Market Insights – 1st April 2019

Market Insights – 1st April 2019

Market Insights

1st April 2019

Top Stocks

Market and Exchange Rates

Commodities

Major Market Announcements

  • U.S. stocks ended the final trading day of the first quarter on a strong note on Friday and the S&P 500 posted its best quarterly gain since 2009, boosted by optimism over the latest round of trade talks between the United States and China.
  • In Australia over the coming week, the handing down of the Federal Budget and the Reserve Bank’s interest rate decision both dominate. Tier-1 data includes retail and international trade, home prices and business confidence. US reports on jobs and retail sales are the key interest points in the coming week. Manufacturing and services activity gauges in the US and China will also be keenly observed.
  • LNG prices are forecast to drop by a third in the coming months following a steep decline in the oil price, hitting the earnings of some of Australia’s biggest energy companies. Australian gas prices have come off historic highs of about $20 a gigajoule caused by a combination of high oil prices and a lack of domestic supply. Australia is forecast to overtake Qatar to become the world’s top LNG exporter this year, shipping around 82 million tonnes of LNG in 2019. 
  • Federal Labor will introduce its changes to negative gearing and capital gains tax by January 1 next year if the party wins the May election, but shadow treasurer Chris Bowen does not expect a surge in property sales ahead of the overhaul.
  • The negative gearing reforms will not apply to newly built homes and existing investment properties, while the capital gains tax discount will be halved for investments entered into after January 1.
    Mr Bowen said the property tax changes would raise $2.9 billion over the forward estimates.
    “If you already use negative gearing, nothing changes. It’s not retrospective. And you can still use it for new houses,” he said in a statement on Friday.
  • Rio Tinto has declared force majeure to some of its iron ore customers after cyclone damage halted shipping from its Cape Lambert A terminal in the Pilbara. It is understood high winds and big waves from cyclone Veronica earlier this week combined with a spring high tide to damage the terminal. Rio has declined to reveal the nature of the damage, exactly what caused it or when it expects to resume normal operations.

Market Update

Investors initially shrugged off record low housing-credit growth but the Australian sharemarket failed to hold above the 6200 level and it dropped to close marginally firmer.

The S&P-ASX 200 index reached a 0.6 per cent gain in afternoon trade, but it sold off again to close up just 4.6 points, or 0.07 per cent, at 6180.7 finishing up 9.4 per cent for the March-quarter as investors turned to healthcare stocks and miners for quarter-end window dressing.

The major banks had a solid session despite February credit growth slowing to just 4.2 per cent over the past year, with the three-month annualised rating falling to 2.9 per cent as the decline in house prices reduced demand for mortgages.

UBS economist George Tharenou said of note was that credit from the big four banks hit a record low of 2.8 per cent year-on-year, but UBS’ estimated the rest of the system was “still booming” at about 10 per cent growth.

Share Watch

Looking to gain exposure to the Resources Sector? 

The BetaShares Australian Resources Sector ETF (ASX: QRE) provides simple and transparent exposure to various resources stocks available on the ASX, which include BHP, Rio Tinto and Woodside, all in a single trade!

Advantages;
Diversification – provides exposure to 35 resources stocks
Cost effective – The fund aims to track the performance of an index (no ‘active manager’ fees)
Transparent – Portfolio holdings, value of the fund’s assets and net asset value per unit is available daily
Liquidity – available to trade on the ASX, like any shares.

The longer term benefits in gaining exposure to this sector would be suitable for a beginners portfolio, or could compliment an established portfolio, depending on existing stocks held.

Contact our office for personalised advice and/or further information.

All Ordinaries (XAO) 5 Day Chart

Disclaimer: The advice provided is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Where quoted, past performance is not indicative of future performance.

