26 October 20
Subscribers questions (CCL, BUB, MP1, EHL, AZS, HLS, ASM, ARF, BLD, TYR, IGL, COPX US)
26 October 20
Subscribers questions (CCL, BUB, MP1, EHL, AZS, HLS, ASM, ARF, BLD, TYR, IGL, COPX US)
25 October 20
Market Matters Weekend Report – prepare for a move into Christmas
23 October 20
Big miners drag ASX into the weekend
23 October 20
Are the likes of REA Group & Carsales.com worth chasing? (MMM, OZL, CSL, JBH, REA, DHG, CAR)
22 October 20
Market recovers from lows, OZL prduction strong, Adore lists tomorrow @ midday (TPW, OZL, HLS)
22 October 20
Tapping into China’s impressive economic growth – who do we like? (MP1, Z1P, APT, ORE, WSA, FMG, A2M)
21 October 20
Stocks edge marginally higher, Energy leads, TPW & MP1 hit hard (TPW, MP1, PPS)
21 October 20
Income Note: Finding yield as rates continue to slide (BHP, CBA, SIQ)
21 October 20
Overseas Wednesday – International Equities & Global Macro Portfolio (APT, Z1P, XOM US, MSFT US, UBS US, QQQ US, DBA US)
20 October 20
Market drifts lower, Westpac does deal with Afterpay, BHP production inline (BHP, APT, Z1P, WZR)
This week stocks are likely to kick off on the back foot following further declines on Wall Street, the SPI futures are targeting a fall of around -0.6%. However, with the financials holding well in the US and copper making fresh 2-year highs there are likely to be some decent pockets of support this morning. Also the COVID numbers continue to improve with Victoria only recording 14 new cases yesterday and 2 in NSW, Australia appears to have again shut out the virus but until a vaccine is established how can we operate our day to day lives without creating further outbreaks is my first question. The other is how can we reconnect to the rest of the world as they struggle with 2nd waves and potentially more due to their more open policies.
Over the weekend President Trump appears to have given his blessing for Oracle to takeover TikTok providing the buyers with instant access to a social media foothold – I don’t expect many unpopular decisions out of the White House with only 54 days left before the election. Last night Sportsbet had Joe Biden at $1.80 favourite compared to Trump at $2.00, its rapidly getting too close to call. The markets likely to rally if Trump and the Republican Party nudge ahead, just read some of Bidens rhetoric, it doesn’t bode too well for stocks:
“Throughout this crisis, Donald Trump has been almost singularly focused on the stock market, the Dow and Nasdaq. Not you. Not your families,” Joe Biden last week in Pennsylvania.
With plenty of uncertainty around we feel more choppy action is likely on the index level although as we approach support ~5750 MM remains comfortable with our bullish equities’ exposure. Importantly over the next fortnight almost $9bn worth of dividends are paid into investors bank accounts and a decent chunk of this usually finds itself being deployed back into the stock market helping the seasonally strong period for local stocks.
MM remains bullish Australian stocks short-term.
ASX200 Index Chart
The “Aussie” continues to defy its doubters and trade around its highs of the last 2-years. Moving forward short-term we anticipate one more decent challenge of 74c before we see some rotation /consolidation. This implies the resources might be getting tired on the upside, at least for now but the picture looks good over the next 12-18 months with our target still above 80c, or more than 10% higher.
MM remains bullish the Australian Dollar medium-term.
Australian Dollar ($A) Chart
Thanks again for the much-appreciated questions, as we’ve said previously were delighted to have such an engaged subscriber base.
