Investment Ideas From the Edge of the Bell Curve
The Australian share market gained today after a late rally in mining stocks, spurred by new stimulus measures announced in China over the weekend.
The ASX 200 closed +0.5% higher at 8,252.2 points, less than 20 points shy of the closing high of 8,269.85 set on September 30.
Mining stocks were behind much of the rise, pushing 1.3% higher late in the session as traders ultimately sided on a more positive outlook for the Chinese economy after its Ministry of Finance detailed more incremental government support to stimulate the nation’s ailing economy.
The MoF declined to detail the hard figures on the scale of the fiscal stimulus, as some in the market had hoped. Nonetheless, many noted signs of further stimulus measures are likely ahead.
Iron ore futures slipped as much as 1% in the opening minutes of trading only to close the session 0.3% higher at US$106.50 per tonne by the end of the session.
BHP added 0.9% to $43.80, Rio Tinto rose 1.2% to $121.00, and Fortescue gained 2.8% to hit $20.02.
Gold miners were among the best performing on the ASX: Regis Resources added 6% to $2.29, Bellevue Gold rose 4.4% to $1.42 and West African Resources gained 3.8% to $1.50.
The precious metal added around 1% to US$2,656.29 an ounce in last week’s final session before holding much of that gain during trading.
Here’s the latest from our Fat Tail Daily video series.
Publisher James ‘Woody’ Woodburn sits down with our editors to discuss the key trends traders are looking at and offer unique insights into market movements.
In the latest video, James spoke with Alpha Tech Trader and Crypto Capital Editor Ryan Dinse.
The global tech industry has minted more billionaires in the past two decades than any other. That’s no secret.
But here’s the thing…
Not only have the gains been humungous, but the speed upon which such gains have been made have been unbelievably fast too.
In today’s Fat Tail Daily, tech editor Ryan Dinse goes over one famous example and the lessons you can apply as an investor in tech.
Warning: The old rules don’t apply!
To read Ryan’s original article, click here.
Click below to watch the discussion.
Pacific Smiles [ASX:PSQ] has announced Gary Carroll as its new managing director and chief executive officer.
Carroll brings leadership experience to the role, having previously served as CEO of MindChamps Australia, which operates 21 early learning and preschool services across NSW and Victoria.
Prior to that, he held the position of CEO at ASX-listed education provider G8 Education from 2017 to 2022.
Carroll’s appointment comes in the wake of Andrew Vidler’s resignation last month after a brief eight-month tenure. Vidler’s departure followed closely on the heels of the chief financial officer’s exit earlier this year.
These leadership changes occurred after shareholders rejected a $327 million takeover bid from private equity group Crescent Capital during a scheme meeting on August 8.
Carroll now steps in to lead Pacific Smiles through this period of transition, with questions remaining on the group’s next moves for growth.
Its shares are trading slightly higher today, up +1.4% this afternoon at $1.865 per share.
Job search giant Seek [ASX:SEK] has made a takeover bid for Xref [ASX:XF1], a smaller competitor listed on the ASX. Xref specializes in HR and recruitment technology solutions.
The offer from Seek stands at 21.8 cents per Xref share, valuing the proposed acquisition at approximately $45 million.
Xref’s board of directors has expressed support for the potential deal.
Both companies have now entered a due diligence phase, which they anticipate will take about four weeks to complete.
Shares of both are up on the news, with Xref jumping over 50% in trading today.
In a big move set to reshape Australia’s telecommunications landscape, Vocus Group has successfully acquired TPG Telecom’s fibre network assets for $5.25 billion.
The acquisition will see Vocus add 24,000km of TPG’s urban fibre networks to its existing 27,000km, creating a more comprehensive national network that spans both urban and regional areas.
This expanded infrastructure connects almost 20,000 buildings in Australia’s capital cities, positioning Vocus as a stronger competitor in serving business, government, and wholesale customers.
Vocus interim CEO Jarrod Nink hailed the agreement as ‘transformative,’ emphasising its potential to create a more competitive telco landscape.
The deal values these assets at around $5.25 billion, with TPG expecting to receive between $4.65 billion and $4.75 billion in cash proceeds.
Beyond the urban fibre networks, Vocus will also acquire TPG’s 7000km submarine cable running from Sydney to Guam and the Vision Network wholesale residential broadband business. This comprehensive asset transfer significantly bolsters Vocus’s position in the market.
Despite the sale, TPG will maintain access to the networks for its mobile services through a long-term agreement. Vocus will provide fixed network services to TPG for $130 million annually over a 15-year contract, ensuring continuity for TPG’s operations.
The deal’s completion is subject to regulatory approval from both the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board (FIRB). The companies are targeting the second half of 2025 for the transaction’s closure.
