Weekly ASX Share Trading Wrap Up

Weekly ASX Share Trading Wrap Up

Last week the ASX managed to edge higher, continuing its gradual rebound. Buying sentiment was supported through the week as China reported significantly better-than-expected exports activity, Australia posted a much greater trade surplus than anticipated, and as the RBA flagged the prospect of a rebound in the economy by the end of the year. By the end of the trading week, the ASX 200 jumped 2.8% to 5,391.1 points.


Which shares excelled?

Payment processing stocks were one of the biggest-moving segments last week, leading the way for gains among mid-to-large cap stocks. The move suggests that shareholders may be looking towards easing lockdown measures to provide a catalyst to kick-start retail sales.

The week’s best-performing stock was Pushpay Holdings (ASX: PPH), with the donor management software provider seeing its share price soar higher by 50.5% to reach an all-time high. The company released its full-year results that showed revenue climbed 32% to US$129.8m. The revenue result was notably higher than the guidance provided. In addition, the company also met guidance for total processing volumes of US$5bn, up 39% against the prior corresponding period, and achieved its recently-upgraded EBITDAF forecast.

Australia’s two leading buy-now pay-later platforms were next in rank, with Zip Co (Z1P) and Afterpay (APT) delivering weekly gains of 47.3% and 36.8% respectively. Both companies soared on the back of major news throughout the week, starting with Afterpay, which advised the market after-hours the week prior that Chinese company Tencent had taken a substantial holder position in the company. Meanwhile, Zip delivered an April trading update, noting that its monthly revenue soared 81% year-on-year to $15.1m, while monthly transaction volume rocketed higher by a similar amount to $181.6m. It also reported strong growth in receivables, customer numbers and merchant numbers.

EML Payments (ASX: EML) and Tyro Payments (ASX: TYR) were two other beneficiaries of the positive sentiment returning to the segment, with their market valuations increasing by 28.7% and 25.1% respectively throughout the trading week.

Elsewhere, shares in PolyNovo (ASX: PNV) leapt by 28.1%. The company presented at the Macquarie Investor Forum during the week, providing an investor update. Although the corresponding announcement was not deemed price-sensitive by the ASX, investors seemingly favoured the news that positive sales momentum carried through into April despite COVID-19.

While there were a host of other stocks to increase by double-digit percentage movements, the best of the rest came from Megaport (ASX: MP1), Appen (ASX: APX), Qube Holdings (ASX: QUB), Perseus Mining (ASX: PRU), Oceanagold (ASX: OGC) and Domain Holdings (ASX: DHG). Each of these shares rose by at least 15% last week, with Qube the most-publicised among the bunch due to the successful completion of its institutional entitlement offer.



Which shares dragged on the market?

The week’s worst performers came from a variety of industries, although it was easy to spot some of the ASX’s travel-related stocks falter, even as Prime Minister Scott Morrison laid out a road map to reopen the economy. Shares in Qantas (ASX: QAN) dipped 6.1%, Sydney Airport (ASX: SYD) shed 5.2%, Corporate Travel Management (ASX: CTD) slipped 5% and Auckland International Airport (ASX: AIA) eased 4.1%. This contrasted with Webjet (ASX: WEB) and Flight Centre (ASX: FLT), which both surged higher on Friday afternoon.

Whereas the news of CTD‘s covenant waiver and market update were likely overshadowed by profit taking following significant gains the week prior, and airport stocks deal with a slow path to restore air traffic, Qantas suffered its own setback. The airline announced that it has extended flight cancellations for June and July, incurred hedging losses associated with the decline in oil prices and taken on a further $550m in debt funding.

National Storage REIT (ASX: NSR) dropped 8.4% after the company announced it would raise up to $330m at a price of $1.57 per stapled security.

A market update from Insurance Australia Group (ASX: IAG) left some shareholders disappointed, with the company notifying its holders that based on current circumstances there would be “limited scope” to pay a final dividend in September. Furthermore, the insurer also noted that investment income on shareholders’ funds was sitting at $280m in pre-tax losses for the financial year-to-date period up until the end of April. Shares in IAG fell by 5.7%.

Other stocks under pressure last week were Alumina (ASX: AWC), down 6.2%, Incitec Pivot (ASX: IPL), down 5.6%, Metcash (ASX: MTS), down 4.9%, Bingo Industries (ASX: BIN), down 4.5%, and Vocus Group (ASX: VOC), down 4.3%.



This week’s trading outlook

While the US market stormed higher on Friday evening, ASX futures diverged somewhat in following their lead. This came despite the US market finishing well above its indicative opening price at the time the ASX closed. While ASX futures point to a flat start, this may change following news over the weekend that China is reportedly considering introducing trade tariffs on barley from Australia.

All eyes will be on the Australian unemployment rate this week, which is forecast to reach as high as 9% now that the data focuses on April and the period covering the economic lockdown. There will also be data regarding business and consumer confidence, as well as home loans.

In the US, the news agenda will see the latest readings on inflation, retail sales, industrial production and continuing jobless claims. China will also report on the first three of these metrics, in addition to the nation’s unemployment rate.

Commonwealth Bank (ASX: CBA) will be in the spotlight this week as it provides a third quarter trading update on Wednesday. Like the other banks that have reported thus far, eyes will be fixed to the size of impairments that are expected to be announced in relation to COVID-19.

Before then, however, Cimic Group (ASX: CIM) will detail its first-quarter operations on Monday, and Amcor (ASX: AMC) will release its Q3 results on Tuesday. Another stock that will publish results is Xero (ASX: XRO), with the cloud-based accounting software platform due to report FY20 results on Thursday, 14 May.

Shares in ResMed (ASX: RMD) will trade ex-dividend this Wednesday, while later in the week, Janus Henderson Group (ASX: JHG) is expected to trade ex-dividend on Friday.


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


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