Tag: Motley Fool

The Nearmap Ltd (ASX: NEA) share price has failed to follow the market higher today and is dropping lower.

At the time of writing the aerial imagery technology and location data company’s shares are down 1.5% to $2.22.

This means the Nearmap share price is now down 28% since the start of the month.

Why is the Nearmap share price down 28% in September?

As well as coming under pressure from the tech selloff this month, investors have been selling Nearmap’s shares after the launch of a capital raising in the middle of the month.

Nearmap launched a fully underwritten institutional placement to raise $72.1 million and a non-underwritten share purchase plan which is aiming to raise a further $20 million. The institutional placement was completed at a 4.2% discount of $2.77.

While these funds are being raised to support its growth plans, I suspect some investors were caught by surprise by the capital raising. Especially after the company worked so hard to become cash flow positive in FY 2020. This appeared to be an indication that further dilutive capital raisings wouldn’t be necessary.

Should you buy the dip?

One positive from this disappointing share price decline is that it has brought Nearmap’s shares down to an attractive level.

I’m not the only one that thinks this is the case. Earlier this month analysts at Citi put a buy rating and $3.15 price target on the company’s shares. This price target implies potential upside of 42% over the next 12 months.

Citi believes Nearmap’s transition to an insights and analytics provider is a good move and appears confident in its growth trajectory.

Elsewhere, Morgan Stanley is also positive and has an overweight rating and $3.00 price target and Goldman Sachs has a neutral rating and $2.95 price target.

The general consensus, therefore, is upwards from here for the Nearmap share price.

More reading

• New to investing? I would invest $500 into these exciting ASX shares
• Forget BrainChip (ASX:BRN) and buy and hold these outstanding ASX shares
• 5 things to watch on the ASX 200 on Friday
• 3 ASX growth shares I’d buy right now
• Why City Chic, Fortescue, Nearmap, & Zip shares are dropping lower today

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. 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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Recommending ASX shares to a beginner is a tough ask. Whilst I have enormous confidence in the two investments named below, investing is always uncertain. I doubt it, but for all I know, the two shares below could wind up being terrible investments over the next few years, as could any share I could possibly name.

But good investing is all about balancing risk and reward. And not investing at all is both far riskier and less rewarding than giving investing a crack, in my opinion. And so here are the two aforementioned ASX shares that I think have more than a reasonable chance of being great investments over the coming years for a beginner today:

2 ASX shares for a beginner today

BetaShares Nasdaq 100 ETF (ASX: NDQ)

This exchange-traded fund (ETF) is a great choice for a beginner in my view for two reasons. Firstly, as an ETF, this investment requires very little attention or even understanding. It simply holds the 100 largest companies in the United States Nasdaq Index, adjusted as needed. That means this fund will always be holding the 100 largest companies in the index, whatever they may be at any given time. I believe this means that you can buy-and-hold this ETF forever, without ever having to check it or worry about it. That’s great for a beginner.

Secondly, the Nasdaq is the US index that most tech shares find themselves listing on. As such, its current top holdings are well-known tech names like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Amazon.com Inc (NASDAQ: AMZN). But it also houses many up-and-coming growth companies like NVIDIA Corporation (NASDAQ: NVDA), PayPal Holdings Inc (NASDAQ: PYPL) and Tesla Inc (NASDAQ: TSLA). I think these companies will continue to grow over time and increase their weighting in this index. As such, this ETF is really a big bet on US tech, whose future I think is a great investment.

BHP Group Ltd (ASX: BHP)

My second ASX share for beginners is a completely different kettle of fish. BHP is one of the oldest and most famous companies on the ASX. It’s one of the largest mining companies in the world, with significant operations across four core commodities: coal, copper, oil and iron ore. BHP is a very ‘old-world’ company. Even so, I think it’s a great share for a beginner. You’ll often hear from many older Aussie investors that their first share was ‘the BHP’.

Quite simply, BHP has been around so long (and will continue to be in my view) because it mines commodities that the world can’t live without. Almost every building needs steel and almost every electrical device on the planet needs copper. That isn’t going to change in any of our lifetimes, in my opinion. This company won’t make you rich quickly. But it’s another great ‘bottom draw’ investment that I think a new investor could hold for a lifetime.