TPG’s shares are down by -2.26% this afternoon, trading at $4.975 per share.
The Australian share market is approaching record levels, propelled by strong performance in US markets.
The ASX 200 is up +0.46% to 8,252 points near midday, just shy of its all-time closing high of 8,269.85 set on September 30.
Banks are performing well, up 0.5%, following record-breaking results from US banks that pushed the S&P 500 to new highs.
China’s latest stimulus measures, announced by the Ministry of Finance over the weekend, fell short of market expectations, leading to a dip in oil and iron ore prices. The need for further economic support was underscored by weaker-than-expected Chinese inflation data, with the Producer Price Index contracting 2.8% year-on-year.
Gold miners are among the top performers on the ASX, with Regis Resources, Bellevue Gold, and West African Resources all up around 3%.
The price of gold rose 1% to US$2,656.29 an ounce in the previous session before slightly retreating at the start of Monday’s trading.
Several stocks are making significant moves. Web Travel Group, recently demerged from Webjet, plummeted 29.5% to $4.96 following a disappointing results update.
TPG has agreed to sell its fibre network to Vocus Group for up to $5.25 billion, with its shares down 0.7%.
Seek has made a $45 million buyout offer for Xref, causing Seek’s shares to rise 1.5% and Xref’s to soar 57.4%.
Lifestyle Communities‘ shares fell 3.4% after the company announced the upcoming departure of its managing director and co-founder. Appen’s stock slipped 2.8% following the closure of its $50 million capital raise.
Recent Webjet spinoff WEB Travel Group [ASX:WEB] is this morning’s biggest loser as its shares fall over 30%, trading around $4.86 per share.
The drop comes after a disappointing update on its 1H25 results.
Web Travel was recently spun off its larger online travel agency business, Webjet Group [ASX:WJL], last month as the major outperformer in the group.
Web Travel’s business is focused on WebBeds, a system that connects hotels and other travel providers with travellers worldwide.
Investors are hitting the sell button this morning after the company reiterated issues it raised at its recent AGM around margins.
Headwinds in the first half of the year included the collapse of German tour operator FTI Group, the Paris Olympics and the European Football Championship.
Management said that after its AGM update, European margins have remained subdued. Overall margins are further impacted by customer financial incentive agreements that are under review.
The company now forecasts 1H FY 2025 TTV/revenue margins to be around 6.4%. That’s down from the 7% expected at the AGM in August.
The company lowered its WebBeds 1H FY 2025 preliminary underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) margins to around 44%. That’s down from the prior guidance of 52%.
Management said this downgrade reflects lower revenue and a 15% year-on-year increase in operating expenses.
The company said it expects expenses in the second half of the financial year to be similar to those in the first half.
On a positive note, the company highlighted that WebBeds TTV is up 26% from 1H FY 2024, while bookings are up 22% yearly.
Here’s the latest from our Fat Tail Daily video series.
Publisher James ‘Woody’ Woodburn sits down with our editors to discuss the key trends traders are looking at and offer unique insights into market movements.
In the latest video, James spoke with Strategic Intelligence Editor Nick Hubble.
Here they are discussing taxes here and around the world.
Nick argues higher taxes won’t raise more revenue. Only leaving spending cuts to deal with the threat of too much debt.
Will be a big lesson for Australia?
Nick Hubble gives his take…and the investment implications of both outcomes.
To read Nick’s original article, click here.
Click below to watch the discussion.
Market optimism for a massive cash injection from Chinese authorities to revitalise the country’s struggling economy has waned following the Ministry of Finance’s latest announcement.
Over the weekend, the ministry unveiled another round of incremental stimulus measures, but stopped short of providing specific figures or a comprehensive fiscal commitment, leaving many market participants underwhelmed.
The new stimulus package includes plans to significantly increase government debt, provide subsidies for various sectors, replenish bank capital, and support the property market through a new bond-buying scheme.
However, the lack of concrete numbers has led to scepticism among traders and analysts.
Ben Cleary, portfolio manager at Tribeca Global Natural Resources Fund, remains cautiously optimistic about the stimulus measures.
‘The biggest risk is that it’s all talk and we don’t get any material follow through,’ he said. ‘But everything says to me that this is a pivot, and we’ll see the rubber hit the road. But it will be incremental.’
Meanwhile, Macquarie’s chief China economist, Larry Hu, suggests that expectations for a ‘bazooka‘ stimulus were unrealistic from the start.
The economic context surrounding these measures is challenging. China’s 5% annual growth target appears increasingly elusive, with recent data showing consumer and producer price indexes underperforming expectations.
