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The prospect of a second stock market crash over the coming months may cause some investors to become worried about their financial prospects. That’s understandable, since this year’s market decline prompted severe falls in the share prices of many companies.

However, a market decline can also prove to be a rare buying opportunity. Certainly, it causes short-term paper losses. However, low stock prices can deliver recoveries that produce high capital returns for your portfolio.

Therefore, rather than worrying about a potential market downturn, viewing it as an opportunity to lock-in cheap share prices could be a more profitable move.

A rare opportunity

This year’s stock market crash was a relatively rare event. The last market downturn of a similar size and scale occurred over a decade ago when the global financial crisis was in full flow. Prior to that, there have been relatively few similar occurrences, with notable bear markets including the dot com bubble in the early 2000s.

Certainly, there have been many market corrections and periods of high volatility throughout the stock market’s history. However, occasions where investors are selling equities en masse to pile into less risky assets due to panic and fear being prevalent are fairly uncommon. Therefore, opportunities to buy high-quality companies at rock-bottom prices are worth grasping for any investor who can look beyond the next few months and instead focus on recovery prospects over the coming years.

Recovering from a stock market crash

The track record of indexes such as the FTSE 100 Index (INDEXFTSE: UKX) and S&P 500 Index (INDEXSP: .INX) suggests that buying shares after a stock market crash is a sound move. After all, equity markets have always delivered recoveries following their declines. Sometimes this process has taken a matter of months. In other cases, it has taken years for the stock market to return to previous highs.

Investors can improve their prospects of taking part in a stock market recovery by focusing on high-quality businesses. For example, those companies with low debt and a competitive advantage may be better able to survive weak operating conditions in the short run. They may also be better placed to benefit from an economic recovery. This may lead to higher profits and a rising share price that positively impacts on your portfolio.

Making a million

Investing in a diverse range of shares after a stock market crash may increase your return prospects. This may enable you to beat the market’s average return over the long run.

Even assuming you match the 8% annual total return that indexes such as the FTSE 100 have delivered could lead to a portfolio valued in excess of a million. For example, investing $100,000 today at an 8% return would produce a seven-figure portfolio within 30 years. Similarly, a $750 monthly investment would lead to a $1m portfolio over the same timeframe.

However, you could obtain a greater return by purchasing high-quality shares at low prices after a stock market crash. This could reduce the amount of time it takes to obtain a portfolio valued at seven figures.

More reading

• Are gold and bitcoin both ‘safe havens’?
• Is the Webjet (ASX:WEB) share price a buy today?
• Is the Qantas (ASX:QAN) share price flying closer to recovery?
• 10 fantastic ASX shares to buy in December
• 4 great ASX growth shares to buy

Motley Fool contributor Peter Stephens 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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Gold has always been an asset class that investors have flocked to in times of turmoil. Despite its ‘unproductive’ nature (gold is just a shiny metal at the end of the day), investors throughout history have always been attracted to gold as an investment.

It is widely believed to be a good hedge against inflation for one. Investors enjoy gold’s scarcity and its past as a monetary base (the gold standard) for another, as well as the fact it has a globally consistent intrinsic value.

But in recent years, gold has had a growing rival: bitcoin. On the surface, you might not think that a metal and a digital cryptocurrency have too much in common. Indeed, bitcoin was dismissed by many (including investing legends like Warren Buffett) as being worthless when the bitcoin price collapsed after a bubble-like rally in late 2017.

But is being turned on its head in 2020. It’s worth noting that bitcoin did not have a great start to the year. It collapsed more than 50% in value during the sharemarket crash in March, going from more than US$10,000 a coin in mid-February to under US$5,000 by late March.

Fast forward to today, and bitcoin is trading for more than US$17,000 a coin at the time of writing. Earlier this week, it hit more than US$19,000, the first time it has done so in 3 years. That peak puts it up more than 140% year to date.

Gold vs. bitcoin

According to reporting in the Australian Financial Review (AFR) this week, the factors fuelling demand for bitcoin and cryptocurrencies have been “demand for risk-on assets amid unprecedented fiscal and monetary stimulus, hunger for assets perceived as resistant to inflation, and expectations that cryptocurrencies would win mainstream acceptance”.