“Hi James and team. Excellent announcement by WSA, not only because of the copper and nickel but the other associated elements. I read about the Pt and Pd concentrations and this is the bit I like. Little comment is generally made about these "by-products" - but they handsomely pay for the Ni and Cu processing. In fact I’d like WSA for its PGM capability and accept the base metals as by-products. Pt and Pd are the key elements that go into catalytic convertors for ICE cars and will be key to hydrogen fuel cells. So, all round an exciting announcement.” - Cheers, Jan P
WSA did deliver a solid result in last August which revealed a 14.8% lift in sales revenue to almost $310m, the nickel producer just needs Ni its main income stream to follow the likes of copper significantly higher. Guidance was encouraging from the board, but the stock hasn’t really embraced news as it continues to drift. The company then followed this up with a healthy update on its Odysseus mine earlier this month as you mentioned but again the stock hasn’t rallied as we would have hoped – a little patience feels required at this stage.
MM likes WSA, especially medium-term.
Western Areas (WSA) Chart
Nickel ($US/MT) Chart
“Dear James, I found the MM Newsletter very valuable. My trading is in front following your suggestions. Thank you. 2 questions: 1. Can I have your view on MNY (Money3) in the BNPL sector? 2. Is there a min. amount for joining your International Port Folio?” - Regards Gregory C.
Great news, adding value as at the end of the day our ultimate goal. MNY is a $370m niche provider of finance more akin to a traditional alternative finance business than a buy now pay later offering. The companies market advantage comes from not trying to be a one stop shop for everything, they focus on specific areas where they look to be the best especially from a service perspective etc, they currently have more than $1bn worth of vehicles financed under its umbrella.
The companies latest report showed a ~35% lift in revenue to $124m, they’re cheap while yielding ~4% fully franked making it a good candidate as a small cap candidate for an investor’s portfolio. However, after a strong period for car sales I can see things leveling off as the next chapter of the COVID tale unfolds hence entry levels may improve.
I spoke about this stock with Jono Higgins from Shaw a few months ago: Click here
MM likes MNY especially into weakness.
Money3 Corp Ltd (MNY) Chart
Regarding our international portfolio, it is listed on the MM website and subscribers can follow it in part or in full. For those that are looking for a broker to execute international orders, we can assist through Shaw and Partners, brokerage is charged on a per trade basis. Taking it a step further, if you are looking for my team and I to manage a portfolio of international stocks for you, (through Shaw and Partners), there is a $350k minimum investment.
At this stage we do not offer the international portfolio as a Separately Managed Account (SMA) as we do with the Growth & Income Portfolios. About the MM SMA’s
“Hi MM, I have a few questions about resource explorers, mostly how do you determine when to sell and at what price? In particular DEG and KAI which have had a good run? Also PAN which has jumped? The resources webinar you held was great thank you. ATU, SVY & STA, which were favoured picks, what would be a sell price for them or let them run for 12-months?” - Cheers, Jill C.
The reason to sell should be part of initial plan when any stocks are purchased i.e. “plan your trade and trade your plan”. However, news both on the stock, sector and macro level can always change the backdrop and investment decisions need to be fluid and flexible, as well as disciplined which is why it can be tough at times. Importantly running profits and cutting losses is a vital ingredient to successful investing although in the more “speccy” end of town aggressive gains can often vanish as fast as they arrive hence we often advocate taking a little part profit along the way.
For example DEG shown below has exploded in 2020 and we would be using technical stops below $1.45 and / or considering taking a little part profit at current levels – in other words we use technical triggers as an important part of our armoury in these circumstances.
In terms of ATU & STA specifically, both are likely to have looming catalysts which could be positive for the share price.
De Grey Mining Ltd (DEG) Chart
“Hello James and crew, Just re Income Portfolio, have you considered Janus Henderson (JHG). I know you scotched it from your International Portfolio, but here it trades on a P/E of 8.1 times, has a Div. Yield of 7.7% EPS of $3.25 and a 12 month DPS of $2.05 (unfranked) paid quarterly.
Unless there is some underlying problem with JHG it looks pretty good value to me – your thoughts?” - Cheers, Mick H.
JHG does undoubtedly tick many boxes for our Income Portfolio on paper although if it keeps losing FUM (funds under management) the dividend will unfortunately decline. The largest issue is undoubtedly that of capital preservation as can be seen from the chart below, its already lost ~25% over recent months. Also, we already hold Perpetual (PPT) in the portfolio which has struggled implying to us it’s too early to jump on fund managers at this stage in search of yield.
