ASX 200 to open flat – VAH, AYS & BLD shares in focus

The Australian share market and ASX 200 (ASX: XJO) is likely to open flat on Wednesday according to data from the Sydney Futures Exchange and following subdued trading overnight. Here’s what ASX investors need to know.

Markets hike higher

Global share markets continued their incredible rally even as protests and riots continued in the US following President Trump’s call to bring in the military. The Dow Jones added 1% and the S&P 500 0.8% with two companies increasing for every one that fell.

The highlights remained the cyclical businesses with American Express and Caterpillar pushing higher as shutdowns eased.

The ASX 200 recovered 0.3% despite a mixed day on Thursday, with most sectors flat it was the retail exposed property businesses like Unibail-Rodamco-Westfield moving higher. The likelihood of another $500 billion in stimulus in Europe sent the Eurostoxx up over 2.6% on the back of a strong banking sector, ING Groep rose 3%.

Featured video: what is the Dow Jones?

Zoom’s stellar report

Zoom Video Communications (NASDAQ: ZM), the platform that has become ubiquitous during this Work From Home (WFH) experience, continued its incredible rally hitting another all-time high and tripling in 2020. Management reported a 169% increase in quarterly revenue to $328 million and now expects the full-year result to be $1.775 billion, double that originally forecast.

Australia’s own technology darling Zip Co, one of the few competitors to Afterpay, rallied close to 40% on Wednesday after announcing the acquisition of New York-based Buy Now Pay Later (BNPL) platform Quadpay for $403 million. The acquisition will be funded from a $200 million capital raising and position ZIP as a truly global player in the sector with some $3 billion in total transaction value expected.

Virgin buyers down to 2

Virgin Australia’s potential suitors were reduced to just two parties on Tuesday, with Bain Capital and Cyrus Capital Partners the lucky two. Both have indicated a preference to retain the Virgin branding and will seek to partner with Richard Branson.

Elsewhere, the Kerry Stokes-owned Seven Group Holdings announced it had acquired a substantial but ‘friendly’ stake in embattled cement producer Boral once again opening the discussion on acquisition activity.

Amaysim, a low-cost mobile phone plans as well as energy deals through its Click Energy business, refused to comment on rumours of a takeover offer from Origin Energy. That said, it didn’t stop the Amaysim share price from increasing 12% for the day.

Finally, Wednesday will see the long-awaited GDP figures for the Australian economy, with experts predicting a contraction of just 0.2% to 0.3%.

Looking for a good story to read next? Best ETFs Australia’s Max Wagner asks, “What’s the big deal with Equal Weight & Market Cap weighted ETFs?”

This report was written by Drew Meredith, Financial Adviser and Director of Wattle Partners.

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