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ASX 200 (XJO) morning report – 8 ASX shares to watch

The S&P/ASX 200 (ASX: XJO) is expected to open higher on Tuesday according to the Sydney Futures Exchange. Here’s what ASX investors need to know.

ASX share market recap

The market responded positively to news that the majority of Victorians will remain under stringent lockdown measures well into November; the ASX 200 finishing 0.3% higher on Monday.

Transurban Group (ASX: TCL) was among the hardest hit from the announcement, with travel restricted on its key toll road, falling 2.8% for the day. Elsewhere it was the large caps holding the market higher, BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) adding 2.4% each after the iron ore price breached $130 per tonne over the weekend.

CSL Limited (ASX: CSL) added the most to the recovery, boosted 1.1% after announcing it had signed an agreement with the Federal Government for the supply of 51 million doses of an as yet unproven vaccine, along with an agreement with AstraZeneca PLC (LON: AZN) to produce their Oxford vaccine if successful. AstraZeneca shares finished 4% higher in European trading.

Featured video: The Australian Finance Podcast September Q&A

Value vs. growth

The latest entrant to the burgeoning buy now pay later sector, Laybuy Holdings Ltd (ASX: LBY), listed on the ASX on Monday adding 45%, suggesting the issue should have been priced a little higher but delivering a stag profit for the few able to obtain an allocation.

Sydney Airport Holdings Pty Ltd (ASX: SYD) announced that retail investors took up just 62% of their entitlements in the current capital raising, despite being offered at a 20%+ discount to the current price. With the likes of Helloworld Travel Ltd (ASX: HLO) not pricing in a return to pre-pandemic travel levels until 2025, I’m erring on the side of caution for the embattled travel sector.

Is it time for Magellan Financial Group Ltd (ASX: MFG) to buy Platinum Asset Management Ltd (ASX: PTM)? The former hit $100 billion in assets under management in August, the latter losing another $200 million and sitting at $21 billion. The issue? I’m not sure Platinum’s earnings growth would meet Magellan’s preference for growing companies.

European markets provide positive lead

Chinese exports recovered strongly in August, booming 9.5% on 2019 and coming in well ahead of expectations; the third straight month of improvement. Imports remain weak as the economy uses the COVID-19 lockdowns to transition towards more self-reliance, imports falling 2.1% and those from Australia a much larger 26% fall. In my view, Australian investors should be reviewing their ASX-listed holdings for under-appreciated exposures to China.

With US markets closed, the ASX will follow the European lead, which finished 1.7% higher on the back of a broad-based rally. Car makers led the way, Volkswagen AG (ETR: VOW3) adding 4.7% after Tesla founder Elon Musk was seen test driving the latest model in Germany. European and Japanese GDP announcements are due today.

This article was written by Drew Meredith, Financial Adviser and Director of Wattle Partners. To get in contact with Drew, click here to visit the Wattle Partners website.

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The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

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