ASX Trading Wrap: Zip takes off, as the ASX circles an 11-month high

ASX Trading Wrap: Zip takes off, as the ASX circles an 11-month high

The ASX 200 gained 1.3% this week as the market touched an 11-month high. With tech stocks soaring overseas and pushing the Nasdaq to a series of new all-time highs, the ASX was also the beneficiary of a strong week for the local tech sector. Ending the week, the benchmark index finished on 6,800.4 points, a weekly close last seen in late February, 2020.

 

Which shares excelled?

Zip Co (ASX: Z1P) had a standout week, outdoing most other stocks across the market thanks to its fourth-quarter trading update. The BNPL company rose 28.9% after detailing a strong finish to 2020, setting numerous records in the final quarter of the year as momentum across its business begins to build. Management announced that customer numbers soared 97% to 5.7 million, while revenue leapt 88% year-on-year to reach $102 million in the period.

A major deal with the US government was enough to propel shares in Lynas (ASX: LYC) sharply higher to end the week. The company will build a rare earths separation plant in Texas, which is expected to handle a production throughput of 5000 tonnes of rare earths per annum. As part of the deal, Lynas and the US Department of Defense will each co-contribute US$30 million towards the project. Shares in Lynas gained 26.1% this week.

Australian software firm Nuix (ASX: NXL) also posted a big result this week, climbing 22.2% to $11.05 per share. The investigative analytics and intelligence developer only made its debut on the ASX at the start of December, however, the company’s life as a public entity has thus far proved successful, especially since its IPO price was $5.31 per share.

Takeover talk lit a fuse under the share price of Bingo Industries (ASX: BIN). The waste management company was the subject of a conditional takeover bid from private equity firm CPE Capital, which has offered investors $3.50 per share in Bingo. Alongside the private equity suitor are numerous other sponsors to the bid, including Macquarie Infrastructure and Real Assets.

Investment platform provider Netwealth (ASX: NWL) was another of this week’s best-performing mid-to-large cap stocks, benefitting from an upbeat quarterly report. As at the end of December, the company had $38.8 billion in funds under administration, which was 14% higher than the prior quarter. More than half of the increase across the quarter was attributable to net inflows. Management also took the opportunity to increase the company’s guidance for FY21 net inflows. Its peer, Hub24 (ASX: HUB), was also spurred on by strong growth in funds under administration.

Among the other winners this week were lithium duo Galaxy Resources (ASX: GXY) and Orocobre (ASX: ORE), Fisher & Paykel Healthcare (ASX: FPH), plus tech businesses like Uniti (ASX: UWL), WiseTech (ASX: WTC) and EML Payments (ASX: EML).

 

 

Which shares dragged on the market?

After a period of consolidation and rebounding, coal miners were the subject of heavy selling this week. Whitehaven Coal (ASX: WHC), New Hope Corporation (ASX: NHC) and Yancoal Australia (ASX: YAL) shed 10.9%, 5.2% and 5.9% of their respective market caps. The recent highs for the trio coincided with the day Whitehaven released its quarterly report, leaving open the possibility that investors were happy to sell the news and take profits amid an improved outlook.

The stock price of Unibail-Rodamco-Westfield (ASX: URW) ended the week lower by 10.2% despite no particular news driving the price. On Friday the company announced the completion of the disposal of a property within its portfolio, however, the market was aware of this earlier, and a large part of the drop in URW’s share price came after the company’s Dutch-listed shares had already tanked in overnight trading.

Alumina (ASX: AWC) shares were weighed down by an update from its joint venture partner, Alcoa (NYSE: AA), which pointed to tough times ahead. The US aluminium maker advised the market that higher-than-expected costs were likely to weigh on this quarter’s earnings, in addition to lower selling prices for bauxite. For Alumina, a stronger Australian dollar has been having an impact on the business.

There was also a dour finish to the week for gold miner De Grey Mining (ASX: DEG) and fund manager Perpetual (ASX: PPT). In the case of the latter, the company released a quarterly update indicating that assets under management for the Perpetual Asset Management Australia business decreased by 2% in the fourth quarter.

 

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

 

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