More reading

• Where to invest your Telstra (ASX:TLS) dividends
• 3 top ASX tech shares to buy in 2020
• BHP (ASX:BHP) share price falls despite new option agreement
• Should ASX investors follow Buffett and bet on oil shares?
• Where to invest your BHP (ASX:BHP) dividends

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Microsoft, NVIDIA, PayPal Holdings, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended Amazon, Apple, BETANASDAQ ETF UNITS, NVIDIA, and PayPal Holdings. 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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Former United States President, John F. Kennedy, I’m told, coined the phrase, “A rising tide lifts all boats.”

The idea is that when a country’s economy is doing well, everyone benefits.

A quick look around the world today reveals very few nations in which the economy is performing well. Even countries like China that is still managing to post GDP growth is growing at a far slower pace than before the pandemic struck.

It was this realisation that panicked investors back in late February. Panic which saw the S&P/ASX 200 Index (ASX: XJO) plummet 36.5% from 20 February through to 23 March.

It was the same story in all the major global indexes. Technology shares proved equally susceptible. Over the same time frame, the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) fell 29.5%.

Then came the first waves of central bank and government stimulus, trillions of dollars’ worth even as interest rates were slashed to rock bottom levels.

And, lo and behold, the rising tide of money lifted all shares.

All shares are not created equal

Well, not all shares lifted. To stretch the analogy, some companies are like leaky hulls, and the tide rose without them.

But the vast majority of shares surged on the flood of easy money.

The ASX 200 gained 35.7% from 23 March to 19 August. It’s down 3.2% since then.

With tech shares shining in the global shift to working, shopping and socialising from home, the Nasdaq’s moves were even more impressive. The Nasdaq gained 75.7% from 23 March through to 2 September. It’s down 11.5% from that all-time high.

Why shares are poised for a fresh run higher

Shares have been slipping over the past weeks largely based on fears that monetary and fiscal stimulus could fade before the virus is under control and companies can again stand on their own free market feet.

To give you some idea of just how sensitive share prices have become to stimulus measures, let’s have another look at the Nasdaq.

Yesterday, overnight Aussie time, the Nasdaq finished the day up 0.4%. Not bad. But at 2pm New York time, the index had been up 2.3% before dropping 1.4% in the final hours of the trading day.

Why the early surge and late afternoon selloff?

Hopes and fears over if, when, and how big the next US government stimulus package will be.

Investors piled into shares after hearing that Nancy Pelosi, the Democratic House Speaker, and Treasury Secretary, Steven Mnuchin, were both amenable to fresh negotiations on the stalled stimulus measures.

Investors headed for the exit just hours later when news leaked that the Democrats are still pushing a US$2.4 trillion (AU$3.4 trillion) package which Republicans are unlikely to accept.

While there are no guarantees, it’s almost unimaginable that the two sides won’t reach an agreement sooner rather than later to buoy the US economy and share markets. President Donald Trump has already bridged the gap, saying he’d accept a US$1.5 trillion proposal.

Meanwhile…

While the US is working through its partisan issues, new stimulus measures are being unveiled on a daily basis across the world.

In the United Kingdom, which is looking at six months of new viral lockdowns, the Australian Financial Review (AFR) reports:

Britain has launched a “radical intervention” to head off a looming surge in unemployment…

Late on Thursday (AEST), Mr Sunak unveiled a six-month “Winter Economic Plan” – replacing the budget – which centred on a scheme to part-bankroll the wage bills of all small and medium-sized enterprises (SMEs), and also of any bigger companies who could prove they’d taken a COVID-19 hit.

He also pushed out the repayment terms and deadlines for billions of pounds of government loans, loan guarantees and tax deferrals, keeping the fiscal lifeline open for at least the next six months.

The Australian government is also spending big to support the economy. From the AFR:

The federal budget will remain in deficit for the foreseeable future and the government will not focus on a return to surplus and stabilising debt until the unemployment rate is “comfortably” below 6 per cent, Treasurer Josh Frydenberg says.

The budget to be released on October 6 is expected to forecast gross debt to exceed 45 per cent of GDP, pushing it close to or over $1 trillion…

And it’s not just governments piling on debt in today’s near-zero rate environment that’s likely to fire up share markets. Aussie households have also received an easier path to new loans. As Bloomberg reports:

Australia will make it easier for banks to approve mortgages and small-business loans…

As part of a sweeping overhaul of so-called responsible lending obligations, the government will allow banks to rely on income and spending information provided by borrowers when assessing loan applications, rather than doing their own lengthy verifications, Treasurer Josh Frydenberg said…

As you’d expect, all the big four banks’ share prices are rocketing on the news.

