The Australian share market, including the All Ordinaries Index (INDEXASX: XAO) and S&P/ASX 200 (INDEXASX: XJO) indices are expected to open slightly higher on Tuesday morning. Here’s what ETF investors need to know.
What you missed
Australia’s ASX200 closed above 6,000 points for the third straight day on Thursday, despite falling 0.7% for the session. Tech stocks were the only positive sector and the major miners being the biggest detractors, including BHP Group and Rio Tinto, which fell 1.7% and 1%, respectively, amid signs of a rebound in Brazilian exports reported by Vale S.A.
The march forward by the technology sector continued in the US with the Nasdaq adding 2.3%, the S&P500 1.4% and both Amazon (NASDAQ: AMZN) and Netflix (NASDAQ: NFLX) hitting new all-time highs.
Digital payments processing business Square (NASDAQ: SQ) rallied 10% on the back of expectations it can grow to dominate the direct deposit market. Anyone who has used the hardware would know user friendly it is.
It seems all markets are focusing on any good news, like German manufacturing orders recovering 10.4% in May, yet still 29.3% down on February’s level. In my view this should be of concern to all investors and now is the time to ensure your portfolio is well diversified.
Deals, clearances & share prices
Creditors of Virgin Airline Holdings are said to be considering their options with the Takeover Panel in an effort to recover more than the 10-20 cents in the dollar under Bain Capital’s winning bid. Once again, this illustrates that debt holders are the real owners of any business.
Regenerative medicine group Mesoblast jumped another 11.3% after receiving approval to expand its Remestemcel tests to children. Meanwhile, Event Hospitality & Entertainment, which owns a network of cinemas and both the Rydges and QT hotel chains, announced its dividend would be cut but that they had successfully accessed a further $205 million in debt. If you ask me the company is facing an existential crisis, with more debt not necessarily the best course of action.
Interesting fact: the total capital, not only debt, raised in June 2020 was $26 billion with Qantas Airways leading the way following a big capital raising. After a quiet crisis, Warren Buffett’s Berkshire Hathaway announced the acquisition of Dominion Energy for $9.7 billion, formally making a move into the storage and transmission of natural gas.
AustralianSuper & Hostplus performance is… up?
Australian Super announced that their aggressive Balanced option had finished the year in positive territory, delivering a financial year return of 0.52%. Given the quick turnaround from 30 June, I think that the fund’s massive unlisted property, infrastructure and utility assets have not been fully repriced yet.
On the positive side, ANZ reported that job advertisements were up a further 42% in June, albeit some 41% lower than February. Nonetheless, this should be positive for the likes of jobs platform Seek and leasing business McMillan Shakespeare.
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Drew is one of the founders of Wattle Partners. He is an experienced financial and investment adviser with expertise in self-managed superannuation funds, superannuation strategies, investment analysis and portfolio construction. Drew is a Partner at Wattle Partners.
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