Quiet Day on the ASX as We Wait for Quiet Aussies to Vote

As we head into the last week of the Australian federal election, it seems the ASX is following the lead of many Australians who are waiting to see how it all turns out.

Morrison is trying to rally what he calls the ‘quiet Australians’, who avoid politics until election season, to sway the votes into the Coalition’s favour.

Whichever way it goes, the market is sure to have some kind of reaction, so investors seem to be sitting on their hands until we get a better sense of what is to come, with no movements up or down exceeding 6% in this day of trading.

Furthermore, today’s biggest shakers, such as TPG Telecom Ltd [ASX:TPM] and Eclipx Group Ltd [ASX:ECX], don’t have any recent updates signalling their 5% moves today.

All that being said, there are still some things worth noting about today’s trading.

Today’s best and worst performers are both promising stocks

TPG is up 4.54% at time of writing, likely a result of a note from broker Ord Minnett, who have moved the telco company from a hold to a buy rating, and improved the price target to $6.90.

Ord Minnett analysts are clearly seeing potential in the company to overturn the ACCC’s recent court decision to block the $15 million TPG/Vodafone merger. The ACCC argued the merger would result in customers ‘paying higher prices’ for ‘less innovative’ mobile and broadband plans.

A positive day of trading so soon could suggest TPG will not be brought down by the call.

On the other end of today’s trading spectrum was Eclipx, whose shares have fallen 5.4%. However, rather than reflect poorly of the vehicle fleet management company, it seems today’s drop is more likely a result of investors taking profit.

Eclipx have had a big rally in share price over the last six weeks, being up over 70% since the end of March.

Three of the Big Four going ex-dividend

Australia and New Zealand Banking Group [ASX:ANZ], National Australia Bank Ltd [ASX:NAB] and Westpac Banking Corp [ASX:WBC] are all going ex-dividend this week, with the three of them releasing their interim dividend amount in their half-year results earlier this month. They are arguably the most sought after dividend on the ASX right now.

ANZ have declared a fully franked interim dividend of 80 cents per share, driven by strong profit growth and reduced operating expenses, to be paid out on 1 July.

NAB are offering a fully franked 83 cents per share dividend on 3 July, despite having a disappointing first half with a 20.6% decline in its Consumer Banking and Wealth sector.

Westpac have maintained its fully franked 94 cents per share dividend on 24 June, on the back of $3.3 billion cash profit in H1FY19, which was a shocking 22% less than the prior corresponding period.

Quarterly updates from REA Group and Qantas

The share price of online real estate conglomerate REA Group Ltd [ASX:REA] managed to remain stable today despite notable drops in Sydney and Melbourne listings. Demand for its premium advertising products and Hometrack business helped achieve a 7% revenue increase for the company to $198.6 million.

Unfortunately, it’s not such good news for Qantas Airways Ltd [ASX:QAN] who have been downgraded by Macquarie from outperform to neutral after releasing its Q3 update yesterday. According to the note from the broker, they believe the upcoming election and decline in corporate travel and consumer sentiment will make FY20 a difficult year for the airline. Qantas shares dropped 2.5% today.

Keep an eye on this space for more updates.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

PS: Perhaps today’s trade tells you that it’s the smaller end of the market where the near-term big gains could be. Check out this free report on the ‘Three Small-Cap Stocks to Own Right Now’ to see what tiny gems you may want to add to your portfolio. Download now.


Ryan Clarkson-Ledward is one of Money Morning’s junior analysts. Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects. Ryan’s primary focus is assisting Sam Volkering with background research and insight for readers by dissecting the latest events affecting the world. Working closely with Sam, they explore the latest in small-cap and technology stocks as well as cryptocurrency opportunities. You can find Ryan’s contributing research, developments, and supporting information across several e-letters, including:


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