S&P/ASX 200 Friday – WBC, BKW & HMC shares in focus

The S&P/ASX 200 (ASX: XJO) is expected to open slightly higher on Friday according to the Sydney Futures Exchange. Here’s what’s making headlines.

Volatility settles in, ASX 200 falls

The market looks to be ending the week on a negative note, the ASX 200 falling 0.8% on Thursday, following a weak global lead. This was well above the lows of the session, at one point hitting -1.7%, with no sector spared.

Westpac Banking Corp (ASX: WBC) headlined the bad news, announcing it had agreed to the single largest fine penalty in Australian corporate history, a $1.3 billion hit. The fine related to the bank’s 23 million breaches of the anti-money laundering and associated financial crimes court case. Interestingly, Westpac shares finished just 0.2% lower, with the fine equivalent to one-quarter of profit. Shareholders are the ones paying the price after the bank’s decision to cut its dividends earlier this year.

Brickworks Ltd (ASX: BKW) delivered more positive news, a 93% increase in profit to $299 million, on the back of its investment in TPG Telecom Ltd (ASX: TPG) following the merger with Vodafone. Excluding the one-off profit, the company remains in reasonable shape, growing revenue by 4% and slightly increasing the dividend as its US brick investments begin making a real contribution to the business.

Featured video: ASX share ideas for October – Z1P, XRO & ALC

A-REITs offer shelter, Home Co. spin-off progresses

The A-REIT sector, down 0.2%, offered shelter from the broader market sell-off, with investors once again turning to the perceived security.

Home Consortium Ltd (ASX: HMC), which owns a series of healthcare, big box and other retail assets, announced progress on the demerger of its $800 million Daily Needs REIT. Shareholders will receive units in the separate trust, allowing management to continue their investments in the burgeoning health and aged care portfolio; some experienced dealmakers are behind this one.

As the impasse continues in the US, Treasurer Frydenberg reiterated that a budget surplus has been de-prioritised at least until unemployment is back below 6%, which may take several years to achieve.

Yesterday’s speech comes just two weeks out from the most anticipated budget in decades, with tax cuts, incentives and infrastructure spending high on the agenda. Despite the Victorian breakout, Australia is well-positioned for recovery as the rest of the world deals with their own second waves.

US markets eke out gains

US markets finished positive on Thursday, but well off their highs, the S&P 500 up 0.3% and the Nasdaq 0.4%. It was reported that the Democrats have crafted another much needed US$2.4 trillion stimulus bill in the hopes they can speed up the U-shaped recovery. This follows strong words from the Federal Reserve on the growing need for Government intervention.

Financials led the market higher, Goldman Sachs Inc. (NYSE: GS) adding 4.8%, suggesting Australian banks should be supported.

The Euro Stoxx finished lower after the French Government became the latest to impose restrictions, falling 0.7%. Airbus SE (EPA: AIR) was among the worst, down 3.5% as it appears travel will be pushed back even further.

Meanwhile, it seems going green isn’t a good move for one of the worlds’ largest fossil fuel companies, BP Plc (LON: BP) hitting a 25-year low after announcing it would be net-zero carbon emissions by 2050.

This article was written by Drew Meredith, Financial Adviser and Director of Wattle Partners. To get in contact with Drew, click here to visit the Wattle Partners website.

Free: Our Ultimate BNPL Sector Report

Afterpay, Zip Co, Sezzle… is BNPL the opportunity of a lifetime? Or is the sector a ticking time bomb? Our analyst’s 7,500-word report, Our Ultimate BNPL Sector Report, takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. You can get the full report right now (for FREE) by entering your email below, we’ll email it to you.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Free: Our Ultimate BNPL Sector Report

Afterpay, Zip Co, Sezzle… is BNPL the opportunity of a lifetime? Or is the sector a ticking time bomb? Our analyst’s 7,500-word report, Our Ultimate BNPL Sector Report, takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. You can get the full report right now (for FREE) by clicking the button below.

Disclosure: At the time of publishing, Drew owns shares of Zip Co and Disney.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.