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Market Insights – 1st April 2019

Market Insights – 25th March 2019

Market Insights

25th March 2019

Top Stocks

Market and Exchange Rates

Commodities

Major Market Announcements

  • Australian property stocks are proving largely immune to the worst housing slump in a generation, rallying to the highest in almost three years. Diversified revenue streams, the demand for offices in a growing economy and low bond yields have propelled the S&P/ASX 200 A-REIT Index up 13 per cent this year, compared with the nation’s benchmark index, which has climbed 9.2 per cent.
  • A new report from SQM Research says Labor’s negative gearing changes will force property prices down and rent up.
  • Low wages are forcing Australians into insecure work, multiple jobs, ACTU says. Stagnating wages, the “Uber-isation” of the workforce, and the growth of insecure casual or contract work has led to many more Australians taking on multiple jobs, according to a report by the ACTU.
  • Tech giants such as Google and Facebook will be forced to cough up far more cash if they breach privacy laws, under sweeping changes proposed to help protect the personal information of Australians. Social media companies and online platforms that seriously or repeatedly breach privacy laws would be fined $10 million under the reforms, compared to the current penalty of $2.1 million.
  • Australia’s banking regulator has told banks and insurers that climate change is a “material, foreseeable and actionable” risk it expects them to manage. “Uncertainty over long-term impacts or policy direction is not an excuse for doing nothing,” said Australian Prudential Regulation Authority executive board member Geoff Summerhayes in a statement on Wednesday.

Market Update

Australian shares finished the week with a rally led by the big banks and market heavyweight CSL, however the market is set to drop almost one per cent to start the week after the US had its worst one-day drop since January 3.

The benchmark S&P/ASX200 index closed up 28 points, or 0.45 per cent, to 6,195.2 points at 1615 AEDT on Friday, while the broader All Ordinaries was up 27.4 points, or 0.44 per cent, at 6,280.9.

Health care led gainers, up a collective 1.21 per cent, with global pharmaceutical company CSL up 1.52 per cent to $197.19.

Most sectors were up, aside from mining and telecom shares, which were down slightly.

Gold miners were down, however, as the price of the precious metal dropped, and shares in St Barbara crashed 29.25 per cent to $3.29, a 14-month low, after the gold miner said continued production at its historic Gwalia mine in Western Australia would have to rely on trucking ore rather than hoisting it out.

Suncorp was up 1.9 per cent to $13.44 after it said shareholders would receive a special dividend of 8.0 cents per share from the proceeds of its Australian life insurance sale.

Navitas was up 2.49 per cent to $5.76 after AustralianSuper, private equity firm BGH and the education provider’s own former CEO Rod Jones offered to buy the company for $2.3 billion.

The big banks were all up: Westpac gained 0.68 per cent to $26.51; NAB was up 0.52 per cent to $25.09; CBA gained 0.42 per cent to $71.43; and ANZ rose 0.26 per cent to $26.52.

BHP was down 0.19 per cent to $37.61 but most other miners were up, with Rio Tinto gaining 0.72 per cent to $94.17.

In the bond market, meanwhile, Australian bonds continued their rally, with yields on the five-year note hitting an all-time low of 1.4953 per cent, and the three- and 10-year notes at 29-month lows.

Share Watch

Bravura Solutions (ASX: BVS)

Bravura Solutions Limited provides software products and services to clients operating in the wealth management and funds administration industries in the Asia-Pacific (APAC) and Europe, Middle East and Africa regions. The Group primarily operates in two segments namely Wealth Management and Funds Administration.

In 2019, the BVS share price has risen from $3.80 to $5.58, or in other words, a 46.8% increase, and has more than doubled in value over the last 12 months.

Investors have taken notice of BVS due to the recent release of its impressive results having seen increases in revenue and EBITDA. One of BVS’s key products, the Sonata wealth management product, was once again a key driver of the company’s growth. Due to the quality of this product and its sizeable market opportunity, investors believe the company can see more growth in the future.

What we like about BVS:
– Excellent EPS growth is forecast
– Historical EPS growth has been exceptional
– Return on Equity has been good
– Cash balance exceeds debt
– Long term cash flow relative to profits is strong

Fundamentals:
– P/E Ratio: 44.22
– EPS: 0.13
– DPS: 0.09
– Yield: 1.60%

BVS is trading above its 20-day simple moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

Consider purchasing – with a plan. Always protect your capital with an investment strategy you are confident with.