On the latter point, the AFR also notes that:

The bitcoin market now boasts a functioning derivatives market and custody services by established financial institutions. Large firms including Fidelity Investments and Japan’s Nomura Holdings have started safeguarding bitcoins and other cryptocurrencies for institutional investors.

Does all this sound familiar? Well, it should, because those are the kinds of reasons that investors buy gold, as we discussed earlier. So are gold and bitcoin two halves of the same, er, coin?

Well, although the two assets have a similar appeal (scarcity, an absence of government control, inflation hedging properties), they aren’t exactly correlated in an absolute sense. A case in point: over the past month, bitcoin has risen approximately 24% in value. Over the same month, gold has fallen roughly 4.6% from US$1,900 an ounce to US$1,812.

It appears a ‘safe haven’ means different things to different investors after all.

More reading

• These were the worst performing ASX 200 shares last week
• These were the best performing ASX 200 shares last week
• Are near-zero interest rates the reason the ASX 200 is surging in 2020?
• Why this ASX cybersecurity ETF is a buy today
• ASX 200 drops on Friday

Motley Fool contributor Sebastian Bowen 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 Webjet Limited (ASX: WEB) share price has risen by 63% since the start of November 2020.

What has been going on?

COVID-19 impacts have significantly disrupted Webjet during 2020. Its FY20 result was a story of two polar opposite halves. Webjet reported that its FY20 underlying operations, which excludes a number of one-offs, showed total $3 billion of total transaction value (TTV) with $2.3 billion of that coming in the first half. Total FY20 revenue was $266.1 million, with $217.8 million of that generated in the first half. FY20 underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was $26.4 million, but it made a $59.9 million EBITDA loss in the second half and generated $86.3 million of EBITDA in the first half.

The FY20 statutory result included a number of one-off items totalling $117.7 million, of which $78 million were in the second half. These include $40 million of debtors write-off, $14.6 million associated with the closure of Webjet Exclusives and $20 million of impairment of intangibles from the closure of Online Republic Cruise.

However, Webjet has implemented a number of measures to ensure its survival and prepare for the recovery of global travel. It reduced costs by around 50%, it strengthened its balance sheet with a $346 million capital raising and carried out a $163 million notes issue. Webjet has been working on some strategic initiatives to maximise its performance when markets reopen.

Why has the Webjet share price been rising?

Webjet shares started rising on 3 November 2020, which was just after the US election when it appeared that Joe Biden was likely to be the winner (but without winning the Senate).

There has been a number of COVID-19 vaccine announcements in recent weeks. Moderna’s COVID-19 vaccine is reported to be around 95% effective. The BioNTech-Pfizer vaccine data also suggested an effective rate of over 90%. The Webjet share price has risen around 33% since news broke of the effectiveness of the BioNTech vaccine, which was the first one announced.

The Oxford University-AstraZeneca vaccine offers protection of at least 70% and perhaps up to 90% with a different dosage.

Webjet held its AGM a few weeks ago, before the US election and vaccine news.

It said that it expects people will resume their travel patterns as soon as conditions permit. Webjet sees considerable pent-up demand building for the travel services and products that it sells, particularly in the leisure market. Webjet believes the recovery will appear first in markets where there are vaccines, or in safe corridors.

The company pointed out that, after some research, over 70% of global travellers say they would travel within three months of restrictions being lifted and 70% said that they expect to have the same or more budget available for their holidays.

How is FY21 going?

Webjet said that its monthly cash burn in the first quarter was less than expected at $9 million per month compared to $10.5 million in FY20. The savings was due to an ongoing review of costs and staff attrition.

The company said that it has identified additional cost savings.

Webjet also said that TTV growth is now delivering positive working capital. WebBeds experienced TTV growth in the first quarter of FY21 compared to the fourth quarter of FY20 and is starting to produce positive working capital ($7 million) and aged debt collections ($6 million).

Webjet’s online travel agency (OTA) is also delivering positive working capital as the domestic leisure market starts to re-open.

The Motley Fool Million Dollar Portfolio currently rates the Webjet share price as a buy. According to Commsec, it’s trading at 22x FY23’s estimated earnings.