National Australia Bank Ltd. (ASX: NAB), for example, is up 7% in early afternoon trading.

Foolish takeaway

As mentioned above, all shares are not created equal. The rising tide of stimulus will lift some more than others. And some will even see their share prices fall, regardless of the flood of easy money.

Not even all of the 200 biggest listed companies, those who make up the ASX 200, will go up in value. But on average, as new stimulus measures take hold and investor sentiment lifts, their share prices should rise.

One way to gain access to the wider performance of the top 200 ASX companies is via the Ishares Core S&P/ASX 200 ETF (ASX: IOZ). The exchange-traded fund (ETF) aims to mirror the performance of the ASX 200 accumulation index, meaning share price moves plus dividends.

Closely in line with the index, the ETF is down 10% year to date and up 31% since 23 March.

More reading

• Why the Ramelius (ASX:RMS) share price is at a new all-time high
• 3 ASX high-growth ETFs growth investors can’t ignore
• A strange thing is happening with index funds…

Motley Fool contributor Bernd Struben 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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Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Fortescue Metals Group Limited (ASX: FMG)

According to a note out of Ord Minnett, its analysts have retained their buy rating and $20.00 price target on this iron ore producer’s shares. The broker notes that iron ore prices have softened in September. However, it suspects that prices could soon rebound due to increasing steel production. This bodes well for Fortescue and could mean more generous dividends for shareholders over the near term. I agree with Ord Minnett and think Fortescue would be a top option for income investors right now.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and lifted their price target on this airport operator’s shares to $6.66. While the broker acknowledges that it could take years before passenger numbers to recover to 2019 levels, it still believes Sydney Airport is a buy. It believes its shares are great value and a top long term option for investors. Macquarie has pencilled in a 15 cents per share dividend in FY 2021. I agree with Macquarie on this one. Travel markets will eventually return to normal, so I feel Sydney Airport could be a great buy and hold option.

Treasury Wine Estates Ltd (ASX: TWE)

Analysts at Credit Suisse have upgraded this wine company’s shares to an outperform rating with a $12.30 price target. The broker made the move largely on valuation grounds after a sizeable pullback in its share price recently. In addition to this, Credit Suisse doesn’t believe the Penfolds brand image has been damaged by the anti-dumping allegations in China and believes there is pent up demand for its wines from postponed weddings and other celebrations. I think Credit Suisse makes some good points and it could be worth a closer look.

More reading

• Why Atlas Arteria, Cochlear, Telix, & Treasury Wine shares are dropping lower
• Why Iron Road, Nuchev, Telix, & Treasury Wine shares are pushing higher today
• Why the Flight Centre (ASX:FLT) share price and Webjet (ASX:WEB) share price are taking off
• Top brokers name 3 ASX shares to buy today
• Why you should look beyond the second wave to the blue investment skies beyond

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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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Village Roadshow Ltd (ASX: VRL) today provided a further update on its proposed acquisition by BGH Capital announced on 7 August, 2020. The news has had a lacklustre effect on the Village share price which, at the time of writing, has edged 0.47% lower to $2.10. This compares to the All Ordinaries Index (ASX: XAO) which has risen 1.1% to 6,127 points.

Takeover agreement

The Village share price is flat today after the company announced that, under the agreement, its shareholders will receive up to $2.45 per share.

The offer will be either a $2.20 (structure A) or $2.10 (structure B) base price plus up to 25 cents per share, should the company be able to meet certain conditions. They include the reopening of theme parks and 75% of its cinema business reopening as well as Queensland border restrictions eased.

The implantation agreement is expected to be finalised on 16 December, 2020.

COVID-19 impact

The entertainment company has been severely hit by COVID-19 lockdown restrictions. Village Roadshow saw its entire cinema exhibition, theme parks and film distribution close, putting the company at a material loss.

As Australia has been improving its management of the outbreak, however, Village Roadshow has been slowly opening its services. Theme parks are open but operating at a reduced capacity, and its film distribution is coming back online.

The cinema business, predominately in Victoria, is focused on the reopening with pricing and tactical initiatives. It could be December however, before any cinemas open to the public in that state.

