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S&P/ASX 200 morning report – TCL, NWL & BXB shares in focus

The S&P/ASX 200 (ASX: XJO) is tipped to rise again at the open on Friday as US markets continued to creep higher overnight.

ASX 200 records longest winning streak since July

The ASX 200 has delivered its longest winning streak since July, finishing 1.1% higher on Thursday as the budget stimulus continues to reverberate through markets. The announcements have been well received by the corporate sector, despite several shortcomings.

But a reminder of the long road ahead came from the Transurban Group Ltd (ASX: TCL) AGM, during which management provided a third-quarter update. Average daily toll road traffic was down 25.2% in the September quarter, with Sydney the only improver, growing 1.5%. Melbourne’s lockdowns continued to bite, pushing traffic down 58.6%, Brisbane a more muted 9.1% and North America falling 28.2%.

Rather than a dilutive capital raising, the company flagged the partial sale of the Washington toll road, in an effort to assuage lender concerns. The Transurban share price fell 1.0% on the news and is 40% off its March lows despite the weakness. To me, this suggests limited upside even in the event of a vaccine.

Source: Rask Media TCL 1-year share price chart

Elsewhere, iSelect Ltd (ASX: ISU) settled a case with the ACCC for $8.5 million, arising from queries around the competitiveness of its comparisons. The iSelect share price rallied 13.3% on the news.

Brambles confirms guidance, Netwealth booming

The Reserve Bank of Australia remains under pressure to do more, the latest comments from bond manager, Charlie Jamieson cutting to the core. Speaking at a conference, Charlie suggested that “the RBA are a tremendously reactionary central bank” and highlighted that “they couldn’t have done a worse job at predicting what might occur”. The same could be said for the majority of Australian economists in recent years.

Global pallet distributor Brambles Limited (ASX: BXB) reiterated guidance for 2021, with sales to grow by up to 4% and underlying profit closer to 5% – all going well. Brambles shares finished 0.9% higher.

Meanwhile, superannuation platform provider Netwealth Group Ltd (ASX: NWL) rallied 8.3% after announcing an 8% increase in funds under administration to $34 billion in September. The growth is being driven by managed accounts, allowing advisers to outsource investment implementation, which is now $6.5 billion compared to just $3.4 billion in 2019. The group also announced the launch of its own suite of funds with Magellan Financial Group Ltd (ASX: MFG), adding another string to its bow.

US markets at five-week highs

The daily volatility continues, with signs the Democrats will relent on a new stimulus package boosting markets to five-week highs. The S&P 500 finished 0.8% higher and the Nasdaq 0.4%.

It appears markets are becoming more optimistic about a Biden victory with the additional stimulus spending it provides to boost the domestic economy; only time will tell.

Signs of progress on both COVID-19 treatments and vaccines shot the energy sector higher, oil jumping over 3% on the news. The combination of oil, cruise and travel companies will be the key beneficiaries from a real vaccine, but remain well below 2019 highs.

Merger activity has spiked in recent months with Morgan Stanley (NYSE: MS) announcing the acquisition of fund manager Eaton Vance (NYSE: EV), which jumped 48% on the news.

Finally, McDonald’s Corp (NYSE: MCD) announced that sales continued to recover in September, 4.6% higher which should be good news for Australia’s Collins Food Ltd (ASX: CKF).

This article 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.

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.


Disclosure: At the time of publishing, Drew does not have a financial or commercial interest in any of the companies mentioned.

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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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