Market Insights – 30th September 2019

Market Insights – 30th September 2019

Market Insights

30th September 2019

Top Stocks

Market and Exchange Rates

Commodities

Major Market Announcements

U.S. stocks fell on Friday after reports that the Trump administration was considering delisting Chinese companies from U.S. stock exchanges, raising worries about a further escalation in the U.S.-China trade war.

The world’s first welding-as-a-service company is set to launch its CSIRO-developed technology onto the ASX next week. Adelaide-based K-TIG offers precision robotic welding that it claims saves time, materials and money. Blue-chip firms GE, Siemens and Bilfinger are among clients in 20 countries already making use of a system that chief executive David Williams says can perform a three-hour tungsten inert gas (TIG) weld in just two or three minutes.

Wealth giant AMP has lost at least one major pension contract while other companies are reviewing their relationship with the wealth manager, which has struggled to stem a client exodus following revelations of serious misconduct.

Facebook will follow Instagram by hiding the number of likes on users’ posts during a trial in Australia. From Friday, some Australian users will no longer be able to see the number of likes – or reactions – on another person’s Facebook post. The controversial change has been trialled by sister platform Instagram in several countries since July. 

The wine industry could be in for shake up in the years ahead due to what is being described as an overcrowded market. There are nearly 2,500 wineries in Australia, across 65 wine regions, with most being small family-owned operations. But experts are predicting market forces will drive a number of wineries out of business over the next decade.

Market Update

Australian shares are set for a subdued start to the week as investors remain cautious about renewed trade skirmishes between China and the US, and the Reserve Bank’s policy meeting.

ASX futures were trading down 12 points or 0.2 per cent to 6683 over the weekend.

Local investors will also be shaking off a worrying result from Wall Street on Friday, which ended the last day of the trading week down. On Friday, the Dow fell 70.87 points, or 0.3 per cent, to 26,820.25. The S&P 500 slid 0.5 per cent to close at 2961.79

Wall Street was pulled lower after a report by news agency Bloomberg said the Trump administration was mulling restricting US investment in China and potentially delisting Chinese companies listed in the US – a move likely to be watched keenly by Australian institutional investors who have gained access to the Chinese market through regulated American stock exchanges.

Local investors will be also keen to know the outcome of the RBA policy meeting, to be held tomorrow. Several investment and retail banks are tipping the central bank will cut rates again.

The RBA left rates on hold at 1 per cent at its September meeting, after cutting the rate by 25 basis points at its June meeting.

Australian analysts from Bank of America Merrill Lynch are predicting the RBA will on Tuesday cut rates to 0.75 per cent.

“The rapid easing in June and July has gained traction in housing markets and the level of the currency is already stimulatory after a 17 per cent fall against the US dollar since January 2018,” the bank said in a note to clients.

Market Watch

Mineral Resources Limited (ASX: MIN) is an Australian based mining service, contracting, processing and commodities production company. MIN’s portfolio of market brands comprises of: PIHA, Crushing Services International and Process Minerals International; Its minerals producer market brands are Polaris Metals and Mesa Minerals.

MIN’s productions have a focus on servicing blue-chip Australian based mining businesses. 

Return of Equity which is considered a measure of how effectively management is using a company’s asset to create profits is going strongly for MIN with a Return on Equity (ROE) of 12.29% MIN also has a Price to Earnings Ratio (P/E Ratio) of 15.18 which indicates the dollar amount an investor can expect to invest in a company in order to receive one dollar of that company’s earnings. MIN is also considered an undervalued stock, from an Intrinsic Value prospective.

*Would MIN compliment My Portfolio?
*Is MIN a good starting stock?

Contact of office on 03 58 333 000 to discuss your investment options!

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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Dairy Farmers – Energy Investment Grant

Dairy Farmers – Energy Investment Grant

Dairy Farmers – Energy Investment Grant

This grant supports projects on dairy farms that will improve energy efficiency which may reduce energy costs and boost energy productivity. The grants will do this through actions such as the purchase and installation of equipment that improves the energy efficiency or enables own-generation capacity.

