The Match Out: ASX drifts lower. AMP loses court action, UBS upgrades Telstra

The daily Match Out for Wednesday 5 July with James Gerrish of Market Matters.
James Gerrish

Market Matters

It was a weaker session for the ASX, and with no lead from the US, we were left to key off marginally softer European markets, while Asian stocks also tracked lower during our time zone. Banks lost some of yesterday’s gains, while property stocks also fell.

  • The ASX 200 dipped -25pts/ -0.35% to 7253
  • The Communications sector was best on the ground (+1.06%) while Utilities (+0.62%) were also strong.
  • Healthcare (-0.83%) and Financials (-0.63%) were the weakest links.
  • Telstra (ASX: TLS) was good today after UBS upgraded to a BUY rating and $4.75 PT. we own TLS in our Income Portfolio and remain bullish.
  • AMP -6.14% was down after losing two test cases in the Federal Court regarding the buyer of last resort (BOLR) program.
  • AustralianSuper is finally revaluing (down) some of their direct office exposures by around 10%. For the year, the huge $300bn fund returned 8.22% in its default option.
  • Johns Lyng Group (ASX: JLG) was halted raising $65 million at $5.15 to buy Smoke Alarms and LinkFire to boost subscription-based revenue. The final price represented a 5.2% to last. Well covered, we hear.
  • Citi downgraded earnings expectations on both HUB24 (ASX: HUB) -2.9% and Netwealth (ASX: NWL) -3.79% cutting net flow forecasts by 5-10% for HUB & 3-6% for NWL based on lower client activity levels and increased allocation to term deposits.
  • AGL (ASX: AGL+2.37% has broken to new 52-week highs, closing today at $11.25 – this has been a good one for us and we continue to hold.
  • National Australia Bank (ASX: NAB) is still calling 2 more rate hikes this year taking cash rates to 4.6% - we doubt this will prove accurate with MM expecting one more move at most.
  • Elders Limited (ASX: ELD) +4.8% continued to run today opening flat before grinding higher throughout the session – another example of an FY23 ‘dog’ starting to move.
  • We covered FY23 Performance for the suite of Market Matters Portfolios in this morning’s Portfolio Positioning Report.
  • For FY23 the Flagship Growth Portfolio returned +24.34%, which comprised of +19.96% growth and +4.38% income. This was +9.56% ahead of its benchmark of +14.78%. (S&P/ASX200 Accumulation Index)
  • The Active Income Portfolio returned +12.23%, which comprised of +4.61% growth and +7.62% income. This was +5.64% ahead of its benchmark of +6.59% (RBA Cash +4%).
  • The International Equities Portfolio returned +25.57%, comprised of +22.41% growth, +1.43% income & a currency benefit of 1.73%. This was +4.04% ahead of its benchmark of +21.53% (MSCI World AUD).
  • The Emerging Companies Portfolio returned +8.84%, comprised of +6.83% growth and +2.01% income. This was +0.39% ahead of its benchmark of +8.45% (Small Ords Accumulation Index)
  • The domestic portfolios are open for investment via a simple Online Application Process. Portfolios are charged 0.85% per annum incl GST, which includes all brokerage & reporting. i.e. no additional (hidden) costs, while you can also track your progress/returns via the website. A specialist Smartphone Ap launching soon! NB: The portfolios are aligned with the published portfolios but may not track them ~100% due to timing.
  • To sign up for our Free Market Matters | Invest Monthly Portfolio Reports, click here.
  • Iron Ore was a touch lower in Asia trading at US$113/dmt
  • Gold was up overnight to ~US$1927 before tracking down -US$5 in Asian trade today, settled $US1922 at our close.
  • Asian stocks were mostly lower Hong Kong was off –1.6%, Japan was flat, while China was off -0.55%
  • US Futures are down, around -0.20%

ASX 200 chart

AMP $1.07

AMP -6.14%: the wealth management company struggled today after losing two test cases in the Federal Court regarding the buyer of last resort (BOLR) program. A number of financial advisers have taken the company to court in a class action after AMP reduced the multiple it paid advisors for their business. AMP has the option to appeal however it would appear difficult to overturn the decision which will have knock-on effects for the dozens of remaining advisors tied to the case. The initial case has awarded payouts of over $800k to the lead applicant, and over $100k to a sample member, but these numbers could only be the tip of the iceberg if these decisions are upheld.

Broker moves

  • Silver Lake Raised to Outperform at RBC; PT A$1.50
  • Costa Cut to Neutral at Macquarie; PT A$3.43
  • Costa Cut to Reduce at CLSA; PT A$3.50
  • Aurizon Cut to Hold at Morgans Financial Limited; PT A$3.95
  • Winsome Resources Rated New Speculative Buy at Canaccord
  • Costa Cut to Hold at Bell Potter; PT A$3.50
  • Technology One Rated New Accumulate at CLSA; PT A$17.30

Major movers today

Have a great night,

The Market Matters team.

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James Gerrish
Portfolio Manager
Market Matters

James is the Lead Portfolio Manager & primary author at Market Matters, a digital advice & investment platform with over 2500 members that offers real market intel & portfolios open for investment. He is also a Senior Portfolio Manager at Shaw and...

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