The Producer Price Index (PPI) contracted 2.8% year-on-year, its weakest level since April, further highlighting the struggles faced by the Chinese economy.
These developments have big implications for Australia’s commodity exporters. Recent rallies in iron ore and other commodity prices may lose steam, potentially affecting ASX mining giants like BHP, Rio Tinto, and Fortescue.
ASX 200 opened higher today after the Ministry of Finance briefing, but reactions in the coming days may be volatile as investors digest the implications of China’s stimulus efforts.
As the market assesses China’s economic maneuvers, attention is shifting to Australia’s upcoming jobs data. The September unemployment rate is expected to hold steady at 4.2%, a crucial indicator for the RBA as it maintains interest rates at 4.35% to control inflation.
Westpac’s chief economist, Luci Ellis, anticipates the job market data will confirm a gradual softening but still tight labour market, potentially supporting the RBA’s current policy stance.
Ellis explains, ‘The gradual uptrend in unemployment since late 2022 has mainly come via stronger growth in labour supply rather than a lift in firing. This is a desirable scenario from a policy perspective, serving almost as the very definition of a ‘soft landing.’
As global markets continue to watch China’s economic moves, the coming weeks will be crucial in determining whether these incremental stimulus measures can effectively boost the world’s second-largest economy and, by extension, impact Australian trade and financial markets.
Good morning. Charlie here,
The ASX is poised for a positive start to the week, opening up +0.26% to 8,235.8 on the heels of a robust performance in global markets, particularly in the United States, where the S&P 500 posted its 45th record close of the year.
Better-than-expected earnings reports from major U.S. banks, including JPMorgan and Wells Fargo largely drive the positive sentiment.
This strong start to the U.S. earnings season has boosted investor confidence globally, with the financial sector leading the charge.
The S&P 500 climbed 1.95% overnight, which could bode well for ASX-listed banks and financial institutions.
The ASX 200 Financials Index rallied 2.4% last week amid oversold conditions and a rotation back into banks. With the positive momentum from U.S. financials, we might see this trend continue in the Australian market.
In the commodities space, aluminium stocks are set to shine today. Reports suggest that Emirates Global’s bauxite exports from Guinea were halted over the weekend, causing aluminum prices to rally as much as 3.8% before settling 1.8% higher. This development could benefit ASX-listed companies like South32, which has exposure to the aluminium market.
On the corporate front, there’s notable news from TPG Telecom, which has announced the sale of its fibre and fixed EGW assets to Vocus for $5.25 billion. This significant transaction is likely to attract investor attention and could impact the broader telecommunications sector.
Investors should also be aware of several stocks trading ex-dividend today, including Clime Capital, Civmec, and Star Combo Pharma. Throughout the week, we’ll see more companies go ex-dividend, including Harvey Norman and Washington H Soul Pattinson.
Looking at the broader economic picture, recent data from China shows persistent deflationary pressures in September, with inflation up 0.4% year-on-year while producer prices stood at -2.8%. This ongoing economic challenge in Australia’s largest trading partner could have implications for export-oriented ASX-listed companies.
On a positive note, Bank of America reported US$39 billion flowed into Chinese equities last week, recommending buying on China dips.
This surge in foreign investment into Chinese markets could potentially benefit Australian companies with significant exposure to China.
As we start the week, it’s worth noting that strategists expect the bull market to continue into 2025, supported by strong earnings growth and a solid economy. It seems the soft landing narrative is alive and well in the mind of the market.
Name | Value | % Chg | |
---|---|---|---|
Major Indices | |||
S&P 500 | 5,815 | +0.61% | |
Dow Jones | 42,868 | +0.97% | |
NASDAQ Comp | 18,342 | +0.33% | |
Russell 2000 | 2,234 | +2.10% | |
Country Indices | |||
UK | 8,253 | +0.19% | |
Germany | 19,373 | +0.85% | |
Euro | 5,003 | +0.68% | |
Japan | 39,605 | +0.57% | |
Hong Kong | 24,964 | +2.98% |
Name | Value | % Chg | |
---|---|---|---|
Commodities (USD) | |||
Gold | 2,648 | -0.30% | |
Silver | 31.16 | -1.24% | |
Iron Ore | 107.50 | +1.21% | |
Copper | 4.3960 | +0.25% | |
Brent Oil | 77.67 | -1.73% | |
Currency | |||
AUD/USD | 67.36¢ | -0.20% | |
Cryptocurrency | |||
Bitcoin (USD) | 62,930 | -0.50% | |
Ethereum (USD) | 2,472 | -0.35% |
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Investment ideas from the edge of the bell curve.
Go beyond conventional investing strategies with unique ideas and actionable opportunities. Our expert editors deliver conviction-led insights to guide your financial journey.
All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.
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