The ASX fought through some mid-week wobbles to close in the black, buoyed by a strong rise in the tech sector. The major banks went ex-dividend during the week, however, the market managed to hold up well. The ASX 200 closed on 6,793.7 points, up 1% for the week, while the All Ordinaries lifted 1% to 6,898.9.
Attention once again centred on US-China trade discussions, which acted as a catalyst for the week’s trading activity and saw investors go from optimistic one moment to anxious the next. A surprise jump in the local unemployment rate also has some analysts sharpening their pencils as to whether another interest rate cut is on the way.
Which shares excelled?
In what was a scene of contrasting fortunes, some of last week’s hardest-hit tech stocks rebounded strongly during trading this week.
Nearmap (ASX: NEA) soared 17.1% following an update provided at its annual general meeting. The aerial imagery company announced it expects annualised contract value to rise as much as 33% on last year’s figure.
Trading in Appen (ASX: APX) and Afterpay (ASX: APT) also proved to be rewarding for holders, as the companies rose 7.8% and 22% respectively. While Appen released no specific news during the week, the strength of the tech sector appeared to help lift shareholder sentiment. A big part of that shift in sentiment was likely due to the warm reception Afterpay shares received once the market digested news it has lined up deals with eBay Australia and MasterCard, and also secured $200m from a high profile strategic investor.
Bingo Industries (ASX: BIN) was another stock to take flight this week, jumping 18.1%. The catalyst was news that the company’s CEO would add 30 million shares to his holdings to take his stake to 19.83% of the business. At the same time, an update showing improving margins was well received.
Nearmap shares soared this week on FY20 guidance
Which shares dragged on the market?
Despite a good run last week, and a late rally on Friday, Fortescue Minerals (ASX: FMG) came under heavy fire as selling pressure mounted. Across the trading week, shares in the iron ore miner were down 5.4%, with the recent slide in iron ore prices likely to be catching the attention of investors. In the last month, the commodity has dropped around 15%.
One of the week’s worst performers, G8 Education (ASX: GEM) suffered a sharp fall during Thursday’s trading session. The childcare centre operator announced its second profit downgrade in just the last three months, attributing the setback to lower-than-expected occupancy rates. Shares ended the week 22.9% lower.
Also issuing an earnings downgrade throughout the week was Nine Entertainment (ASX: NEC). With a soft advertising market and lending regulations weighing on its outlook, investors were displeased with an EBITDA forecast of “low single-digit growth”, sending the stock down 8.2%.
G8 Education shares were sold off heavily this week
Other trading developments
While some of the banks have had a torrid time reporting of late, Commonwealth Bank (ASX: CBA) bucked the trend this week. It reported a 5% increase in cash profit to $2.3bn for the September quarter, as well as growth in its home lending book.
Bellamy’s (ASX: BAL) received the all-clear from regulatory authorities with regards to being the subject of a takeover bid from China Mengniu Dairy Company. While certain conditions have been attached to the takeover, the move opens the way for shareholders to vote on the matter. If approved, the company is set to delist from the ASX by the end of the year.
VGI Partners Asian Investments (ASX: VG8) completed its IPO and made a debut on the ASX. In what was a disappointing start for holders, shares in the listed investment company fell 6% from their $2.50 issue price. The company wasted no time buying back some of its own stock, mopping up over 1 million shares on the first day of trading.
This week was also a special milestone for SelfWealth, as we listed our first ETF on the ASX. The SelfWealth SMSF Leaders Fund (ASX: SELF) commenced trade on Tuesday, ending the week 1% higher than the opening trade to finish at $50.64 per unit.
The trading week ahead
In what is a quiet week on the local front, investors and analysts alike are set to comb through the minutes from the Reserve Bank’s most recent Board meeting. The report is often scrutinised for clues regarding the RBA’s outlook on the local and international economy, as well as interest rates.
We’ll be back next week with another Weekly ASX Trading Wrap Up – until then, have a great weekend!
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