Investors brace for harder hit from second wave

Original article by David Rogers
The Australian – Page: 20 : 9-Jul-20

The S&P/ASX 200 has shed 3.2 per in the last three trading sessions, while the Australian dollar has retreated ahead of Melbourne going into lockdown. Damien Boey of Credit Suisse says policymakers may have underestimated the economic cost of the lockdown, which may be closer to $26bn than the $6bn that has been forecast. He adds that the new lockdown may the "straw that broke the camel’s back" for many small businesses that were already struggling. Analysts also expect the new coronavirus outbreak in Victoria to weigh on corporate earnings and dividend payouts.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CREDIT SUISSE (AUSTRALIA) LIMITED

Capital raising rush far from over

Original article by Joyce Moullakis
The Australian – Page: 13 & 19 : 1-Jul-20

Data from Refinitiv shows that Australian-listed companies raised $US14.9bn ($21.8bn) via the issuance of new shares in the June quarter, as they sought to boost their balance sheets in response to the coronavirus pandemic. This is the highest quarterly total since late 2010, while some $US18.8bn worth of new shares were issued in the first half of calendar 2020. Fund managers generally expect the capital raisings momentum to be maintained in the second half. Meanwhile, the total value of mergers and acquisitions fell to $US24.9bn in the first half of 2020, compared with $US48.2bn for the first half of 2019.

CORPORATES
REFINITIV AUSTRALIA PTY LTD

Greed, fear: ASX wraps worst year since 2012

Original article by William McInnes
The Australian Financial Review – Page: 12 & 24 : 1-Jul-20

The Australian sharemarket shed 10.9 per cent during 2019-20, in a turbulent financial year for investors. The local bourse reached a record high in February, before the coronavirus pandemic prompted a savage sell-off. However, a number of stocks performed well during 2019-20, with Afterpay, Fisher & Paykel Healthcare and Mesoblast all gaining more than 100 per cent. Fund managers warn that the August reporting season will be a key test for the sharemarket’s recent rebound.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, AFTERPAY LIMITED – ASX APT, FISHER AND PAYKEL HEALTHCARE CORPORATION LIMITED – ASX FPH, MESOBLAST LIMITED – ASX MSB

Investors need to mind the looming earnings gap

Original article by Luke Housego
The Australian Financial Review – Page: 29 : 16-Jun-20

The coronavirus pandemic is set to weigh on the financial results of Australian-listed companies, with Morgan Stanley noting that the consensus forecast is for earnings to fall by 15.2 per cent in 2020. The average 12-month forward price-earnings ratios for the S&P/ASX 200 was 18.1 times before the recent sell-off, compared with a long-term average of around 14 times. Jason Steed of Morgan Stanley says a relatively small shift in earnings expectations when P/E ratios are high can prompt a sharp fall in share prices.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, STANDARD AND POOR’S ASX 200 INDEX

What crisis? Bull market rages on as beaten-down banks lead value charge

Original article by David Rogers
The Australian – Page: 13 & 19 : 5-Jun-20

The S&P/ASX 200 has gained more than 30 per cent since reaching a seven-year low of 4,402.5 points on 23 March. Morgan Stanley estimates that the benchmark index is currently trading on a record 12-month forward price-to-earnings ratio of about 19.55 times. While there has been strong support for some defensive growth stocks, value stocks continue to outperform; Chris Nicol of Morgan Stanley says there will be further upside for value stocks if there is a V-shaped economic recovery.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MORGAN STANLEY AUSTRALIA LIMITED

Investors should brace for another sharemarket sell-off, warn analysts

Original article by Euan Black
The New Daily – Page: Online : 12-May-20

The S&P/ASX200 has gained more than 20 per cent since 23 March, rebounding from a major sell-off in response to the coronavirus pandemic. Glenn Leese of TradingView cautions that the local bourse may retreat again; he notes that sharemarkets often rally after a big fall, only to incur an even larger slump. He adds that sharemarket crashes and corrections normally occur in a series of three waves, and the local market is currently experiencing its second wave.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, TRADINGVIEW

Secondary capital raisings ease on hope of reopening

Original article by Glenda Korporaal
The Australian – Page: 20 : 7-May-20

Data from ASX Limited shows that IPO activity slowed significantly in April, with seven new listings raising a combined $97m. This compares with the $1.2bn that was raised from new listings in April 2019. In contrast, the total value of capital raisings by companies that are already listed rose from just $2.3bn in April 2019 to $13.3bn. Max Cunningham, the executive general manager of listings and issuer services, expects the slowdown in IPOs to continue while coronavirus restrictions remain in place.

CORPORATES
ASX LIMITED – ASX ASX

Handle the market with care: ASIC

Original article by Eli Greenblat
The Australian – Page: 13 & 20 : 7-May-20

The Australian Securities & Investments Commission has expressed concern about a rise in day-trading activity among so-called ‘mum and dad’ investors during the coronavirus lockdown. ASIC notes that even market professionals often find it hard to time the market during volatile trading conditions, and it warns that retail investors risk incurring significant losses at a time when many cannot afford to do so. ASIC also notes that more retail investors are trading in complex investment products such as contracts for difference.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Crisis spurs a rush to raise capital

Original article by Ben Wilmot, Glenda Korporaal, Perry Williams
The Australian – Page: 13 & 17 : 28-Apr-20

National Australia Bank, Charter Hall Retail REIT and Monash IVF are among the latest companies to undertake capital raisings. Australian-listed companies have now raised more than $15bn from investors during the coronavirus pandemic, and Simon Ranson of JP Morgan expects this trend to continue. However, some companies have attracted criticism for giving preference to certain investors in the allocation of new shares.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CHARTER HALL RETAIL REIT – ASX CQR, MONASH IVF GROUP LIMITED – ASX MVF, JP MORGAN AUSTRALIA LIMITED

Hopes of V-shaped recovery likely to be dashed

Original article by David Rogers
The Australian – Page: 20 : 24-Apr-20

The global sharemarket has recovered about 50 per cent of the losses incurred in the sell-off during February and March. However, a further V-shaped recovery for equities is likely to be dependent on the global economy being restarted quickly. A V-shaped economic recovery is also unlikely, according to economists. Josh Williamson of Citigroup expects Australia’s economic growth to fall by 5.8 per cent in 2019-20, before rebounding by 6.1 per cent in 2020-21. However, he does not expect the economy to return to pre-virus growth levels until late 2021.

CORPORATES
CITIGROUP PTY LTD