Archives: Reports
We are selling Alumina (AWC) and Whitehaven Coal (WHC), adding to CSL, Resmed (RMD)& Qantas (QAN)
Local stocks got off to an encouraging start yesterday, with the index actually managing to edge higher early on ignoring the 800-point plunge by the Dow but things slowly but surely unwound throughout the day as aggressive selling hit the Resources Sector, perhaps some big players agree with MM that things have simply advanced too far too fast. Tuesday ultimately saw the ASX200 close down 0.8%, back under 7000, as profit taking appeared to roll through the energy stocks and miners while at the same time a number of the classic “risk off” areas such as healthcare…
Some cracks started to appear in the ASX today with the recently hot Energy & Materials sectors coming under pressure while the traditionally defensive Healthcare & Staples saw buying of recent weakness. All the talk has been about commodities in recent days/weeks and today some profit-taking became obvious, which shouldn’t come as a huge surprise really given the recent run.
We are tweaking the Flagship Growth Portfolio to become slightly more defensive in nature.
The ASX200 closed down 1% yesterday as the escalating Ukraine conflict continued to panic markets although we significantly outperformed other indices in the region due to our large resources exposure e.g. Japan, Hong Kong, India, and Korea all fell between 2% & 4%. We saw over 75% of stocks on the ASX200 decline on the day but when the influential energy and resource stocks rally strongly it undoubtedly helps shore up the local index.
After opening the session higher, stocks were largely one way for the rest of the day closing down ~1% with the out of favour IT sector continuing to languish, ably supported in the sell-off by Healthcare. On the other hand, if you’re heavily into energy & gold you’re cheering with bullion +$US14 in Asia today, settling around $US1985 at our close, Brent Crude hitting ~US$130/bbl while industrial commodities in Asia continued to rally – more on that below.
We are adding to our existing position in Virgin Money (VUK) into recent weakness. We view the stock as oversold, offering value sub $3. Adding 2% will take it to a 6% portfolio weighting.
March kicked off with another week dominated by news around Russia’s invasion of the Ukraine while over the weekend we saw the Chinese Government set ambitious economic growth targets suggesting another bout of aggressive fiscal stimulus in an effort to offset both rising geopolitical tensions and their painful domestic property collapse – it was only back in the 2nd half of 2021 that China Evergrande’s debt woes made scary headlines but it already seems like an almost distant memory. The ramifications of Chinas 5.5% GDP target, which is well above the IMF’s 4.8%, suggests meaningful…
The ASX200 danced a similar jig to last week by looking good on Thursday morning only to unravel through Friday as the inconceivable crossed the newswires – Russian forces had shelled Europe’s largest nuclear power plant in Southern Ukraine setting it ablaze and leaving onlookers considering another Fukushima disaster. It’s very easy to comprehend the markets rising concerns when the New York Times ran a headline that an explosion would be the end of Europe – Vladimir Putin playing an extremely scary game that may still force the West to intervene.
Weakness into the weekend ruined what was nearly a perfect week. The local index was up 154pts to yesterdays close in the first 4 days, giving back around a third of the gains on the final day. A further escalation in tensions in the Ukraine was largely to blame for the weakness and as is often been the case, traders have looked to take money off the table at the end of the week rather than risk 2 days of news flow without liquidity. Despite that there was some support into the afternoon and the index finished +85pts from their lows around midday.