The grant is available to eligible primary dairy producers without the need for an On-farm Energy Assessment, and are only available for the following items:

  • Solar Photovoltaic systems up to 20kW;
  • Variable speed drives on pumps and/or compressors;
  • Thermal heat recovery systems;
  • LED Lighting upgrades;
  • Improving pre-chilling of milk, i.e. ice bank/plate coolers, heat exchangers and evaporative coolers;
  • Electronic control valves;
  • Heat pumps;
  • Pump replacement (not irrigation related);
  • Cooling fan replacement;
  • Milk vat replacement; and 
  • Reasonable installation costs.

The Government will provide a maximum grant of $50,000 (excluding GST). Grants will be provided on a $1 for $1 cash co-contribution basis. Recipients are required to contribute at least 50 per cent of the total cash costs of the project.

Eligibility criteria

  • Be a dairy farmer seeking support for items on the list above for the Tier 1 streamlined dairy grants
  • Be a business with an ABN 
  • Have an eligible dairy farm business located in Victoria
  • Spend more than $8,000 per annum (including GST) on energy inclusive of electricity, gas, LPG and diesel (excluding energy for transport)
  • Be a legal entity
  • Be able to meet the required cash co-contribution (at least $1 for every $1 provided)
  • Attest to having obtained all relevant regulatory approvals for the project to commence (where applicable)
  • Meet all industrial relations obligations as an employer in accordance with the National Employment Standards
  • Agree to participate in future program evaluation activity. 

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Market Insights – 30th September 2019

Market Insights – 23rd September 2019

Market Insights

23rd September 2019

Top Stocks

Market and Exchange Rates

Commodities

Major Market Announcements

– Incoming National Australia Bank chief executive Ross McEwan will take up the reins at the big four bank weeks before Christmas, after his current employer Royal Bank of Scotland appointed Alison Rose as his replacement.

– Communications Minister Paul Fletcher says NBN Co may need some competition over the next decade to reduce the risk of Australia’s fixed-line network falling behind.

– A long-running core system replacement at Industry Super owned ME Bank has chalked-up another $15 million in costs, with the branchless union-backed institution also junking a $14.4 million credit card platform rollout because of buy-now, pay later services.

– Coles has launched a fresh sales campaign offering sweeping discounts, with retail experts predicting Australia is on the verge of another supermarket price war.

– Soul Patts FY profit dips on Round Oak woe. Washington H Soul Pattinson’s full year profit has dipped on rising costs and as its Round Oak Mineral subsidiary slumped to a big loss.

Market Update

The Australian sharemarket has given up most of its early gains, but still managed to close higher for a 10th day in the past 12 sessions.

After being up as many as 56 points in the morning, the S&P-ASX200 closed Friday up just 13.3 points to 6730.8.

It was rise of 61.6 points for the week, the fifth straight the index has risen.

The broader All Ords, meanwhile, was up 13.8 points to 6839.

The ASX’s Rate Indicator showed that the market was now pricing in an 80 per cent chance of a rate cut next month, up from a 25 per cent chance a week ago.

Most sectors were up Friday save for industrials, telecoms, utilities and property trusts.

Mining stocks showed the biggest gains, up 0.5 per cent, with goldminers rising after the price of the precious metal climbed to US$1,505 an ounce.

Newcrest and Northern Star gained 2.3 per cent while Evolution was up 2.8 per cent.

BHP rose 0.2 per cent to $37.75 while Fortescue dipped 1.3 per cent to $8.92 and Rio Tinto fell 0.6 per cent to $92.44.

In the financial sector, NAB shot up in the final minutes of trading, closing up 1.6 per cent to $29.79, after the Royal Bank of Scotland announced that Ross McEwan’s last day would be October 31.

ANZ and Westpac, meanwhile, both gained 0.3 per cent, to $27.91 and $29.66, respectively, while Commonwealth was flat at $82.18

IOOF climbed 7.9 per cent to a four-month high of $5.99 after the Federal Court tossed out the financial regulator’s case against it over alleged conflict of interests and granted the wealth manager court costs.

Premier Investments streaked further ahead, up 16.61 per cent after the retail owner posted a 27.7 per cent increase in full-year profit.

JB Hi-Fi gained 1.5 per cent to set another all-time high at $34.86, having gained 34.8 per cent since the start of July.

Rural Funds Group fell 5.5 per cent to $1.625 – falling 20.3 per cent on the week – after Hong Kong-based Bucephalus Research released a report alleging financial impropriety.

The criticisms are similar to those made in August by US-based Bonitas Research, which Rural Funds Management rebutted and is suing.

