client acquisition and wagering volumes.

Nanosonics Ltd. (ASX: NAN)

The coronavirus pandemic has highlighted the need for better infection prevention and control in medical settings. My second growth share pick, Nanosonics, is a global provider of sterilisation devices to hospitals and healthcare centres. Investors have acknowledged the potential for the company to benefit from the growing demand in this field. This has seen the Nanosonics share price recover more than 50% from its March lows.

Nanosonics boasts a solid revenue model and services a projected 20% of the global market. In addition to generating attractive margins from the sale of its ‘trophon’ devices, Nanosonics also generates recurring revenue from its patented consumable components.

The company released a trading update in early April, informing the market that unaudited sales were significantly up from the prior corresponding period. In addition, Nanosonics also advised that the sale of its consumables were in line with pre-coronavirus expectations.

Should you buy these potential growth shares?

The coronavirus pandemic has put pressure on the earning prospects of many companies on the ASX. As a result, it would be wise for investors to exercise caution and not jump in and attempt to buy growth shares because they ‘look’ cheap. 

However, in my opinion both the PointsBet and Nanosonics share prices have experienced growth because they boast business models capable of withstanding the economic downturn whilst also having great, long-term growth prospects. 

More reading

• 3 great shares to buy now if you’re an ASX 200 investor in your 20s
• Where to invest $500 into ASX shares right now
• The Sezzle and Pointsbet share prices have hit new, all time highs. Time to invest?
• 10 ASX 200 shares that are fit for the Queen
• 3 stellar ASX growth shares I would buy right now

Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Nanosonics Limited and Pointsbet Holdings 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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