More reading

• ASX 200 drops on Friday
• Why the Helloworld (ASX:HLO) share price is sinking lower today
• ASX 200 down 0.35%: Bega Cheese jumps, Flight Centre & Webjet tumble lower
• Why the Webjet (ASX:WEB) share price is soaring 6%
• Why Origin, Qantas, Webjet, & Westpac shares are storming higher

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet 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 Qantas Airways Ltd (ASX: QAN) share price is making a miraculous recovery fuelled by vaccine hopes and reopening borders. The recent strength of airlines is demonstrated by the 30% increase in the US Global Jets ETF in November, which comprises various airline carriers around the world including Qantas. 

Qantas is now within 25% of its previous record all-time high set in December 2019. However, it may feel like the share price has run before its business has made a material recovery. So, what are the current circumstances for the business? And what can investors look forward to in FY21? 

Current border situation 

Australia’s COVID-19 border restrictions have eased again with only South Australia listed as a hotspot for some states. 

Queensland’s border closure with Victoria and Greater Sydney will end on Tuesday, 1 December. It has listed Adelaide as a hotspot, meaning police will conduct intercepts of vehicles to check if people have come from South Australia. 

No permit is required for travellers from any states entering NSW, except for those coming from South Australia. 

The Victoria-NSW border was reopened on 23 November. Victoria’s borders are open to all states, except those travelling from South Australia will need to obtain a border crossing permit.  

Tasmania will relax its border restrictions with Victoria this Friday. The state holds similar restrictions for South Australia. 

WA borders are closed to South Australia. Travellers from NSW and Victoria are also required to complete registration and self-quarantine for 14 days. All other states and territories have been marked as very low risk and no quarantine is required on arrival. 

Everyone travelling to the Northern Territory will have to fill out a border entry form, but quarantine is only required if you’ve spent time in a COVID hotspot. Currently, Melbourne is the only region considered as a hotspot.

Qantas segment performance

The company held its annual general meeting on 18 September, providing the market with updates across its domestic, international, loyalty, freight and liquidity positions. 

Its recovery was delayed due to the unexpected closure of several domestic borders in July. It expected group domestic flights to be operating at about 60 per cent pre-COVID levels. Instead, the continued border closures mean capacity is now below 30 per cent. This delay will result in a $100 million negative impact on earnings for the first quarter of FY21, and will have an impact on Q2 as well. The company addresses this challenge as a “timing issue”, knowing that the “upswing will materialise – just later than planned”. 

The company knows that latent travel demand is strong. This has been demonstrated when it experimented with a “scenic flight” earlier this month, which sold out in 10 minutes. When South Australia opened to New South Wales, 20,000 seats were sold across Qantas and Jetstar in just 36 hours. 

Qantas also sees that its domestic market share is likely to increase organically from around 60 per cent to around 70 per cent, as its competitors change strategy. 

More reading

• Why the Webjet (ASX:WEB) share price is soaring 6%
• Why Origin, Qantas, Webjet, & Westpac shares are storming higher
• Qantas (ASX:QAN) adds 360 flights a week
• Why fund manager optimism is at almost 3-year highs
• Why Brickworks, Mesoblast, Qantas, & Telix shares are storming higher

Motley Fool contributor Lina Lim 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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With a new month upon us, what better time to see if your portfolio could do with some new additions.

Below are 10 quality ASX shares which have been tipped as buys. Here’s why they could be worth a closer look:

a2 Milk Company Ltd (ASX: A2M)

A2 Milk Company is one of the region’s leading infant formula and fresh milk companies. It has been growing at a very strong rate over the last few years. And while FY 2021 is going to be a very tough year due to the pandemic, analysts at Macquarie expects its growth to resume in FY 2022. It has an outperform rating and $17.95 price target on its shares.

Altium Limited (ASX: ALU)

Altium is an award-winning printed circuit board (PCB) design software provider. Over the last few years it has carved out a leading position in this growing market. It is now aiming to take things to the next level and dominate the market with its cloud-based Altium 365 product. One broker that likes what it sees here is Credit Suisse. Last week it initiated coverage on Altium with an outperform rating and $42.00 price target.

