K64 Auxiliary Finance and Insurance Services

Greed, fear: ASX wraps worst year since 2012

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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

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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

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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

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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

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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

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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

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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

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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

Earnings haven’t been revised low enough

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Original article by William McInnes
The Australian Financial Review – Page: 31 : 8-Apr-20

Earnings per share forecasts for S&P/ASX 200 companies have been reduced by seven per cent since February, due to the impact of the coronavirus pandemic. Macquarie argues that this downgrade is too small, given that Australia’s GDP growth is expected to contract in 2020; the broker adds that the financial market appears to have priced in a much higher decline. Macquarie notes that forecasts are difficult at present as many listed companies have withdrawn their earnings guidance in response to the pandemic.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MACQUARIE GROUP LIMITED – ASX MQG

Bankers ready for GFC-style raising spree

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Original article by Anthony Macdonald, Sarah Thompson
The Australian Financial Review – Page: 15 & 20 : 6-Apr-20

Australian companies are looking to equity funding to assist them through the COVID-19 pandemic, and private equity firms are eager to participate in possible transactions. The ASX has temporarily amended its listing rules to allow companies to raise more funds via non-renounceable rights issues and share placements, while coronavirus-impacted companies that are tipped to undertake equity raisings include Virgin Australia, Sydney Airport and Tabcorp.

CORPORATES
ASX LIMITED – ASX ASX, VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, SYDNEY AIRPORT – ASX SYD, TABCORP HOLDINGS LIMITED – ASX TAH, WEBJET LIMITED – ASX WEB, FLIGHT CENTRE TRAVEL GROUP LIMITED – ASX FLT, SOUTHERN CROSS MEDIA GROUP LIMITED – ASX SXL, CORPORATE TRAVEL MANAGEMENT LIMITED – ASX CTD, BORAL LIMITED – ASX BLD, JAMES HARDIE INDUSTRIES PLC – ASX JHX, KATHMANDU HOLDINGS LIMITED – ASX KMD, NEXTDC LIMITED – ASX NXT, COCHLEAR LIMITED – ASX COH