Viewpoint: Bullish
The local currency is a great indicator of the global economy, its regarded by most market participants as a proxy for economic growth similar to Copper. The chart below illustrates how since last March the “Aussie” has already rallied 45%, reaching levels way above when the coronavirus was even discussed.
We’ve discussed UK based bank VUK a number of times in recent reports, the potential pullback we had been flagging is unfolding and our buy zone is actually approaching fast.
(VUK -4.93%): The UK bank was hit hard today just as we mentioned we were thinking of selling it in the AM note this morning. It seems the deteriorating COVID conditions in Europe are hurting this stock which is understandable. Despite the share price pull back today, we still like VUK and won’t be shaken out of the position into weakness given we think it’s worth $4
Macquarie upgrade REA Group to a buy while simultaneously cutting competitor Domain (DHG) to a hold arguing REA has a bigger sway in the market.
The registry and corporate administration business has agreed to pay $US750m for US listed Wells Fargo (WFC US) Corporate Trust Services (CTS) business.
Computershare (CPU) operates share registries and computer bureaus which includes the administration of employee share and option plans and the provision of software that specializes in share registry, financial and stock markets. The Company also provides corporate trust services and acts as a trustee for clients’ debt offerings in certain markets.
This is a stock on the nose, it’s fallen from $8.80 this year to be trading just above its 52 week lows at $4.79 yesterday. We paid $4.69 for it with a 6% portfolio weighting. Putting the human element to the floods to one side, the actual financial hit to IAG is manageable.
This week we got more colour around there new corporate structure and in MM’s view, this is a game changer for the much maligned telco.
The notes have a first call date in July of 2021 however they are essentially perpetual notes with a maturity out 75 years. Putting the takeover to one side, given Crown’s current balance sheet and the Royal Commission playing out, we doubt they’ll redeem them on this date.
Secondly we are looking at our 10% holdings in both CBA and NAB, the thought process is simple, if we reduce NAB & / or CBA we can add Westpac (WBC) at lower levels into a correction.