Appen Ltd (ASX: APX)

Appen is a leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). Its team of over a million contractors prepare or create the data for the machine learning models of some of the largest tech companies. This includes Facebook and Microsoft to name just two. Analysts at Morgan Stanley have an overweight rating and $40.00 price target on its shares. The broker has confidence in the company’s long term growth potential.

Aristocrat Leisure Limited (ASX: ALL)

Aristocrat Leisure is one of the world’s leading gaming technology companies. While 2020 has been a difficult year for its poker machine business, its digital business has flourished and delivered strong growth. Analysts at Citi believe it will bounce back in FY 2021. After which, they feel it is well-placed for growth over the medium term. As a result. they have recently retained their buy rating and lifted the price target on its shares to $40.60.

CSL Limited (ASX: CSL)

CSL is one of the world’s leading biotechnology companies. It is comprised of the CSL Behring business and the Seqirus business. CSL Behring is the global number one player in a plasma therapies industry worth a massive US$30 billion per year. Whereas Seqirus is now the number two player in the US$6 billion global influenza vaccines industry. Analysts at UBS looked over its research and development pipeline recently and appear to have been impressed. They put a buy rating and $346.00 price target on its shares. Its analysts note that product development has been a key driver of growth and appear confident this trend will continue in the future.

Nanosonics Ltd (ASX: NAN)

Nanosonics is the infection control specialist behind the industry-leading trophon EPR disinfection system for ultrasound probes. This system has been growing its footprint at a strong rate over the last few years. This is great for two reasons. One is unit sales, the other is the recurring revenue it generates from the consumables the system requires. Earlier this month analysts at UBS retained their buy rating and $7.20 price target on its shares. The broker believes Nanosonics is an example of a high-quality structural growth story, particularly in a post-COVID world.

NEXTDC Ltd (ASX: NXT)

NEXTDC is a leading data centre operator which has been delivering strong revenue and earnings growth in recent years thanks to increasing demand for capacity in its centres. This has been driven by the structural shift to the cloud, which has accelerated during the pandemic. Goldman Sachs is very positive on its outlook and recently reiterated its buy rating and $13.20 price target. It even suggested the NEXTDC share price could go to $20.00 based on high but not unrealistic assumptions.

Pushpay Holdings Group Ltd (ASX: PPH)

Pushpay is a fast-growing donor management and community engagement platform provider for the faith sector. It has been a very strong performer this year and recently reported a 53% increase in half year operating revenue to US$85.6 million. Even if you annualise this revenue to US$171.2 million, it is still well short of management’s long term revenue target of US$1 billion. Analysts at Goldman Sachs are bullish on its growth prospects. They have a conviction buy rating and $10.35 price target on its shares.

REA Group Limited (ASX: REA)

REA Group is the dominant player in real estate listings in the Australian market. Although times have been hard for the company because of the pandemic, its excellent costs control has limited the damage. Pleasingly, with the housing market tipped to bounce back, it looks well-placed to benefit from a return to listings growth next year. In addition to this, price increase and flat costs are likely to support its growth. That’s the view of Morgan Stanley, which has an overweight rating and $150.00 price target on its shares.

ResMed Inc. (ASX: RMD)

ResMed is a medical device company with a focus on the sleep treatment market. It has been growing at a consistently strong rate over the last decade thanks to its industry-leading products and sizeable market opportunity. The good news is that its market opportunity is still growing. Management estimates that there are ~1 billion people suffering from sleep apnoea worldwide and only ~20% of these sufferers have been diagnosed. Following the release of its first quarter update last month, analysts at Morgans retained their add rating and lifted their price target to $30.99.

More reading

• 4 great ASX growth shares to buy
• Brokers name 3 ASX shares to buy right now
• What happened to the NextDC (ASX:NXT) share price in November?
• 2 ASX 50 shares to buy today
• ASX 200 expected to drop lower amid COVID-19 vaccine concerns

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd, CSL Ltd., Nanosonics Limited, and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended Nanosonics Limited, PUSHPAY FPO NZX, REA Group Limited, and ResMed Inc. 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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There are four ASX growth shares that are rated as buys by one of the Motley Fool investment services.

Here are those picks:

Betashares Nasdaq 100 ETF (ASX: NDQ)

This exchange-traded fund (ETF) gives exposure to some of the biggest businesses in the US which are growing at a fast rate.