MM is neutral JHG.
Janus Henderson (JHG) Chart
“I notice Aussie Broadband are listing on the ASX soon, I have been with them for years, they are a hot little business, what are your thoughts. The shares are being offered at a $1 each.” - Thanks for the good work, regards Tom A
Aussie broadband is looking to raise $30-$40m and from what I understand it will likely be a very good IPO. Stock was very scarce in the institutional component of the raise and now the retail component is being prioritised to their customer base, which is a smart way to do it in MM’s view. The company are in growth mode and will not be paying a dividend any time soon.
The sector has been struggling over recent years and although MM has just dipped our toe in the water with Vocus (VOC) and Telstra (TLS) in 2 portfolios hence while the sector underperformance cloud has not fully evaporated we believe its approaching fast.
MM is positive the raise.
Telstra (TLS) Chart
“How weird. You guys trimmed SSM while Lincoln indicators re initiated coverage of SSM” – Regards Frank M.
By definition that’s what makes a market, for every buyer there’s a seller etc. Our decision to sell was more about the expectation for better relative performance in what we bought, while we’re comfortable to have sold out of SSM it doesn’t mean we won’t re-enter again in the future, were comfortable acknowledging when we are wrong and buying a stock at a higher price than we exited.
MM is neutral SSM.
Services Steam (SSM) Chart
“Hi, are you still positive about the AUD and what time frame are basing your judgements on.” – Cheers Peter W.
MM remains bullish the $A medium-term targeting the 80c region although a period of consolidation after recent aggressive gains would not surprise. The main timeframe we are looking at here is the monthly chart shown below where at the very least we are looking for an ongoing correction of the 10-year decline from 1.10 to 55c – our initial target remains the 80c region.
MM is bullish the $A.
The Australian Dollar ($A) Chart
“Hi James and Team 1. CSR has had a good run up recently. What is the current price target for CSR and would you be holding for further upside? 2. WZR - (WISR Ltd) I purchased at 20cents - seen it as high as 27.50cents and fall back to 18 cents. Do you still see this as a Buy? What is your current view?” - Regards Debbie G.
1 – we like CSR and the building sector at current levels, I could easily see a retest of $5 as many governments pour stimulus into the global economy.
CSR Ltd (CSR) Chart
2 – WZR is back to an area where the risk / reward is interesting, we could consider an aggressive play with stops under 15c, the recent share price weakness seems to be a result of the lack of commentary about current trading conditions to start FY21. The FY20 result delivered in August were slightly ahead of expectations, however they didn’t provide any detail / trends about what’s happening at the start of FY21, as most companies did. We think that’s a missed opportunity, investors have been spooked and sold. From what we understand, the business is still tracking along well.
Wisr Ltd (WZR) Chart
“Hi Adam, what are your thoughts on MyState (MYS)” - Regards Randy JC.
Credit union MYS enjoyed a nice advance last week after enduring a tough year. A recession and excessive loan defaults is bad news for MYS hence the struggle street since the coronavirus hit town. The stock now looks interesting technically with stops under $3.50, I would term it a second variation on the recovery play.
MM is neutral / positive MYS.
MyState Ltd (MYS) Chart
“Hi James, if I recall correctly, some weeks ago you suggested that ZIP were going into the ASX200 this month. Is that still a possibility and if it does will it have an impact on the share price?” - Thanks Colin H.
Z1P was actually added to the ASX200 at the start of September. The influence is generally positive given large cap managers can spread their BNPL exposure across APT and Z1P, however we also see some small cap managers offload them as a consequence of being added to the 200. Overall a net positive in my opinion but it currently pales into insignificance compared to the underlying sentiment driven volatility in the tech and BNPL space.
MM is bullish Z1P around $6.