About the Village share price

The Village  share price has had an eventful year, reaching as high as $4.10 in January from the initial bidding war between BGH Capital and Pacific Equity Partners. The Village share price then fell to a low of 77 cents in March due to COVID-19 wreaking havoc on economic activity around the world. However, the Village share price now appears to be settled around its current levels where it has spent the majority of last four months.

More reading

• Pure Foods (ASX:PFT) share price lifts, bucking the falling market
• Here’s why Soul Patts (ASX:SOL) is the king of ASX dividend shares
• Why the Chalice (ASX:CHN) share price rocketed 28% today
• Why the iCandy (ASX: ICI) share price is on a wild ride
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just

Motley Fool contributor Aaron Teboneras owns shares of Village Roadshow Limited. 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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At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a very positive note. The benchmark index is currently up a sizeable 1.5% to 5,965.5 points.

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

Bank shares storm higher.

It certainly has been a great day for Commonwealth Bank of Australia (ASX: CBA) and the rest of the big four banks on Friday. All four banks are charging materially higher today and are playing a key role in the ASX 200’s strong gain. The catalyst for this is news that the Federal Government is planning to relax its responsible lending requirements.

Westpac rated as a buy.

The Westpac Banking Corp (ASX: WBC) share price is up over 7% at lunch. This appear to have been driven by the above-mentioned responsible lending news and also a broker note out of Goldman Sachs. Its analysts have retained their buy rating and placed a $19.80 price target on the banking giant’s shares after it announced a settlement with AUSTRAC. It commented: “With this significant overhang for the stock now behind it, at a digestible incremental financial cost, we expect the stock to begin to re-rate (currently trades at a 17% PER discount to peers, versus in line historically), and reiterate our Buy.”

Premier Investments delivers a record profit.

The Premier Investments Limited (ASX: PMV) share price is trading lower today despite announcing a record profit for FY 2020. For the 12 months ended 25 July, the retail conglomerate posted a 2.1% decline in revenue to $1.25 billion and a 29% increase in net profit after tax to $137.75 million. This profit growth was driven largely by high margin online sales. The company declared a full year dividend of 70 cents per share, which was flat year on year. It advised that government subsidies were not required for the payment of its final dividend.

Best and worst ASX 200 shares.

The best performer on the ASX 200 at lunch is the Westpac share price with its 7% gain. This follows the relaxing of responsible lending and the release of a positive broker note out of Goldman Sachs. The worst performer has been the Atlas Arteria Group (ASX: ALX) share price with a 2.5% decline. This is largely due to the toll road operator’s shares trading ex-dividend this morning.

More reading

• Why ASX bank shares are rocketing up Friday
• Why Adbri, Brickworks, Northern Star, & Westpac shares are surging higher today
• Why Atlas Arteria, Cochlear, Telix, & Treasury Wine shares are dropping lower
• Why this fund manager is backing ASX copper shares
• Why the Westpac (ASX:WBC) share price is storming 6% higher

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Premier Investments 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Electric car manufacturer Tesla Inc (NASDAQ: TSLA) has been growing by leaps and bounds, and with high demand exceeding its production capabilities, the company is at low risk for a slow season. In fact, a recently leaked email from CEO Elon Musk indicates that Tesla is about to beat yet another of its records for vehicles delivered during the quarter.

If that’s so, why aren’t analysts evaluating the company and its stock rejoicing? 

Delivery estimates are high

Tesla’s leaked email indicated that the company could record its highest-ever vehicle deliveries during the third quarter of 2020. The last record was set during the fourth quarter of 2019, with 112,000 vehicles delivered.

Why all this concern about deliveries? As a full-chain manufacturer that has control over its production from beginning to end, Tesla does not record any revenue on its products until the finished vehicle is delivered to its consumer. So the growing number of deliveries not only serves as a barometer for customer demand, but it also means the revenue recorded could potentially lag the company’s investment in parts and factories by a significant amount. 

However, given the wording of Musk’s email, the expected new record seems to refer to a narrow margin over the past record of 112,000, placing the company’s expected number of deliveries between 110,000 and 115,000. The only problem is that a general survey consensus expected 123,000 vehicle deliveries in the third quarter, given the company’s previous forecast of 500,000 deliveries for the entire year. That means Tesla expects to beat its previous record, but that the new record will actually be less than the analyst estimates. 

So what if it’s a miss?