Its top holdings include businesses like Microsoft, Amazon, Apple, Alphabet, Facebook, Tesla, Nvidia and PayPal.

It has an annual management fee of 0.48% per annum. Its net returns over previous years has materially more than the ASX. At the end of October 2020, it had generated a net return of 34.5% over the previous 12 months, over the past three years its net return per annum has been 25% and since inception in May 2015 the net return has been 20.8% per annum.

BetaShares said that one of the reasons to consider this ETF is that with its strong focus on technology, the ETF provides diversified exposure to a high-growth potential sector that is under-represented in the Australian share market.

This ETF is currently rated as a buy by the Motley Fool Share Advisor investor service.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an electronic donation business that helps churches in the US to receive donations.

The ASX growth share has seen an increased adoption of its digital services during the year from COVID-19 effects.

The company’s new product called ChurchStaq, which combines the functionality of both Pushpay and its acquisition called Church Community Builder, is proving popular with churches according to the company.

Pushpay recently increased its FY21 guidance again for earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to be between US$54 million to US$58 million. The company recently reported in its FY21 interim result that EBITDAF jumped 177% to US$26.7 million.

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

BWX Ltd (ASX: BWX)

BWX is a natural beauty business with a variety of brands including Sukin, Mineral Fusion, Andalou Naturals and Nourished Life.

The BWX share price has drifted lower since the end of August, it’s down 20%.

BWX recently announced a partnership with THG to help it grow in Europe. It’s aiming for European revenue of $30 million to $50 million by the end of FY23.

The ASX growth share is building a new manufacturing hub in Melbourne to support the next phase of growth which should help profit margins increase further.

In FY21 BWX expects to achieve revenue and EBITDA growth of at least 10%.

It’s currently rated as a buy by the Motley Fool Million Dollar Portfolio investor service.

Kogan.com Ltd (ASX: KGN)

Kogan.com is an e-commerce platform business that sells a wide variety of products like TVs, phones, appliances, furniture, clothes and food. It also offers a number of other services like internet, mobile, insurance and superannuation.

The Kogan.com share price has fallen by 32% since 9 November 2020.

The ASX growth share recently told investors at in its AGM update that between July and October 2020, gross sales had increased by 99.8%, gross profit had gone up 131.7% and adjusted EBITDA had risen by 268.8%.

Kogan.com has been investing in its marketing to build its customer base and brand which it expects will have long term benefits for the company.

Founder of Kogan, Ruslan Kogan, recently commented on the benefit to the company of its growing number of people using its loyalty scheme: “The Kogan First community of members grew exceptionally during the second half, and importantly these loyal members on average purchase and save much more often than non-members, demonstrating loyalty to the platform, and also demonstrating the significant savings and other benefits available through the loyalty program.”

The Motley Fool Share Advisor service currently rates the Kogan.com share price as a buy.

More reading

• 10 fantastic ASX shares to buy in December
• 2 ETFs that are very popular with ASX investors
• 2 ASX shares delivering explosive growth in FY 2021
• ASX 200 falls on Thursday
• 2 leading ASX growth shares to buy that are falling

The post 4 great ASX growth shares to buy appeared first on Motley Fool Australia.

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Fortunately for income investors in this low interest rate environment, there are a large number of dividend shares on the Australian share market.

Two ASX dividend shares with yields of 4% or greater are listed below. Here’s what you need to know about them:

National Storage REIT (ASX: NSR)

National Storage is one of the ANZ region’s leading self-storage operators. It tailors self-storage solutions to residential and commercial customers at over 190 storage centres across Australia and New Zealand.

While this sounds like a large number, the company isn’t finished with its growth through acquisition strategy. Since the end of FY 2020, the company has completed eight acquisitions totalling $139 million. In addition to this, management advised that its forward-looking acquisition pipeline remains strong and it is also working hard to complete a number of development projects.

At its recent annual general meeting, management reiterated that it expects to report underlying earnings per share of 7.7 cents to 8.3 cents in FY 2021. It also advised that it plans to pay out 90% to 100% of its earnings to shareholders as distributions. Based on the middle of both guidance ranges (8 cents and a 95% payout ratio), this work out to be a 7.6 cents per share distribution. With the National Storage share price currently fetching $1.90, this equates to a 4% yield.

