Afternoon Report / ASX200 Drifts Lower on General Lack of Interest

By Market Matters 15 May 17

ASX200 Drifts Lower on General Lack of Interest

Market Matters Afternoon Report 15th May 2017

The market opened lower than expected this morning, which then rallied off its lows ahead of the China data at 11.30am, only to disappoint and drift marginally lower by the close of business.

From a sector perspective, the telcos and banks added the most support as buying re-emerged following the budget bank sell-off last week, however they were unable to offset the losses from the healthcare, real estate and consumer staples.

We had a range today of +/- 41 points, a high of 5847, a low of 5806 and a close of 5838, up only 2 points, or 0.03%.

Today we allocated 5% of the MM portfolio into Westpac (WBC) ~$32.70 ahead of its 94c fully franked dividend on Thursday – this will be explained in more detail in tomorrow morning’s report.

ASX200 Intra-day Chart

The ASX200 actually made a fresh low for May at 5805, smack on its trend line support. While we still envisage a test of 5700 in May / June, our opinion is the short-term weakness will be led by US stocks. A close on the ASX200 under 5800 support is likely to see a fairly rapid decent of ~2%.

ASX200 Daily Chart

In what was a very quiet day from both a price action and news perspective, the standout was TPG Capital revising its bid for Fairfax (FXJ) to $1.20 for the entire business – remains the jewel they are trying to acquire.

However while the stock was the best performer in the ASX200, it still spent most of the day trading 5% below the offer price – clearly investors believe the bid will fail.

Unfortunately we now believe the stock is 50-50 at current levels.

Fairfax (FXJ) Monthly Chart

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Have a great afternoon,

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.



All figures contained from sources believed to be accurate.  Market Matters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy.  Prices as at 15/05/2017.  4.21PM.


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