Pushpay rose up 0.63 per cent as the app payment developer for churches, schools and education providers raised its guidance.

Seven West Media shed 2.41 per cent on news long-time head of sport Saul Shtein will depart the network in chief executive James Warburton’s first major move since taking the reins in August.

The Aussie dollar is buying 68.07 US cents, up from 67.81 US cents on Thursday.

Should I Be Buying Gold?

Is now the time to be buying Gold to protect your portfolio?

Gold has historically had a negative correlation to stocks and other financial instruments. Recent history shows this:

  • The 1970s were great for gold, but terrible for shares.
  • The 1980s and 1990s were wonderful for shares, but horrible for gold.
  • 2008 saw shares drop substantially as consumers migrated to gold.

The key to diversification is finding investments that are not closely correlated to one another. Properly diversified investors combine gold with stocks and bonds in a portfolio to reduce the overall volatility and risk.

How do I add Gold to my portfolio?

The most obvious answer is to run out and buy some gold coins, bars, or jewelry. This isn’t the best option for investors. For example, there’s a huge markup on jewelry, which makes it a very bad investment choice. But there’s also likely to be a markup on coins and bars that gets put into the price quoted from dealers. Also you will need to consider how you will store your Gold. This has its own risks and costs.

Another easier, more convenient way to get exposure to Gold is through an ETF such as the BetaShares Gold Bullion ETF (ASX: QAU).

Backed by physical gold bullion, the ETF offers a convenient way for investors to gain exposure to the price of gold, without the inconvenience associated with directly purchasing, storing and insuring physical gold bullion.

Gold can be an important part of a diversified investment portfolio because its price generally increases in response to events that cause the value of investments, such as shares and bonds, to decline. Although the price of gold can be volatile in the short term, it has maintained its value over the long term. Through the years, it has served as a hedge against inflation and the erosion of major currencies, and thus is an investment well worth considering.

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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8:00am to 5:00pm

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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

Recent Federal Court Decision – Personal Leave

Recent Federal Court Decision – Personal Leave

Recent Federal Court Decision: Personal Leave Accrual

On 21 August 2019, the Full Federal Court of Australia handed down a decision in Mondelez Australia Pty Ltd v AMWU [2019] FCAFC 138. The decision deals with the method of accruing and taking paid personal/carer’s leave for the purposes of the National Employment Standards under the Fair Work Act 2009.

The FWO is reviewing and updating its advice in light of this decision. Although the decision may be appealed to the High Court if any special leave application is made and granted, the Full Federal Court’s decision reflects the current state of the law. The majority of the Full Federal Court has determined:

Full-time and part-time employees are entitled to 10 working days of paid personal/carer’s leave for each year of employment.

The leave protects those employees’ income when they are entitled to be absent from work due to illness or injury (or providing care or support to a family or household member who is ill, injured or suffering from an unexpected emergency).

The leave must be calculated in working days, not hours. A working day is the portion of a 24 hour period that an employee would otherwise be working.

An employee’s entitlement is expressly based upon time working for the employer and is expressly calculated in days. For example, every 5.2 weeks, an employee accrues an entitlement to another full day of leave.

For every day of personal/carer’s leave taken, an employer deducts a day from the employee’s accrued leave balance. If an employee takes a part-day of leave, then an equivalent part-day is deducted from the employee’s accrued leave balance.

Read the Federal Court of Australia’s decision in Mondelez Australia Pty Ltd v AMWU [2019] FCAFC 138.

Source: Fairwork.gov.au

Our Human Resources consulting team at Plus 1 is available to help our clients understand these changes. Please call us on 5833 3000 or email at hr@plus1group.com.au

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Market Insights – 30th September 2019

Market Insights – 16th September 2019

Market Insights

16th September 2019

Top Stocks

Market and Exchange Rates

Commodities

Major Market Announcements

– The S&P 500 ended the day down slightly on Friday but less than 1% below its all-time high as a drop in Apple stock countered cooling U.S.-China trade tensions.

– Insurance Australia Group has estimated a class action over its sale of “add-on” insurance could be worth up to $1 billion. Federal Court Judge Jacqueline Gleeson detailed the company’s estimate in a judgment published on Friday as part of a class action against IAG on behalf of customers who were sold “add on” insurance products for cars and motor bikes which are said to be of little or no financial value.