Is it really such a big deal if Tesla comes in below estimates? Indeed, Tesla could be setting a new record despite economic kinks, and that is what investors should really be focusing on. 

Like many other companies during early 2020, Tesla had to close some of its factories as the COVID-19 pandemic has spread across the world. On one point earlier this year production came to a full stop, interrupting the company’s attempts to ramp up capacity and resulting in a year-over-year 5% drop in second-quarter revenue. Musk acknowledged that Tesla still has wrinkles to iron out before it can crank out more product. 

However, the Chinese appetite for Tesla cars increased by 56% during the first six months of 2020 compared to the prior-year period, and this was despite the pandemic-related shutdowns. If the third-quarter vehicle deliveries include US vehicles whose production was delayed during the second quarter, then it seems logical that Tesla, back at full-capacity production by now, should be able to meet or even beat estimates for third-quarter deliveries. 

The fact that the company is surpassing last year’s record quarterly deliveries is astounding in and of itself. But not meeting expectations means that the company is either still dealing with backlogged production or lagging demand in the new Chinese market. Since China’s deliveries are only increasing quarter after quarter, it seems likely that the issue here is too much demand for a still-scaling pipeline. 

Given all that, of course, Tesla is definitely in a better place than would be implied by missing delivery expectations. However, in order to justify its current valuation, Tesla would need to not just meet, but exceed, investors’ expectations, even during this pandemic. This automotive stock may be taking the long road to changing the car industry, but beating its own record in a time of economic downturn is already amazing enough.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Tesla stock will surge 27% to $500, according to this analyst
• Why this fundie still sees an ASX tech share surge
• How Elon Musk’s Tesla delivered a body blow to these ASX stocks
• Elon Musk’s ‘Battery Day’ could see these ASX mining shares soar, and volatility hits the markets
• Tesla’s ‘Battery Day’ is a dud; stock tumbles

Christine Williams 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 Tesla. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Responsible lending rules brought in after the global financial crisis are about to be scrapped.

Federal treasurer Josh Frydenberg will reportedly strip Australian Securities and Investments Commission’s (ASIC) oversight into bank lending, to allow more cash to flow to alleviate the COVID-19 recession.

The effect of Frydenberg’s reforms will be that lenders will no longer be punished if loan applicants mislead them about their circumstances. Banks can take the borrower’s income and expenses information on face value, rather than be nervous about them lying.

Now banks like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking GrpLtd (ASX: ANZ) are ready for the good times to roll again.

All four major have seen their share prices shoot up Friday morning, with Westpac up 6.78%, NAB up 6.22%, ANZ up 5.28% and CBA up 3.57% shortly before 12noon. 

Why responsible lending rules?

The Labor government brought in the responsible lending rules in 2009 as a response to the global financial crisis. The GFC itself was triggered by US subprime loan defaults.

Ever since then there’s been a tug-of-war on the topic between ASIC, the big banks, the Reserve Bank and the finance industry Royal Commission.

ASIC and the Royal Commission argued that lenders must apply the rules as they stand. The banks and the Reserve Bank complained it was too hard to give out credit that would otherwise boost the economy.

Irresponsible lending will send many Australians broke

Consumer groups on Friday roundly panned Frydenberg’s reform plan, arguing Australians could fall into debt traps.

“The problem people are having right now is too much debt and not enough income. The government’s solution is to take on more debt with fewer protections,” said Financial Rights Legal Centre chief Karen Cox, who appeared as the first witness at the Royal Commission. 

“Unsustainable debt hurts real people and is a short-sighted fix for a flailing economy.”

Choice chief executive Alan Kirkland said putting more people in debt has never resolved an economic downturn.

“We got rid of the idea of ‘buyer beware’ in consumer law decades ago. To make it the principle that guides lending in the middle of a recession has disaster written all over it,” he said.

“Products like credit cards are complex. That’s why banks make so much money out of them. Banks are in a much better position to assess a person’s ability to repay, so they need to shoulder some of the responsibility.”

Financial Counselling Australia boss Fiona Guthrie said we had already learnt from the GFC that weaker lending criteria would lead to trouble.

“There is significant profit to be made in pushing borrowers to the edge… Removing responsible lending obligations will free banks up to aggressively push credit onto their customers.”

Banks have not recently indicated any hardship in handing out credit, according to Consumer Action chief Gerard Brody.