Zip Co Ltd (Z1P) Chart
“Hi MM. First question submission from a 2+year subscriber. I hold some CLW Charter Hall Long WALE REIT. They are doing a SPP to fund purchase of petrol stations in New Zealand leased to BP plc. I am considering selling half my MQGPD which you were not so supportive of recently or all my SCG Scentre Group which may be short on distributions for some time to fund a SPP application. I think CLW is looking at a 5.7% distribution. Do you think this is a worthwhile swap, esp from an income perspective.” - Best wishes to all working there. Peter D.
A reminder that we provide general advice around views only and don’t take into consideration individual investor circumstances.
1 – MM does intend to participate in the SPP, especially as the underlying stock looks great as its rallies above $5.
2 - At this stage MQGPD still does screen expensive to us and we are considering cutting it.
Hopefully that simple summary conveys our opinion on the potential switch, we like it.
Charter Hall REIT (CLW) Chart
Have a great day
James & the Market Matters Team
Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday, or after the session when positions are traded.
All figures contained from sources believed to be accurate. All prices stated are based on the last close price at the time of writing unless otherwise noted. Market Matters does not make any representation of warranty as to the accuracy of the figures or prices and disclaims any liability resulting from any inaccuracy.
Reports and other documents published on this website and email (‘Reports’) are authored by Market Matters and the reports represent the views of Market Matters. The Market Matters Report is based on technical analysis of companies, commodities and the market in general. Technical analysis focuses on interpreting charts and other data to determine what the market sentiment about a particular financial product is, or will be. Unlike fundamental analysis, it does not involve a detailed review of the company’s financial position.
The Reports contain general, as opposed to personal, advice. That means they are prepared for multiple distributions without consideration of your investment objectives, financial situation and needs (‘Personal Circumstances’). Accordingly, any advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not any advice is appropriate for your Personal Circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of a financial advisor. Market Matters or its author(s) accepts no responsibility for any losses or damages resulting from decisions made from or because of information within this publication. Investing and trading in financial products are always risky, so you should do your own research before buying or selling a financial product.
The Reports are published by Market Matters in good faith based on the facts known to it at the time of their preparation and do not purport to contain all relevant information with respect to the financial products to which they relate. Although the Reports are based on information obtained from sources believed to be reliable, Market Matters does not make any representation or warranty that they are accurate, complete or up to date and Market Matters accepts no obligation to correct or update the information or opinions in the Reports. Market Matters may publish content sourced from external content providers.
If you rely on a Report, you do so at your own risk. Past performance is not an indication of future performance. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Market Matters disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.
Financial Services Guide
Date prepared: Wednesday, 22 November 2017
Last update: Friday, 25th October 2019
About this Financial Services Guide (FSG)
This FSG provides you with key information about a range of subscription services offered by:
Marketmatters Pty Ltd (Market Matters) Australian Financial Services Licence No. 488798 ABN (20 137 462 536)
Level 29, Chifley Tower, 2 Chifley Square Sydney 2000
T: 1300 301 868
E: [email protected]
In this FSG, “we”, us” and “our” refer to Market Matters.
Market Matters holds Australian Financial Services Licence No. 488798 (AFSL) and is responsible for any financial services that we provide to you.
This AFSL was issued on 8th September 2016.
The purpose of this FSG is to provide you with information about:
Market Matters operates a website, www.marketmatters.com.au (Website), where customers may, for the payment of a subscription fee, access certain financial information and general advice. In particular, the Website provides:
This FSG relates only to the Website Services.
What financial services we can offer in connection with the Website Services
As holder of AFSL number 488798, in connection with the Website Services we are authorised to provide general financial product advice to both retail and wholesale clients in relation to the following financial products:
The Website Services are comprised of general advice only. That is, none of the advice given on the Website or by provision of the Website Services takes into account any of your objectives, financial situation or needs (Your Personal Circumstances). Before acting on any of the information, advice or Website Services, you must consider the appropriateness of this information in light of Your Personal Circumstances and, if necessary, consult a financial adviser before making any investment decision.