– CIMIC has clinched a $1.3 billion, six-year contract extension to provide mining services to Queensland’s Curragh coalmine. Coronado Global Resources, which bought the open-cut mine in 2017 from Wesfarmers, has engaged CIMIC subsidiary Thiess to keep providing overburden removal and haulage, mining and run of mine rehandling services, equipment maintenance and pit dewatering.

– Energy shares Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) will be on watch on Monday after drone attacks on key oil refineries in Saudi Arabia. Although oil prices dropped lower on Friday, they are widely expected to rebound notably higher once markets reopen. According to Bloomberg, on Friday the WTI crude oil price dropped 0.45% to US$54.85 a barrel and the Brent crude oil price fell 0.25% to US$60.22 a barrel.

– The Bellamy’s Australia Ltd (ASX: BAL) share price looks set to rocket higher this morning after the infant formula company revealed that it has received a takeover approach.

Market Update

The Australian share market is expected to start the week a little lower, as investors await the outcome of this week’s US Federal Reserve meeting.

Uncertainty around the trade war between the United States and China will be another reason they will be wary when trading resumes.

“There are a few uncertainties which are in the mix at the moment,” CommSec chief economist Craig James told AAP on Sunday.

Futures suggest the benchmark ASX200 will lose a modest seven points, or 0.2 per cent,  at the market open on Monday.

That prediction comes on the back of a mixed day on Wall Street on Friday. Most of the major US stock indexes ended lower, as losses for technology shares offset gains by big banks.

The Dow Jones Industrial Average rose 37.07 points, or 0.1 per cent, to 27,219.52, but the S&P 500 index slipped 2.18 points, or 0.1 per cent, to 3007.39.

Investors across the world will be watching as the US Federal Reserve meets on Tuesday and Wednesday this week, with news of their latest decision on interest rates set to hit Australia on Thursday morning.

Economists are expecting the central bank to cut the rate by 0.25 per cent.

The US and China trade war remains a source of uncertainty, though there is fresh hope for a solution, with US President Donald Trump signalling he is potentially open to an interim trade deal.

China also revealed on Friday it would exempt some US pork and soybeans from extra tariffs on US goods.

“There’s a bit of optimism there,” Mr James said.

Closer to home, the Reserve Bank of Australia will release minutes from its September board meeting on Tuesday.

The big event will likely be the Australian Bureau of Statistics releasing employment figures for August on Thursday.

Economists are expecting 15,000 jobs to have been created in the month, keeping the unemployment rate steady at 5.2 per cent for the fifth consecutive month. An extra 41,000 jobs in July had failed to budge the rate.

Last week, National Australia Bank’s economists changed their call on official interest rates predicting an additional cut in February to take the official cash rate to 0.5 per cent partly due to unemployment edging higher.

The Australian market closed slightly higher on Friday, rising for a third straight day as gains by banking and industrial stocks outweighed losses by tech companies and energy producers.

The benchmark S&P/ASX200 index finished Friday up 14.3 points, or 0.21 per cent, to 6,669.2 points, while the broader All Ordinaries was up 11.4 points to 6,777.1 points. For the week the ASX finished up 21.9 points, its fourth straight week of gains.

Share Watch

Exchange Traded Funds (ETF) offer access to almost every corner of the market, and every major asset class providing a broad range of investment options, which can be complimented with direct equity exposure in a growing portfolio.

An ETF is an investment fund that is traded on a stock exchange – just like any share.

ETF’s are one of the fastest growing categories of investment products in the world. The reason for this is clear – ETF’s offer simple, liquid, low cost and flexible investment options.

One ETF of interest that i am going to cover today is the BetaShares Australian EX-20 Portfolio Diversifier ETF (ASX: EX20)

EX2- provides exposure to approximately 180 stocks listed on the Australian Securities Exchange, ranked from number 21 to number 200, based on their market capitalisation.

It is quite common in an existing portfolio to be heavily weighted in the Australian Top 20 shares, mainly being the Financial sector, Materials, Healthcare, your big established companies.

EX-20, like other shares, pays a semi-annual distribution, 12 month gross distribution yield of 5.50% (35% franked).

This would be a great buy for a new portfolio, or could compliment an existing portfolio depending on existing holdings.

Proceed with caution, always protect your capital with an exit strategy, and contact our office for personalised advice, or if you have any queries.

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

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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