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ASX 200 morning report – PNI, NCK & oil shares in focus

The S&P/ASX 200 (ASX: XJO) managed to eke out another consecutive record finish, despite adding just 8 points and finishing 0.1% higher.

It continues a positive start to the month, driven by seven of the 11 key sectors finishing higher. This despite Victoria entering its sixth lockdown, another seven-day‘ circuit breaker’.

Property pushes higher

The property sector continues to defy expectations delivering the strongest performance on Thursday, up 1%, with the likes of Goodman Group (ASX: GMG) and Vicinity Centres (ASX: VCX) up 1.8% and 0.6%, respectively.

The support seems to be coming from hopes that bond rates will remain muted for the foreseeable future and benefits from the lack of dedicated office trusts on the market, with the sector clearly hurting more than most.

ASX oil shares fall

The oil price continues to fall as the delta lockdowns expand, with the sector falling 1.2% behind Woodside Petroleum Limited (ASX: WPL), down 1.5%, and both Santos Ltd (ASX:STO) and Oil Search Ltd (ASX: OSH) down over 1%.

The latter were hit with another curveball in their difficult merger deal, with the PNG Government exposing geopolitical risk by suggesting any deal had to be ‘in their best interests’; probably one to capitalise on now.

Funds management pays

Pinnacle Investment Management Group Ltd (ASX: PNI) was the market leader as it makes a push for the ASX 100, with shares jumping 9% on its FY21 results.

The group takes 49.9% ownership stakes in various fund managers, 16 as of today, and provides them with back office and distribution support.

Pinnacle owns part of Coolabah Capital, Hyperion and Firetrail among others and reported a 52% increase in assets under management to $89.4 billion dollars over the financial year.

This saw revenue double, adding 108%, to $67 million. Whilst $14 billion was driven by the strong performance of its equities, it attracted $16.7 billion in inflows, something every major fund manager would be seeking. The dividend also increased to 28.7 cents.

Nick Scali doubles profit

Furniture retailer Nick Scali Limited (ASX: NCK) fell by 0.8% despite reporting a doubling of profit to $84.2 million on the back of a 42% increase in revenue, which hit $373 million.

That said, the dividend was only increased by around 37% as management grows increasingly concerned about huge increases in freight costs. Online sales, launched amid the pandemic, delivered just 7% of full-year profits.

ASX 200 today

The ASX is expected to open relatively flat on Friday despite a positive lead from US markets overnight. To find out more, check out our daily US stock market report.

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.

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At the time of publishing, the author of this article 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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