If you are seeking to acquire a specific financial product or security, you should obtain a copy of and consider the Product Disclosure Statement or Prospectus for that product before making any investment decision.
The Website does not provide a trading platform or access to a trading platform. There is no ability to purchase or sell financial products through the Website.
How do I access these services?
You can access these services by going to www.marketmatters.com.au and following the prompts and steps required to sign up for membership. Please read all terms and conditions carefully.
Fees and benefits payable to us and our associates
The Website is a subscription-based service. A yearly fixed subscription fee is payable to Market Matters when you subscribe to the Website which will vary depending on the type of subscription for which you subscribe. At the date of this FSG, the yearly subscription fees are as follows:
Platinum: $1,238 for 12 months
Platinum: $1,993 for 24 months
Subscription fees vary from time to time and are provided on the Website.
The Website does not currently feature third party advertising. Market Matters reserve the right to advertise at a future time for which they may receive remuneration. Any such advertising will be independent of any other content on the Website.
All representatives of Market Matters (Market Matters Staff) receive a salary paid by Market Matters. Market Matters Staff may also receive performance-based bonuses which are based on profitability, the number of subscribers and subscription renewal rates.
Where we refer you to a third party financial services provider, we may receive a referral payment. This referral payment may be a percentage of the fee’s charged by the financial services provider between 0% and 25%, or a fixed amount. These referral payments are made by the financial services provider to Market Matters and are not an additional cost to you.
How do we manage potential conflicts of interest?
Market Matters have implemented policies and procedures to mitigate the risk of conflicts of interest. These include:
Market Matters Staff and Contributors are encouraged to express independent views and opinions on the topics they write about. This is established through ongoing training, external audits and our conflict of interest and staff trading policies. Market Matters Staff are required to serve the best interests of the subscribers, without consideration of any commercial or personal interests.
How is my personal information dealt with?
If you have a complaint about our services, you should take the following steps:
Contact us and discuss the complaint directly. If you do not feel comfortable discussing the complaint with us or your complaint is not satisfactorily resolved within 2 business days, please telephone Market Matters, on 1300 301 868 and ask to speak with the Complaints Officer. We suggest you put your complaint in writing at this time so that the issues are fully documented and understood by the parties. Your complaint should be addressed to:
The Complaints Officer
Level 29, Chifley Tower,
2 Chifley Square Sydney NSW 2000
Market Matters will review your complaint within 45 days and attempt resolution. If you are still not satisfied with the outcome, you may take your complaint to an external dispute resolution scheme. Market Matters is a member of the scheme operated by the Financial Ombudsman Service. You should write to:Australian Financial Complaints Authority Limited (AFCA)
You may also wish to consult ASIC in relation to your complaint. ASIC’s website contains information on complaining about companies and people and describes the types of complaints handled by ASIC. You can contact ASIC on its free call infoline:
Tel: 1300 300 630 or email [email protected]
We maintain professional indemnity insurance to cover our employees and Authorised Representatives (including us) for the financial services they provide, having regard to the following:
If you require further information about these compensation arrangements please contact us.
Terms and Conditions
This website, www.marketmatters.com.au, is published by Marketmatters Pty Limited (ABN 20 137 462 536) ('Market Matters', 'MM', 'us', 'we', 'our') Australian Financial Services Licence 488798
Financial Services Guide
Market Matters Financial Services Guide (FSG) is located here, and contains important information about the financial services provided by Market Matters. You must read our FSG and consider it in the context of your Personal Circumstances before acting on any advice. By accepting the terms and conditions you are acknowledging that you have read the FSG.
Provision of the Reports
Reports and other documents published on the Market Matter’s website (‘Reports’) are authored by Market Matters. The Reports represent the views of Market Matters based on technical analysis of companies, commodities and the market in general. Technical analysis focuses on interpreting charts and other data to determine what the market sentiment about a particular financial product is, or will be. Unlike fundamental analysis, it does not involve a detailed review of the company’s financial position.