“The Commonwealth Bank recently said that the flow of credit is above pre-COVID levels and that lending is growing at a strong pace. And none of the big banks opposed the responsible lending laws at the recent House of Economics committee hearings.”

Cox said it was incredible that the lessons from the Royal Commission have been “so quickly forgotten”.

“Watering down credit protections will leave individuals and families at severe risk of being pushed into credit arrangements that will hurt in the long term.”

More reading

• ASX 200 up 1.5%: Big four banks rocket higher, Premier Investments delivers record profit
• Why Adbri, Brickworks, Northern Star, & Westpac shares are surging higher today
• Why the Westpac (ASX:WBC) share price is storming 6% higher
• 5 things to watch on the ASX 200 on Friday
• Westpac (ASX:WBC) share price hits 4-month low. Is it time to buy the ASX bank?

Motley Fool contributor Tony Yoo 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 S&P/ASX 200 Index (ASX: XJO) is storming higher on Friday thanks to strong gains in the banking sector. At the time of writing, the benchmark index is up 1.6% to 5,969.9 points.

Four shares that have climbed more than most today are listed below. Here’s why they are surging higher:

The Adbri Ltd (ASX: ABC) share price has risen 5% to $2.85. Investors have been buying the building materials company’s shares on Friday after the government announced plans to relax its responsible lending rules. This has sparked hopes that it could boost the housing market and ultimately lead to increasing demand for Adbri’s products. This would be a big lift for its struggling Australian business.

The Brickworks Limited (ASX: BKW) share price is up almost 3% to $19.20. This appears to have been driven by a positive broker note. This morning analysts at Morgans upgraded the company’s shares to an add rating with an improved price target of $19.98. It was pleased with Brickworks’ better than expected FY 2020 result and notes that management’s outlook was cautiously optimistic.

The Northern Star Resources Ltd (ASX: NST) share price has climbed 2.5% to $13.51. Investors have been buying Northern Star and other gold mining shares today after the spot gold price rebounded from its two-month low overnight. This has led to the S&P/ASX All Ordinaries Gold index rising by a solid 2% at the time of writing.

The Westpac Banking Corp (ASX: WBC) share price has jumped almost 7% to $17.49. This follows the aforementioned news that the government intends to relax responsible lending rules. These changes should be a boost to the bank’s lending in the near term. In addition, this morning analysts at Goldman Sachs put a buy rating and $19.80 price target on its shares. They believe Westpac’s shares could re-rate higher now its AUSTRAC issue has been settled.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. 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 Why Adbri, Brickworks, Northern Star, & Westpac shares are surging higher today appeared first on Motley Fool Australia.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to finish the week on a very positive note. The benchmark index is currently up a sizeable 1.6% to 5,971.5 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

The Atlas Arteria Group (ASX: ALX) share price is down almost 3% to $6.11. This morning the toll road operator’s shares traded ex-dividend for its 11 cents per share interim dividend. In addition to this, rising coronavirus cases in Europe appear to be weighing on its shares. Atlas Arteria has a collection of toll roads in France which could experience subdued traffic volumes in the near term if Europe goes back into lockdown.

The Cochlear Limited (ASX: COH) share price is down almost 1% to $200.65. Earlier this week UBS reaffirmed its sell rating and $175.00 price target on this hearing solutions company’s shares. Its analysts believe that the market is expecting too much from Cochlear in respect to sales growth in the coming years.

The Telix Pharmaceuticals Ltd (ASX: TLX) share price has fallen 1.5% to $1.75. This decline appears to be down to profit taking after some strong gains in recent months by the biopharmaceutical company’s shares. For example, prior to today, Telix’s shares were up a massive 115% over the last six months.

The Treasury Wine Estates Ltd (ASX: TWE) share price has dropped almost 1% to $9.00. Investors have been selling the wine company’s shares despite it being subject to a positive broker note out of Credit Suisse yesterday. The broker has upgraded Treasury Wine’s shares to an outperform rating with a $12.30 price target. This price target implies potential upside of almost 37% for its shares over the next 12 months. Clearly some investors aren’t as bullish on its prospects.

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James Mickleboro owns shares of TELIXPHARM DEF SET. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia has recommended Cochlear 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.

The post Why Atlas Arteria, Cochlear, Telix, & Treasury Wine shares are dropping lower appeared first on Motley Fool Australia.

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