The alternatives sector is unique in that it’s largely defined by what it’s not. Accordingly, how you fit alternatives within your existing asset class structure will depend on relativity, and how the investments interact with the other asset classes according to Atchison’s Kev Toohey.
The private markets juggernaut is one that has also thrown up a wealth of data that other players can use to sharpen up due diligence when making their own investment decisions – especially in the growing secondaries market.
Positive week for global markets
Another positive week for global markets, property sinks, reality setting in for Atlas Arteria (ASX:ALX)
It was another positive week for global markets, the ASX 200 (ASX:XJO) finishing 1.2% higher despite falling 0.5% on Friday.
Similarly, US markets have overcome the ‘will they or wont they’ stimulus discussions, with the S&P 500 and Nasdaq up 0.2% and 0.8% respectively.
It was a mixed day on Friday, with Australia’s largest company falling 0.7% after an otherwise solid week.
The property sector took a major hit on Friday, with GPT Group (ASX:GPT) and Scentre Group (ASX:SCG) down 4.7% and 3.5% respectively as investors grow wary of increasing vacancies and falling rents after a strong rally.
Unibail-Rodamco-Westfield (ASX:URW) bucked the trend rallying 12.1% after a number of large shareholders questioned the discounted capital raising proposal.
Toll road owner Atlas Arteria (ASX:ALX) flagged higher tolls, but was met with a 3.6% fall on regulatory concerns.
After recovering strongly post March some reality is sinking in for toll roads and airports, I’d suggest below average traffic will be the norm for some time to come placing pressure on dividends.
Pfizer (NYSE:PPE) vaccine around the corner, Aussie Broadband (ASX:ABB) stags, Tyro (ASX:TYR) makes a deal
Management of Pfizer Inc. (NYSE:PPE) flagged their intention to request approval for a potential COVID-19 vaccine in November, which would trigger an emergency FDA review before Christmas; shares finished 3.8% higher.
Morwell second tier NBN retailer Aussie Broadband (ASX:ABB) jumped over 90% on listing yesterday, offering a stark difference to the negative sentiment around market leader Telstra Corporation Ltd (ASX:TLS).
EFTPOS terminal provider Tyro Payments (ASX:TYR) announced an important deal with Bendigo Adelaide Bank (ASX:BEN) through which it would install Tyro terminals in all Bendigo sites, taking the group to the fifth biggest network behind the Big Four; shares jumped 5.9% on the news.
Chinese importers placed further pressure on the Australian economy, flagging bans on imports of cotton, yet Rio Tinto (ASX:RIO) is still likely to hit its export targets with iron ore not yet challenged.
RBA setting sights on the dollar, ASX blue chips ex-growth, big week(s) ahead
The Reserve Bank finally delivered on calls for more economic support this week, indicating they will be expanding QE policy into purchasing 10-year Government bonds as they seek to stimulate borrowing and investment as well as weaken the currency.
Australia’s ten-year Government bond yield remains one of the highest in the world which has kept our currency stubbornly high, something hurting exports.
Another round of IPO’s this week jumping over 50% are highlighting that ASX blue chips have clearly become ex-growth.
Investors are being forced to chase growth in much smaller companies; in my view the better opportunities lie offshore in Asia and the US.
I spoke with the team at Coolabah Capital during the week, their bond and credit strategies the best performing in the country, the team remains highly positive on hopes for a vaccine and continued strength in property prices, highlighting Chinese demand remains strong.
The next few weeks standout as the most important of the year with a number of vaccine trials due, if successful the market may be in for a strong rally.
Despite headlines, vaccine hopes are in my view more powerful than the US election result.
