Afternoon Report / Afterpay leads ASX higher, Financials remain firm (APT, WHC)

By Market Matters 14 January 21

Afterpay leads ASX higher, Financials remain firm (APT, WHC)

Market Matters Afternoon Report 14th January 2021

WHAT MATTERED TODAY

Aussie stocks rallied today with the recently weak IT sector taking the batten and running with it thanks largely to a very strong session from Afterpay (APT) which put on 9%, Harry covers that below while the recently hot resources cooled, ticking down by 0.7% on the session. Overnight there was a slight reversion of recent themes as bond yields ticked lower, however the interesting aspect of todays trade was that financials remained firm implying more juice in the tank there – the sector adding 0.84%.

Trade data from China was strong today with most metrics printing ahead of expectations.

Source: Bloomberg

Asian markets were higher today while US Futures were trading in the green around our close.  

The ASX 200 finished up +28pts / +0.43% to close at 6715. Dow Futures are trading up +97pts / +0.32% . 

ASX 200 Chart

ASX 200 Chart

CATCHING OUR EYE

BNPL: the sector was well supported today across the board coming on the back of US peer Affirm landing on the NASDAQ boards. While it has its own quirks, as all BNPL players do, it’s a reasonable comparison to the local names. The stock almost doubled on debut which put it on a Price to sales (annualised) multiple of over 40x vs APT around the 30 mark and our friend Z1P on just 14x.

Afterpay (APT) Chart

Whitehaven Coal (WHC) +3.14%: out with solid Q2 production numbers today. Peter O’Connor’s quick take here… He likes the stock.

Summary. Coal Price tailwinds combined with YTD production tracking OK and FY guidance tightened highlights the improving backdrop vs July/August 2020.

DQ20 scorecard OK. Incremental improvements across operations with Maules Creek now running at capacity and Narrabri now having exited difficult mining conditions (for now)

FY21 guidance tightened. FY expectations (managed sales, 100%) now 19.5mt (range 19-20mt), higher by 0.25mt (mid-point).

Whitehaven Coal (WHC) Chart

BROKER MOVES

  • Premier Investments Cut to Neutral at UBS; PT A$24.50
  • Dalrymple Bay Rated New Buy at Citi; PT A$2.42
  • Pact Group Cut to Underweight at Morgan Stanley
  • Adbri Cut to Underweight at Morgan Stanley; PT A$3.30
  • Boral Raised to Overweight at Morgan Stanley; PT A$5.80
  • Incitec Raised to Overweight at Morgan Stanley; PT A$2.75
  • Orora Cut to Equal-Weight at Morgan Stanley; PT A$3
  • Transurban Raised to Hold at Morningstar
  • Pro Medicus Cut to Sector Perform at RBC; PT A$35
  • Rio Tinto Cut to Hold at Deutsche Bank; PT 6,000 pence

OUR CALLS

No changes today – we have a number on our radar, a few of which we covered in the Income Note yesterday however we’re waiting for opportune times to pull the trigger.

Major Movers Today

Have a great night

James, Harry & the Market Matters Team

Disclosure

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.

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