Viewpoint: Bullish
Hong Kong’s index has rallied nicely following the news out of China and it looks like the 14% correction from February is complete – MM now expects the China facing Asian indices to outperform the US S&P500 Index.
The $US edged higher overnight but the move was largely ignored elsewhere, we anticipate further upside from the greenback which has led to MM holding back from increasing our exposure to the resources but the stimulatory move by the PBOC has thrown a spanner into the mix with regards to this call.
Unprecedented global economic stimulus has more than doubled the CRB Index since the eye of the pandemic panic around 15-months ago with bellwether economic indicators such as copper and crude oil both more than doubling.
The ASX200 again succumb to the almost magnetic pull of the 7300 level, the index has been rotating around this area within +/- 100-points for over a month but from my perspective it feels even longer!
EVENT Hospitality & Entertainment Limited is an Australia-based company engaged in entertainment, hospitality and leisure business. The Company’s segments include Entertainment, Entertainment Germany, Hotels and Resorts, Thredbo Alpine Resort and Property and Other Investments. Entertainment segment includes cinema exhibition operations in Australia and New Zealand, technology equipment supply and servicing, and the State Theatre. Entertainment Germany segment includes the cinema exhibition operations in Germany. Hotels and Resorts segment includes the ownership, operation and management of hotels in Australia and New Zealand. Thredbo Alpine Resort segment includes all the operations of the resort including property development activities. Property and Other Investments segment includes property rental, investment properties and investments designated as at fair value through other a range of income. The Company operates in Australia, New Zealand and Germany.
EVT recovered strongly from an initial aggressive sell-off when the pandemic broke out but the operator of Event Cinemas, QT & Rydge’s Hotels, Sydney Ferries and Thredbo Resorts couldn’t have a worse business model for another round of COVID shutdowns.
Casinos are certainly “on the nose” at the moment with Crown (CWN) being taken to task by the regulators, its not pretty reading but we do believe it will emerge a stronger business moving forward, similar to the banks after their royal commission which also made awful reading.
MM has been a fan of CTD for a while looking for an optimum entry opportunity but the stocks chopped around since last November challenging our buy zone on occasion but alas falling short.
The Peoples Bank of China (PBOC) is effectively pumping over $200bn into their economy as they cut the amount of cash that banks must hold in reserve thus enabling greater lending flexibility in the second half of 2021. So far the initial reaction has been to send most equity markets higher understandably led by the resources stocks.
The US volatility index (VIX) caught my attention overnight as it held firm even as US stocks ground ever higher, usually I would interpret this as a warning signal of pending weakness for equities but with US reporting season kicking off imminently it makes sense.
