Thursday 22nd October 2020
ASX pares losses, Healius (ASX:HLS) delivers
Volatility continues, ASX pares losses, Healius (ASX:HLS) delivers, AMP (ASX:AMP) sold off, positive morning ahead
The ASX 200 (ASX:XJO) pared early losses to finish down just 0.3% on Wednesday, with oil prices the biggest detractor.
The oil sector fell 1.8% as oil prices pushed lower on concern of weaker demand.
Woodside Petroleum Ltd (ASX:WPL) reported quarterly production had fallen 2% on 2019 levels but revenue had fallen a further 42% as sales prices collapsed; shares fell 1.6%.
Santos Ltd (ASX:STO) fell a similar amount with production up 12% for the year to date by revenue falling 18% to $797 million for the first three quarters.
The outlook for oil remains reliant on a return of normal people and economic movement which may be some time given the worsening European second wave.
AMP Ltd (ASX:AMP) fell 5.5% despite reporting generally positive results from their core Australian businesses.
The wealth management division saw net outflows of $1.95 billion, but inflows of $6 billion taking assets under management to $121.4 billion.
Similarly, AMP Capital saw $1.1 billion in redemptions, AUM falling 0.4%.
The company remains under the close watch of a number of private equity firms.
Healius pathology division booming, AGM season pressuring boards, Mydeal.com.au jumps 84% on IPO
Pathology business Healius (ASX:HLS) jumped 9.3% leading the market after reporting strong growth in revenue, hitting $492.5 million for the quarter compared to $419 million in 2019.
The company has been processing a large share of COVID-19 tests, with management highlighted the growth was unlikely to be sustained; seemingly this didn’t faze investors on the day.
Earnings for the quarter more than doubled to $81.2 million.
Magellan Financial Group (ASX:MFG) faced the virtual pressure of shareholders, with many questioning the on balance sheet investments in investment banking firm Barrenjoey, $155 million, and settlement system, Finclear, $20 million.
I’m struggling to understand the value in this move and whether it is an appropriate use of shareholder’s capital, particularly given Magellan world leading profit margins of close to 55%.
The latest IPO off the blocks was no-frills e-commerce retailer Mydeal.com.au (ASX:MYD) which jumped 84% on debut.
Whilst a positive for shareholders, this tends to suggest the price could have been higher and less dilutive for existing investors.
US markets up on strength in financials, Tesla (NASDAQ:TSLA) beats expectations, stimulus ‘just about there’
The S&P 500 outperformed the tech heavy Nasdaq, adding 0.5% on Thursday compared to -0.1%.
The cyclicals were the biggest beneficiaries with the banking sector adding 2% across the board on an improving jobs outlook and signs the $1.9 trillion stimulus package may be passed.
Electric vehicle maker Tesla (NASDAQ:TSLA) was the highlight of the day, reporting its fifth consecutive quarterly profit of $874 million, well ahead of consensus expectations of $4593 million as Elon Musk continues to defy expectations.
Revenue was also 40% higher with management confirming their goal to deliver 500k cars this year; the share price is up 400% in 2020.
It’s becoming clearer where the global recovery is really being driven from, with consumer goods group Unilever (LON:ULVR), the maker of Ben & Jerry’s and a number of cleaning products, reporting a return to sales growth, up 4.4%, driven primarily by emerging markets China and India.
Drew is editor of The Inside Network's publications and a principal adviser at Wattle Partners.