All Ordinaries (XAO) 5 Day Chart

Disclaimer: The advice provided is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Where quoted, past performance is not indicative of future performance.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

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If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

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27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
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Sentinel Wealth Unit Trust T/As Plus 1 Wealth Advisors (ABN:11 408 695 672) is an Authorised Representative of Sentinel Wealth Managers Pty Ltd
(ABN: 73 108 328 294) AFS Licence 322211 | Financial Services Guide

Are You Missing Out?

Are You Missing Out?

Are you Missing Out?

The Power of One Percent

It is easy to overlook the importance of just a 1% increase in the return that we receive from an investment. This is especially the case if we have a relatively small investment that is inaccessible for a number of years.

These amounts can be, for example, superannuation for a young person or an investment for our young grandchildren for when they reach adulthood.

The following table illustrates how just a 1% increase in return can make a significant difference to the end result.

As advisers, we often come across investors who have some smaller amounts of money that are not readily accessible and because there is no urgency, they have not taken action to make the investment as effective as it can be.

As the above table illustrates, if you do not have an appropriate investment strategy, over time, that 1% that you miss out on today can add up to be very SIGNIFICANT tomorrow.

If you would like more information on investing, please contact us at wealthadvisors@plus1group.com.au or call 03 5833 3000.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

Plus 1 Group logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

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27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
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Sentinel Wealth Unit Trust T/As Plus 1 Wealth Advisors (ABN:11 408 695 672) is an Authorised Representative of Sentinel Wealth Managers Pty Ltd
(ABN: 73 108 328 294) AFS Licence 322211 | Financial Services Guide

Who wants to make an easy $100,000?

Who wants to make an easy $100,000?

Who wants to make an easy $100,000?

(aka The Compound Factor)

The good news is.. you can. If this interests you please read on.

Most of us have heard people saying things such as:

  • We spend what we get
  • If it comes out of my pay, I don’t miss it
  • I pay it on the first of each month and it’s done

One of the most powerful ways of creating wealth is by regularly investing each month. It can be quite boring but regular saving works. It really does.

To illustrate this, we will look at two ordinary people:

Let’s look at Mr Today and Mr Tomorrow. 

Mr Today starts investing $200 per month right now in 2019 for 10 years then he stops and leaves the investment to accumulate for a further 15 years. 

Mr Tomorrow delays investing for 10 years until 2029 and then invests $200 per month for the next 15 years.

With an investment return of 8.00% per annum, the results after 25 years would be:

  Mr Today Mr Tomorrow
Total Amount Invested $24,000 $36,000
Value after 25 Years $114,702 $67,772

 

The moral of the story is… Start Today, Not Tomorrow

Even though Mr Tomorrow invested much more than Mr Today, because he didn’t start straight away, after 25 years, he is still a long way behind.

To catch up to Mr Today and have the same amount in 25 years, Mr Tomorrow would need to invest over $60,000 or over $4,000 each month.

How did Mr Today end up with $114,702? Mr Today saved $50 per week, each week for ten years, then let the magic of compounding interest do the rest. It’s deadly dull but as we said it works. Could you do the same thing?

Like a lot of things in life, there is always a cost in putting something off until tomorrow.

If you would like more information on investing, please contact us at wealthadvisors@plus1group.com.au or call 03 5833 3000.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

Plus 1 Group logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
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Sentinel Wealth Unit Trust T/As Plus 1 Wealth Advisors (ABN:11 408 695 672) is an Authorised Representative of Sentinel Wealth Managers Pty Ltd
(ABN: 73 108 328 294) AFS Licence 322211 | Financial Services Guide