Rural Funds Group (ASX: RFF)

Another company that expects to reward shareholders with a generous dividend in FY 2021 is Rural Funds. It is a real estate investment trust (REIT) which owns a diversified portfolio of high quality Australian agricultural assets.

The majority of these assets are leased to experienced agricultural operators. This includes almond producer Select Harvests Limited (ASX: SHV wine giant Treasury Wine Estates Ltd (ASX: TWE). The company also boasts a lengthy weighted average lease expiry of 10.9 years.

In FY 2021 the company intends to grow its distribution by its 4% per annum target growth rate. This will mean a distribution of 11.28 cents per share. Which, based on the current Rural Funds share price, works out to be a 4.3% yield.

More reading

• ASX 200 drops on Friday
• Treasury Wine (ASX:TWE) share price crashes 11% lower on China tariff news
• Why Beach, Bravura, Flight Centre, & Treasury Wine shares are dropping lower
• Should you take a bite of these tasty ASX shares?
• 2 top ASX dividend shares with yields greater than 4%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates 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) was on form again last week and continued its remarkable rise. The benchmark index rose 1% over the five days to 6,601.1 points.

Unfortunately, not all shares on the index climbed higher with the market. Here’s why these were the worst performers on the ASX 200 last week:

Virgin Money UK CDI (ASX: VUK)

The Virgin Money UK share price was the worst performer on the ASX 200 last week with a 12.6% decline. Investors were selling the UK bank’s shares following the release of its full year results. For the 12 months ended 30 September, Virgin Money UK posted a 77% decline in full year underlying net profit to 124 million pounds. This was driven largely by a material increase in impairments to 501 million pounds. Excluding impairments, operating profit fell 10% to 625 million pounds due to weakening margins and base rate cuts.

Megaport Ltd (ASX: MP1)

The Megaport share price was out of form and dropped 9.7% last week. The elastic interconnection services provider’s shares appear to have been caught up in the rotation from COVID winners to value options. Despite this decline, the Megaport share price is up an impressive 30% over the last 12 months. This has been driven by strong recurring revenue growth thanks to increasing demand for its service because of the cloud computing boom.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price continued its poor run and dropped a further 8.4% over the five days. This means the gold miner’s shares are now down 18.6% over the last 30 days. Investors were selling the company’s shares last week after positive COVID-19 vaccine news continued to weigh on the gold price. For the same reason, the Saracen Mineral Holdings Limited (ASX: SAR) share price dropped 8.1%.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price wasn’t far behind with a decline of 6.8%. Last week this healthcare technology company held its annual general meeting. Although management spoke positively about its outlook, it did warn that its growth would be predominantly generated in the second half. This appears to have spooked some investors.

More reading

• These were the best performing ASX 200 shares last week
• Are near-zero interest rates the reason the ASX 200 is surging in 2020?
• Why this ASX cybersecurity ETF is a buy today
• ASX 200 drops on Friday
• Is it too late to buy the surging Bega (ASX:BGA) share price?

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 MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended 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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Although it had a soft finish to the week, the S&P/ASX 200 Index (ASX: XJO) continued its positive run and recorded another solid weekly gain. The benchmark index rose 1% over the five days to 6,601.1 points.

While a good number of shares climbed higher, some recorded stronger than average gains. Here’s why these ASX 200 shares were on fire last week:

Platinum Asset Management Ltd (ASX: PTM)

The Platinum share price was the best performer on the ASX 200 last week with a gain of 14.8%. This was despite there being no news out of the fund manager. However, on the Friday before, Platinum held its annual general meeting and spoke positively about the future. Management said: “It is encouraging to note that Platinum’s early positioning in COVID recovery cyclical stocks has begun to be rewarded in recent weeks as equity markets start to digest the future implications of a vaccine led economic recovery in more cyclical stocks.”