The Reports contain general, as opposed to personal advice. That means they are prepared for multiple distribution without consideration of your investment objectives, financial situation and needs (‘Personal Circumstances’). Accordingly, any advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not any advice is appropriate for your Personal Circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of a financial advisor.
The Reports are published by Market Matters in good faith based on the facts known to it at the time of their preparation and do not purport to contain all relevant information with respect to the financial products to which they relate. Although the Reports are based on information obtained from sources believed to be reliable, Market Matters does not make any representation or warranty that they are accurate, complete or up to date and Market Matters accepts no obligation to correct or update the information or opinions in the Reports.
If you rely on a Report, you do so at your own risk. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Market Matters disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.
Past performance is not a reliable indicator of future results. Brokerage costs have not been included in the calculation of performance. As financial products rise and fall in value, returns may be negative. Performance figures are not intended to be a forecast. Market Matters does not guarantee the performance of or returns on any investment.
Employees and/or associates of Market Matters may hold one or more of the stocks reviewed on this website.
Subscriptions and Subscription Prices
To access premium content available on the Market Matters website you may initially subscribe through the complimentary trial which provides you full access to all services for the trial period. You are limited to two trials after which you must subscribe to one or more membership categories available on the website or direct with Market Matters before you can trial the service again, three months after the expiry of your second trial.
To subscribe to Market Matters services and access to the website you may go to the Memberships page of the website, provide the information marked as ‘Mandatory’ and select the payment option for the price quoted (at the time of your transaction) or contact the team directly at Market Matters by phone or email. You will then receive a verification email from Market Matters indicating that your subscription and payment have been accepted and you will be able to access the premium content.
Prices published on the Market Matters website are quoted in Australian Dollars (AUD) and are inclusive of GST and/or all other duties and taxes. Market Matters has used reasonable endeavours to ensure that prices for subscription to its services are published accurately on the website but these prices are subject to change and Market Matters reserves the right to change these prices and will notify you of any increase by email (with the price increase to apply from the time the next payment is due).
Marketmatters Pty Ltd (ABN 20 137 462 536) will issue a tax invoice to paying subscribers in relation to any supply that is subject to GST in accordance with A New Tax System (Goods and Services Tax) Act 1999.
Any member is entitled to cancel their membership at any time. In the event a member does wish to cancel their subscription, cancellations must be notified in writing to:
Level 29, Chifley Tower, 2 Chifley Square, Sydney NSW 2000
or by email to: [email protected]
All cancellations of month-by-month subscriptions will be cancelled and not billed again the following month.
All cancellations within 14 days we be entitled to a full refund. Any introductory gifts, such as, but not limited to; iPads, Fitbit watches, Apple watches, Google Homes, must be returned in their original condition before a refund will be made.
All cancellations made after 14 days of subscription commencement will not be entitled to a refund unless in the event of extenuating circumstances, at the sole discretion of Market Matters.
Subscriptions will automatically renew on the expiry date of current subscription. In these instances the subscription will be renewed at the current rate published on the Market Matters web site, using the same credit card that paid for the initial subscription, unless otherwise requested by the subscriber. A subscriber who wishes to cancel after being renewed in this way will have a “14 day cooling off period” in which they can request to discontinue and will receive a full refund for the renewal payment, this can be done in writing to:
Level 29, Chifley Tower, 2 Chifley Square Sydney 2000
or by email to: [email protected]
Market Matters has not reviewed any of the websites which link to this website or to which this website links. Market Matters is not responsible for the content of any other website or pages linked to or linking to its website. Following links to any other websites or pages shall be at the user’s own risk.
Copyright © 2018 Marketmatters Pty Ltd (ABN 20 137 462 536). No part of this website, or its content, may be reproduced in any form without the prior consent of Market Matters.
This Agreement is governed by and is to be construed in accordance with the laws of New South Wales, Australia. You agree to the non-exclusive jurisdiction of the courts of New South Wales, Australia in respect of any proceedings concerning this Agreement. This website is not available to US and/or EU persons and by accepting these terms you confirm that you are not a US and/or EU person.