Market Insights – 1st April 2019

Market Insights – 18th March 2019

Market Insights

18th March 2019

Top Stocks

Market and Exchange Rates

Commodities

Major Market Announcements

  • Labor’s plan to fix stagnating wages. Labor today confirms it wants to overhaul our main wages tribunal saying it cannot deliver decent rises for low income earners. The Opposition will make the case in its submission to the Fair Work Commission panel hearing the national wage case affecting millions of workers.
  • Australia’s economy is set for a fiscal injection as the Coalition government, trailing in opinion polls ahead of the election in May, tries to buy its way back into contention. The expected spending bonanza in the April 2 budget will be well received by the nation’s heavily indebted households. It may also win favour in a more unlikely quarter: the traditionally buttoned-down, inflation-fighting Reserve Bank, which is keen to avoid resuming interest-rate cuts.
  • Retail Food Group hoses down concerns it is in financial strife, but regulators could start circling. The group behind Australia’s biggest franchise brands, including Brumby’s Bakery, Michel’s Patisserie, Gloria Jean’s, Donut King and Crust Gourmet Pizza, has hosed down concerns it is in financial strife and could soon be forced to appoint administrators.
  • Perth rents are tipped to soar by the end of the year as listings continue to dwindle, now down to half the historic highs they reached in mid-2017. Property managers are reporting bigger crowds at home opens and a return to tenants making offers above the asking price as the market tightens, with just 6,553 properties listed for rent across metropolitan Perth in February.
  • Woolworths could be forced to shut up to a third of its struggling Big W stores at a cost of almost $800 million. The Australian reported this morning that analysis by Macquarie Wealth Management had shown Woolworths’ best bet could be to “cut the tail” and reduce the number of stores across Australia from 183 to avoid a complete sell-off of the department store chain.

Market Update

Australian shares closed last week marginally lower but is set to open on the up this week. For the year overall, the Australian market is on track for an underperforming year.

Wall Street and Europe rallied on Friday and that should flow on for a positive start locally come Monday. But house prices and jobs data are likely to confirm suspected slowdowns in both sectors, weighing down the year’s overall showing.

Improvements could come by the way of a rates cut from the Reserve Bank or more economic stimulus from the federal government.

The benchmark S&P/ASX200 index was down 4.4 points, or 0.07 per cent, to 6175.2 points at 1615 AEDT on Friday, while the broader All Ordinaries was down 1.7 points, or 0.03 per cent, at 6265.1

For the week the ASX closed 0.46 per cent lower, after three weeks of gains.

The mining sector led decliners, collectively closing 1.03 per cent lower after copper prices dropped overnight when industrial output in top metals consumer China fell to a 17-year low.

BHP was down 1.83 per cent, Fortescue Metals down 1.22 per cent and Rio Tinto down 0.13 per cent.

A dip in the gold price overnight left miners of the yellow metal in the dumps, with Newcrest down 1.90 per cent, Northern Star down 3.63 per cent and Evolution Mining down 1.62 per cent.

Elsewhere, the big four banks were mostly down, with only NAB edging up 0.56 per cent.

ANZ was down 1.01 per cent, Commonwealth Bank down 0.85 per cent and Westpac down 0.45 per cent.

Industrial stocks were the biggest gainers, up a collective 0.74 per cent. Earthmoving equipment rental company Emeco Holdings was the biggest gainer on the ASX, up 6.4 per cent to $2.16, a two-week high.

Retail Food Group was down 13.51 per cent at a fresh all-time low of 16 cents after a parliamentary inquiry on Thursday recommended it be investigated by a trio of regulators.

Chinese-focused retailer AuMake was up five per cent after it announced it had added four new stores in Australia and New Zealand.

Santos was up one per cent, Woodside Petroleum up 0.86 per cent and Beach Energy up 0.48 per cent after Brent crude hit a four-month peak of $US68.14 a barrel.

The Aussie dollar is buying 70.84 US cents, from 70.62 US cents on Thursday.

All Ordinaries (XAO) 5 Day Chart

Disclaimer: The advice provided is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Where quoted, past performance is not indicative of future performance.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

Plus 1 Group logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

CPA Logo
Professional Standards Legislation logo
Platinum Xero Partner
MYOB logo
Quickbooks logo

Sentinel Wealth Unit Trust T/As Plus 1 Wealth Advisors (ABN:11 408 695 672) is an Authorised Representative of Sentinel Wealth Managers Pty Ltd
(ABN: 73 108 328 294) AFS Licence 322211 | Financial Services Guide