Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
ASX finishes higher, broker upgrades galore
ASX finishes higher, broker upgrades galore, Bingo (ASX:BIN) gets a private equity bid
The ASX200 (ASX:XJO) finished 1.2% higher on Tuesday, benefitting from increasing corporate activity and a round of broker upgrades for mining and retail companies.
The discretionary retailing sector finished 2.0% higher on the back of an 8.0% increase in Domino’s Pizza (ASX:DMP), whilst the industrials sector added 1.3% after Bingo Industries (ASX:BIN) received a takeover bid, sending the share price 20.4% higher.
The garbage collection business received a takeover offer from CPE Capital and Macquarie’s Infrastructure unit valuing the company at $3.50 per share.
Industry competitor Cleanaway (ASX:CWY) also benefitted, finishing 3.6% higher, with private investors clearly attracted to the defensive income of waste management (Disclosure: I am a holder of CWY).
Mobile network operator and retailer Amaysim (ASX:AYS) received a slightly improved bid from WAM Capital, equating to $0.70 cents in cash or 1 new WAM share for every 2.675 AYS.
WAM Capital seeks to control the franking credits and proceeds received from the deal; shares finished 2.0% higher. This looks to be a reasonable price for a company operating in a highly competitive sector.
Record inflows for Hub 24 (ASX:HUB), Tyro (ASX:TYR) responds to Viceroy, iron ore upside
Independent platform operator Hub 24 (ASX:HUB) continues to attract financial advisers to its platform, recording a record $1.7 billion of inflows in the final quarter.
This took the assets in their custody to $22 billion, and closer to $31 billion once the recent purchase of Ord Minnett’s platform is included.
Average monthly inflows have hit $514 million with the so-called ‘Wexit’ or departure of advisers from Westpac, NAB and the CBA sending them to this lower cost, flexible option.
The platform now has 2,280 advisers using the platform, close to 10% of all registered advisers. Whilst clearly a fast growing business, valuation is always a query in such low margin, competitive industries.
Tyro Payments (ASX:TYR) responded to what it calls ‘key factual misstatements’ in the report by ‘research house’ Viceroy, highlighting massive discrepancies and noting they were never contacted for comment.
The share price rallied 25% on the news, which disputed details ranging from the number of terminals impacted, managements’ response and communication.
Rio Tinto (ASX:RIO) confirmed that iron ore exports will fall within their original guidance, whilst confirming volumes will increase in 2020.
UBS is now expecting earnings upgrades from RIO and Fortescue (ASX:FMG) with iron prices currently 60% above their forecasts for 2021.
US markets boosted by earnings, Microsoft (NYSE:MSFT) and GM (NYSE:GM) team up
US markets finished broadly higher after the long weekend, with the Nasdaq leading the way, adding 1.4% ahead of the S&P500 at 0.8%.
Microsoft (NYSE:MSFT) was in the headlines after reports it had invested US$2 billion into General Motors (NYSE:GM) self-driving car unit, Cruise, as they seek to speed up its route to market.
Microsoft joins Honda Motors and Soft Bank Corp as investors in the loss-making enterprise. The news sent GM to a record high, up 9.7%, as investors start to see the company as an automated rather than an old fashioned operator.
Bank of America (NYSE:BAC) was the latest to report earnings, with the bank delivering a quarterly profit of US$5.5 billion, down from US$7.0 billion in 2019.
Interestingly the bank benefited from an $826 million release from its loss reserves as mortgage delinquencies from COVID are far lower than expected.
