ASX Trading Wrap: Shares pull back from a six-month high

ASX Trading Wrap: Shares pull back from a six-month high

Reporting season was the focus of the investment community this week as the results poured through from a large number of companies across the market. While tech shares generally fared well, stocks from the energy and financials sectors underperformed. Nonetheless, the ASX 200 settled on 6,111.2 points, down 15 points across the trading week.

 

Which shares excelled?

WiseTech Global (ASX: WTC) was right at the front of the pack when it came to standout shares this week, with the logistics software company soaring 40%. The catalyst was none other than the company’s FY20 results, which showed a 23% increase in revenue and a 17% increase in EBITDA. Management also cited the shift towards digitisation improving the uptake of its software, with momentum even building post-EOFY.

Another stock given a lift by its earnings release was IDP Education (ASX: IEL), which leapt 31.6%. Despite the impact of international travel restrictions stifling its access to overseas students, the international education provider reported EBIT growth of 11% in FY20, while NPATA rose 3%.

Setting records of its own, Codan (ASX: CDA) stormed higher this week on the back of significant growth across its business. The communications business reported its highest level of NPAT in its history, skyrocketing 40% to $64 million. This was underpinned by a 29% increase in sales across the business, as heightened gold mining activity buoyed sales of its metal detection products.

Another strong performer from the tech sector was Megaport (ASX: MP1). In its FY20 results, the business confirmed a 66% rise in revenue, with monthly recurring revenue featuring as a prominent driver, advancing 57% year-on-year. Investors looked beyond the net loss and instead focused on strong growth in other metrics such as installed data centres, customer numbers and number of ports, while the announcement of its new ‘Megaport Virtual Edge’ product earlier in the week also pleased shareholders.

Meanwhile, Corporate Travel Management (ASX: CTD) and Star Entertainment Group (ASX: SGR) were both given a boost when they reported better-than-expected results as they chart a recovery in the wake of COVID-19. The duo rose 20.9% and 13.7% respectively across the trading week.

Among the other winners this week were Bapcor (ASX: BAP), Super Retail Group (ASX: SUL), Domino’s (ASX: DMP), Appen (ASX: APX), Carsales (ASX: CAR), Coca-Cola Amatil (ASX: CCL), CSL (ASX: CSL) and Afterpay (ASX: APT), most of which were supported by results updates.

 

 

Which shares dragged on the market?

Following news that China would begin an anti-dumping investigation surrounding Australian wine imports, shares in Treasury Wine Estates (ASX: TWE) were slammed this week. The stock cratered 22.8%. While the company sought to reassure shareholders it would comply with all matters of the investigation, there may be some uncertainty hanging over the stock for some time given the investigation is expected to span over a year.

Elsewhere, Unibail-Rodamco-Westfield (ASX: URW) was caught on the wrong side of media speculation around its capital structure. Reports emerged earlier in the week suggesting the company was considering ways in which it could improve its balance sheet, leading some shareholders to rush for the exit in anticipation of a potential rights issue. URW shares ended the week 12.9% lower.

Disappointing earnings results from Bendigo and Adelaide Bank (ASX: BEN) left investors reeling. The regional bank unveiled a 27.4% drop in cash earnings, which was even worse on a statutory basis, down a mammoth 48.8%. Although the company reported lending growth, it was hit by a 3 basis point drop in net interest margins, and was forced to increase its COVID-19 provisions amid an increase in bad and doubtful debts.

Despite posting record profits, with NPATA rising 17% to $24 million, EML Payments (ASX: EML) was subject to a sharp sell-off in light of its results. US mall gift card volumes were hit significantly from COVID-related lockdowns, with an interruption to sales expected to continue and provide some uncertainty moving forward.

With COVID-19 weighing significantly on power demand and prices, Origin Energy’s (ASX: ORG) earnings nose-dived by 93% to just $83 million. The statutory result was driven largely by a $770 million impairment to its Queensland LNG project ownership, while the financial impact in accommodating distressed customers also took its toll.

In terms of other stocks that underperformed, names included AMP (ASX: AMP), Cimic Group (ASX: CIM), Magellan (ASX: MFG), Virgin Money UK (ASX: VUK), Vicinity Centres (ASX: VCX) and Westpac (ASX: WBC).

 

We’ll be back next week with another Weekly ASX Trading Wrap Up – until then, have a great weekend!

 

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