Roy Keenan from Yarra Capital Management shares insights with James Dunn from The Inside Network on the role of active management. The Inside Adviser
After the Hayne Royal Commission many advisers decided to steer away from large dealer groups in favour of becoming self-licensed. In the last six months, however, that trend has taken an abrupt turn.
Oil price hits nine month high
ASX 200 (ASX:XJO) 1.3% higher, oil price hits nine month high, AUD rallies, Dow hits 30,000
The ASX200 (ASX:XJO) saw another strong day adding 1.3% on the back of the ‘trifecta’ of COVID-19 vaccines with hopes for an economic recovery resulting in the oil price hitting a nine-month high.
As can be expected, energy stocks benefited most, the sector up 3.5% on the news.
Beach Petroleum (ASX:BPT) increased 8.2% whilst Origin Energy (ASX:ORG) which looks to be key to a gas lead recovery added 5.2%.
Santos Ltd (ASX:STO) also received approval for its controversial Narrabri gas exploration program, the share price improving 3.9% on the news.
Domestically, it was news of the Queensland border reopening that spurred a recovery in the travel sector with Webjet (ASX:WEB) adding 4.7% on the news.
The gold sector remains under pressure with the AUD hitting a 3 month high of $0.73, sending Newcrest Mining (ASX:NCM) down 6.1%.
Despite the current rotation, gold bullion as opposed to gold stocks should continue to play a key role as the threat of inflation rises in the coming years.
Challenger (ASX:CGF) credit rating retain, Brickworks (ASX:BKW) delivers, Technology One (ASX:TNE) considers a special dividend.
Brickwork’s Ltd (ASX:BKW) has delivered one of the strongest updates of AGM season, reporting a 93% increase in net profit to $299 million, despite underlying profit falling 38% to $146 million due to 2019’s property gains.
Management elected to increase the dividend by 4% on the back of the incredible success of BKW’s partnership with Goodman Group (ASX:GMG).
The company has partnered with GMG to build custom distribution centres for the likes of Amazon, with their stake now valued at $727 million of a $2.0 billion asset base.
Management now estimate the property asset backing of shares is now $25.24, well above the current share price but importantly their domestic building products division is ahead of 2019 volumes; shares finished 4.0% higher.
TechnologyOne (ASX:TNE) flagged the potential for a special dividend despite increasing their ordinary dividend by 8% on 2019 levels.
The company reported strong demand for their enterprise management platform, as councils, governments and corporate sought to digitise.
Underlying profit increased 13% to $86.1 million on the back of a 32% increase in recurring revenue to $134.6 million.
Dow Jones hits 30,000, Trump hands over the keys, cyclicals continue to rally
The Dow Jones Industrial Average, a 30-stock index with a traditional focus on more cyclical, old fashioned companies, reached an all-time high of 30,000 points on Tuesday with the 124-year-old Boeing Inc. (NYSE:BA) a key contributor.
The rally came on news of a third vaccine candidate, the fastest annual growth rate in US home prices in September at 7% and confirmation that the White House had begun the process of transition to Democratic president.
Both the S&P500 and Nasdaq also added 1.6 and 1.5%, with growing confidence that the worst is over despite the threat of the impending Thanksgiving Day being a super spreader event for Coronavirus.
In a sign that not all Chinese companies are losers from the trade war, smart phone maker Xiaomi (HKG:1810) reported a 35% increase in sales in the third quarter, with the majority outside China, as the company grew market share at Huawei’s expense.
According to analysts global shipments of its phones increased 42%, well ahead of Apple (NYSE:AAPL) and Samsung (KRX:005930).
