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.
These are the border reopening’s biggest winners
After much deliberation, Australia has made the move to reopen its international borders to fully vaccinated tourists from February 21. Prime Minister Scott Morrison ended one of the world’s strictest and longest-running pandemic travel restrictions, saying, “It’s almost two years since we took the decision to close the borders to Australia.”
The impact of Australia’s border reopening will have a distinct effect on certain sectors of the Australian stock market, predominantly the local tourism industry. To delve deeper into the knock-on effect, senior analyst at Forager Funds Management, Alex Shevelev has released a research note examining the impact.
Overall, Shevelev agrees tourism operators will be punching the air in delight, as the announcement brings life back into the sector. “This move continues the reopening of Australian borders to the world. Tourism operators, large and small, will now have more confidence to begin preparing for international arrivals. While the recovery will be gradual, the industry will be hoping that the initial trickle of tourists will be followed by a torrent of arrivals. Importantly, many operators have lowered their cost bases and will be more profitable when arrivals approach pre-COVID levels.”
Shevelev goes one step further and shares some of his star picks that are likely to benefit the most this reopening. He says, “Companies like skydive and Great Barrier Reef tour operator Experience Co. (ASX:EXP) and recreational vehicle owners Tourism Holdings (NZX:THL) and Apollo (ASX:ATL) have struggled through the COVID travel decimation for two years, while working to improve their businesses. When tourists return they will be well positioned to finally benefit.”
Forager Funds Management runs two funds on behalf of retail investors – an Australian Shares Fund and an International Shares Funds. The team holds both Tourism Holdings and Apollo. It has about $400 million of funds under management, with a focus on long-term investing and staying nimble enough to invest in smaller listed companies.