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven share price wasn’t far behind with a gain of 14% last week. This may be down to optimism that Chinese steel makers will begin buying Australian coal again next year. A recent note out of Goldman Sachs reveals that its analysts believe Chinese steel makers will begin buying Australian coal again in January/February. It notes that the China steel industry still requires high quality Australian met coals for blending in 2021. Last week it was also revealed that China was paying over the odds for coal from North America.

Pendal Group Ltd (ASX: PDL)

The Pendal share price was a strong performer and jumped 13.5% over the five days. Last week this fund manager announced that it would be taking the unconventional step of investing into Bitcoin. The head of bond, income, and defensive strategies, Vimal Gor, is becoming increasingly bullish on cryptocurrencies and Bitcoin in particular.

Mesoblast limited (ASX: MSB)

The Mesoblast share price continued its positive run and jumped 11.8% higher last week. This stretched its monthly gain to a sizeable 31.3%. Investors have been fighting to get hold of the biotechnology company’s shares since it announced a potentially lucrative deal with global pharmaceutical giant Novartis. The deal could see Mesoblast earn upwards of US$1.25 billion from milestone payments.

More reading

• These were the worst performing ASX 200 shares last week
• Are near-zero interest rates the reason the ASX 200 is surging in 2020?
• Why this ASX cybersecurity ETF is a buy today
• ASX 200 drops on Friday
• Is it too late to buy the surging Bega (ASX:BGA) share price?

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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As we all know, the coronavirus pandemic has defined 2020. The global economy, chugging along just fine before the pandemic struck, has been hobbled like we haven’t seen in many of our lifetimes. Entire industries like airlines, travel, cruises, and tourism have more-or-less shut down at various points this year (an unthinkable occurrence in 2019).

Governments have borrowed and spent an unprecedented level of money, resulting in unparalleled levels of debt and deficits across the world. And while there’s been recent news of an array of potentially viable and successful vaccine candidates, we are all still living and working around this virus, some countries more than others. Either way, this is not exactly a recipe for a high share market.

Yet that is not what has eventuated. November is on track to see the ASX have one of its best months in years.

The S&P/ASX 200 Index (ASX: XJO) is up around 11.5% since the start of the month (remember, the ASX 200 normally returns an average far below that number every year).

Over in the United States, the party is even wilder. The flagship US index, the Dow Jones Industrial Average crossed the 30,000 point threshold for the first time in history earlier this week. And that’s despite a far more dire situation with the virus over there than what we are lucky enough to be experiencing in Australia.

Low interest rates = high share prices

So how does one explain this situation?

Well, reporting from the Australian Financial Review (AFR) yesterday espouses a theory. The AFR interviewed Andrew McAuley, the chief investment officer at Credit Suisse’s private banking arm in Australia. McAuley reckons the ASX 200 is on a historically high forward earnings multiple of 18 (20% higher than the 10-year average), and the MSCI World Index at 21.2x (40% higher than average). This, Mr. McAuley says, is all to do with low interest rates.

McAuley states that low interest rates “are helping to put something of a floor under the Australian sharemarket, and its other counterparts around the world”.

He also notes that the quantitative easing (QE) programs the Reserve Bank of Australia (RBA) and other central banks are undertaking are accentuating this situation.

The AFR also quoted Dan Farmer, chief investment officer at IOOF Holdings Ltd (ASX: IFL), who agrees:

Ultra-low rates are fuelling market confidence that we will see a healthy recovery in economic conditions and company earnings post-COVID…We are seeing investors moving up the risk spectrum into shares, which generally attract higher returns, although with greater risk.

The RBA recently cut rates in Australia to another record low of just 0.1%, which it implied will be where rates will stay for at least a few years. If Mr. McAuley and Mr. Farmer are correct, and low rates do stick around, we could see another few years of higher ASX shares yet.

More reading

• Why this ASX cybersecurity ETF is a buy today
• ASX 200 drops on Friday
• Is it too late to buy the surging Bega (ASX:BGA) share price?
• Can these fund managers drive the Coca-Cola Amatil (ASX:CCL) share price 10% higher?
• ASX 200 down 0.35%: Bega Cheese jumps, Flight Centre & Webjet tumble lower

Motley Fool contributor Sebastian Bowen 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.

The post Are near-zero interest rates the reason the ASX 200 is surging in 2020? appeared first on Motley Fool Australia.

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