The S&P/ASX 200 (INDEXASX: XJO) is expected to open flat on Wednesday following subdued results overnight. Here’s what ASX investors need to know.
Rally continues
Global share markets continued their incredible rally even as protests and riots continued in the US following President Trump’s call to bring in the military. The Dow Jones added 1% and the S&P 500 0.8% with two companies increasing for every one that fell.
The highlights remained the cyclical businesses with American Express (NYSE: AXP) and Caterpillar (NYSE: CAT) pushing higher as shutdowns eased.
The ASX 200 recovered 0.3% despite a mixed day on Thursday, with most sectors flat it was the retail exposed businesses like Unibail-Rodamco-Westfield (ASX: URW) moving higher. The likelihood of another $500 billion in stimulus in Europe sent the Eurostoxx up over 2.6% on the back of a strong banking sector, ING Groep (NYSE: ING) rallied 3%.
Zooming up
Zoom Video Communications (NASDAQ: ZM), the platform that has become ubiquitous during this Work From Home (WFH) experience, continued its incredible rally hitting another all-time high and tripling in 2020. Management reported a 169% increase in quarterly revenue to $328 million and now expects the full-year result to be $1.775 billion, double that originally forecast.
Australia’s own technology darling Zip Co Ltd (ASX: Z1P), one of the few competitors to Afterpay Ltd (ASX: APT), rallied close to 40% on Wednesday after announcing the acquisition of New York-based Buy Now Pay Later (BNPL) platform Quadpay for $403 million. The acquisition will be funded from a $200 million capital raising and position ZIP as a truly global player in the sector with some $3 billion in total transaction value expected.
Virgin’s take off
Virgin Australia Holdings Ltd’s (ASX: VAH) potential suitors was reduced to just two parties on Tuesday, with Bain Capital and Cyrus Capital Partners the lucky two. Both have indicated a preference to retain the Virgin branding and will seek to partner with Richard Branson.
Elsewhere, the Kerry Stokes-owned Seven Group Holdings (ASX: SVW) announced it had acquired a substantial but ‘friendly’ stake in embattled cement producer Boral Ltd (ASX: BLD) once again opening the discussion on acquisition activity.
Amaysim (ASX: AYS), the provider of low-cost mobile phone plans as well as energy deals through its Click Energy business, refused to comment on rumours of a takeover offer from Origin Energy Ltd (ASX: ORG). However, that didn’t stop the Amaysim share price from increasing 12% for the day.
Finally, Wednesday will see the long-awaited GDP figures for the Australian economy, with experts predicting a contraction of just 0.2% to 0.3%.
This report was written by Drew Meredith, Financial Adviser and Director of Wattle Partners.
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