Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
ASX gains 1.3% in bank-driven rally
ASX rallies on COVID treatment, travel takes off, real estate boom
The S&P/ASX200 (ASX: XJO) followed a strong global lead to finish 1.3% higher as investors digest Merck’s potential COVID-19 treatment.
Positive news in the vaccine rollout following Prime Minister Morrison’s border opening last week meant the consumer discretionary sector was among the top performers, up 1.7%.
Within the sector it was all about travel as Flight Centre (ASX: FLT) gained 9.6%, Corporate Travel (ASX: CTD) 3.3% and Webjet (ASX: WEB) 3.0%.
IDP Education (ASX: IEL) was another major beneficiary, up 8.6% with the student placement company ready for a boom as overseas students return.
It was another ‘value’ rally with the healthcare sector the only detractor as investors once again price in a strong economic recovery.
Shares in the Commonwealth Bank of Australia (ASX: CBA) jumped 5.1% after management confirmed the off-market buy back was four times oversubscribed.
$24 billion of shares were tendered for a $6 billion buy back with the 14% maximum discount applied.
The Board were forced to reduce all applications by 79.4% but will repurchase all shares of those holding less than 20 after the tender.
Evergrande halted, Nick Scali doubles size, Boral set to return $3 billion
Shares in Nick Scali (ASX: NCK) the furniture retailer jumped over 10.4% after announcing the acquisition of Plush Sofa’s from Greenlit Brands for $103 million.
The deal will double their store network from 46 to 108 as they seek to extract more margin out of their dominant position.
Shares in Boral (ASX: BLD) also added another 4.2%, as the Seven Group controlled entity continues to release value to shareholders.
Management confirmed as much as $3 billion in capital will be returned to shareholders in the coming months, representing almost half of their market capitalisation.
The group has successfully sold their US building products, roofing and potentially fly ash business into a strong US construction environment, bringing an end to their ill-fated expansion under the previous CEO.
The property sector was the other major beneficiary with open borders, between most of Australia and the rest of the world, along with less restrictions on movement set to hark a recovery in retail spending.
Vicinity Centres (ASX: VCX) finished 3.0% higher along with Scentre Group (ASX:SCG), up 2.4%, both of whom are shopping centre owners.
Tech sell off to 7 %, Facebook outages, Tesla boost
The selloff in US equities intensified on Monday despite positive news on COVID-19 treatments, with the Nasdaq down 2.4%.
The biggest detractor was the threat of higher inflation and a higher bond rate, effectively reducing the valuation or discount rates on high growth tech names.
The S&P 500 and Dow Jones both outperformed falling just 1.1 and 1.5% respectively as the oil price hit a new eight year high.
In Germany power contracts hit record levels. Facebook (NYSE: FB) was the major detractor, falling over 5% as the company deals with a bombshell interview from a whistle-blower questioning their censorship and approach to the safety of their users. The company also had a mass outage overnight.
General Motors (NYSE: GM) reported a big fall in third quarter sales as the semiconductor shortage hits supply.
On the other hand, Tesla (NYSE: TSLA) avoided the issues, delivering 241k, 73% higher than 2020 levels.
