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S&P/ASX 200 to start lower – 3 ASX shares to watch: KGN, HVN & TCL

The S&P/ASX 200 (INDEXASX: XJO) is expected to fall on Thursday according to the latest data from the Sydney Futures Exchange. Here’s what you need to know.

The party continues

The ASX200 held on to a small gain on Wednesday, adding 3.5 points despite dropping 1% at the open.

CSL Ltd (ASX: CSL) shares almost singlehandedly floated the market, with its 2.6% rally adding 10 points to the ASX 200 alone. Similarly, Wesfarmers Ltd (ASX: WES) benefitted from a round of broker upgrades following stronger than expected retail sales figures.

Once again, gold miners and healthcare rallied, benefitting from a weaker AUD with junior miner Gold Road Resources Ltd (ASX: GOR) up 6% and Northern Star Resources Ltd (ASX: NST) managing a similar recovery. After years of being underappreciated gold has finally moved into the mainstream amid the COVID-19 volatility, offering one of the few uncapped returns in the market. In my opinion, gold should form a part of all long-term portfolios in this ‘new normal’ for its hedging benefits but investors need to consider the benefits of hedged or unhedged positions.

Featured video: what is a portfolio?

‘As long as it takes’

They were the words of US Federal Reserve Chairman Jerome Powell overnight as he announced US interest rates would likely remain on hold until at least 2022.

Investors seemed to focus more so on his comments around the potential for long-term damage to the economy, sending all markets down with the S&P500 -0.5%, Euro Stoxx -0.8% and the Dow Jones ending down 1%.

Technology continued to rally, Microsoft (NASDAQ: MSFT) adding 3.7%, with the more cyclical beneficiaries including Boeing (NYSE: BA) and American Express (NYSE: AXP) off 6% and 4%, respectively.

There has been growing coverage of the increasing cash holdings building up in the portfolios of professional investment managers and suggestions that this extended rally may have been driven by short-sellers now covering their position. If this is the case, expect the current daily whipsaw to continue with buyers re-entering the market on any falls.

Harvey Norman…

Whitegoods and electronics retailer Harvey Norman (ASX: HVN) delivered what appeared to be a fairly innocuous sales update to the market, announcing sales were up 17.5% on its 2019 result for the five months ended May 31. The result also reinstated the previously ‘deferred’ dividend via the payment of a 6-cent special dividend, sending the share price up 7.3% and leading all constituents.

Kogan Ltd (ASX: KGN) appears to be seeking to capitalise on its recent popularity, raising $115 million at a discount of just 7.5%. In my view, this raising is one to avoid as it smells of opportunism.

Toll road owner Transurban’s (ASX: TCL) troubled Westgate Tunnel project has moved to the Supreme Court after CIMIC (ASX: CIM) and John Holland sought to tear up the $6.7 billion build citing ‘force majeure’ due to unexpected soil contamination issues. It’s looking increasingly unlikely the project will be finished anytime soon placing pressure on the extension to Transurban’s leases on its other toll roads. With TCL having recovered most of its losses already, this is one we would be avoiding for the time being with a potential capital raising around the corner.

This report was written by Drew Meredith, Financial Adviser and Director of Wattle Partners. To get in contact with Drew, click here to visit the Wattle Partners website.

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The Golden Rules of Investing

We might be experts in retirement, but with combined financial advice experience of 35+ years, we’ve nearly seen it all. 

In mid-2023, our senior team at Wattle Partners Financial Planning put the finishing touches on a brand-new report “The Golden Rules of Investing“.

In this free report, we outline the key principles that determine all of the portfolio construction and investment decisions of Wattle Partners. Collated over decades, this paper should be seen as a work-in-progress, constantly under review in light of the ever-evolving nature of markets. 

You’ll find the free report on my Author page. Simply click the button below to view the Golden Rules.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.


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Wattle Partners is a financial advice firm, servicing clients around Australia, specialising in retirement planning (pre and post retirement). 

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