The week in finance - 12.10.2018


Words by Paul Rickard

The Australian sharemarket was awash with red ink this week. A soft start was followed by a rout on Wall Street mid-week, as concerns about the impact of trade tariffs, rising US bond yields and energy prices pushed US markets lower. The Aussie market followed suit, and by the close on Friday, it had lost 290 points, or 4.7%, over the week to close at 5896.

Most sectors felt the pain. The largest sectors, financial and resources, suffered losses of around 4%. Of the major banks, ANZ was the worst, losing 6.5% to $25.91, while Westpac held up the best to limit losses to 3.8%. Energy stocks such as Woodside pulled back sharply, as the oil price retreated.

The rout took its toll on some of the high-flying “growth” and tech companies. Healthcare leaders CSL, Resmed and Cochlear suffered losses of between 5.5% and 8.7%, while payments provider Afterpay finished at $14.75, down 16.7%. Tech firm WiseTech Global, which provides software for the logistics industry, closed at $17.41 for a net loss of 13.4%. 

One sector that finished up over the week was gold. Leader Newcrest rose 34 cents to $19.93, St Barbara was up 33 cents to $4.03 and Evolution Mining 29 cents to $3.01.

In company news, education provider Navitas enjoyed an unsolicited takeover bid from a syndicate connected with its ex CEO Rodney Jones. Its shares finished at $5.29, up 21.8% on the week. Property trust Centuria Metropolitan Trust raised $279 million to part fund the acquisition of a portfolio of commercial office buildings valued at around $500 million.

There were no major economic releases this week, although the Reserve Bank published its half yearly Financial Stability Review. It noted that while there are some vulnerabilities for Australian financial system stability, resilience had improved.

The Aussie dollar strengthened to 71.25 US cents.

The week in finance

Brickbats and bouquets

It was probably a yawn for the rest of Australia, but the fuss and carry-on over the use of the Sydney Opera House sails to promote a horse race was a sight to behold. Talk about a First World problem! If that same energy and passion could be channelled into dealing with some of the real problems we face…

Brickbats to all involved, including broadcasters Alan Jones and Peter Fitzsimons, NSW Premier Gladys Berejiklian, the organiser of the online petition that attracted 220,000 supporters, the protesters and the promoters of the horse race.

Staying with the sporting theme, a congratulatory bouquet for the Australian Cricket team, who batted for the last five sessions to salvage a draw in their first test against Pakistan in Dubai.

And as the Australian Financial Review was so keen to report with their “Rich Listers’ millions wiped in ASX carnage”, sympathy bouquets to WiseTech’s Richard White, Afterpay’s Nick Molnar and Magellan’s Hamish Douglass, amongst others.

That’s the week.

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