Australian Stock Market Report – Telstra, CBA, CSL shares & more

Australian Stock Market Report

Market Brief and Stock Tips - 22 June 2018

Highlights

Time to wave goodbye to the GFC – CBA pays up and its  share price takes off – Telstra still getting interference on the line to the market – Reserve bank keeps mum on interest rates while $A dives

Global Financial Crisis - or Goodbye Financial Crisis

You can put down your glasses - the GFC has been beaten. This week the markets main barometer of share prices the ASX 200 Index recorded the highest level in more than a decade – Remember – that was when Kevin 07 had the keys to the Lodge – seems like an eon ago. But we finished the week on a resounding 6200 the highest since 10 January 2008 - now we are only 10% away from the highest level ever recorded on 1 November 2007.

Given the current market’s momentum, and yes while it’s a bit of a stretch, it wouldn’t surprise me to see the index top the all-time high 6,800 points sometime this year – you can write that on the whiteboard.

And so, while the market has all but wiped out memories of the GFC there have been marked variations in the performances of some of our key blue Chip Stocks over the past 10 years , some have lagged and some have well and truly beaten the index. 

A few snippets from the market’s league ladder of performance since 10 January 2008 are:-

On top – CSL (up 453%) Cochlear (up 178%) Macquarie Group (up 36%) closely followed by CBA (up 27%), then there’s a gap with ANZ (up 0.8%) BHP (down 8%), RIO (down 18%) Westpac (down 3%) and NAB (down 19%). For those who are interested Telstra is down 36%. - (if you want fuller derails of how your favoured stock performed please give me a call).

Banks Regroup after the Right Royal Inquisition

Share price strength almost looks like the banks have shaken off the trauma of the Royal Commission.  No front pages anymore of victims of bank bad behavior.  Indeed this week the banks have girded their proverbial loins---with all four major banks up by between 5%-8% - and that’s just in one week! Indeed it may seem that investors are now seeing the whites of eyes of genuine value and great dividends. For instance the NAB is currently paying an annual dividend of about 7% and that’s even before taking account of the associated franking credits. And the others are not far behind.

But the key bell-weather for me will be CBA’s result due in early August.  If CBA’s profit and dividend are roughly maintained in the current hostile banking environment, this will be a shot in the arm for the banking sector generally. 

CBA Pays up

The Federal Court has now sanctioned the largest civil penalty in Australian corporate history of $700 million, imposed on CBA for contravention of money laundering laws. And by the way, CBA had to pay $2.5 million extra in legal fees --All this money no doubt is fodder for reducing the budget deficit--- and of course providing for some lawyers’ holidays. Nice work if you can get it.

Telstra – there’s interference on the line to the share market

Telstra underwhelming recent strategy document (incorporating a profit downgrade) fell flat with investors, and its share price tumbled in the wake of the announcement by about 5%. This doesn’t surprise me as investors cannot even be sure that the current 22 cent annual dividend will be maintained next financial year.  In brief I prefer other blue chip stocks which have better growth prospects and attractive dividends. These include: ASX; Macquarie Group, Wesfarmers, BHP, or even one of the banks, and TABCORP if you don’t mind a bit of punt.

Stop Press

AMP: Former CBA CEO and Future Fund boss David Murray gets the Chairman’s gong at AMP and proffers free advice to the Royal Commission not to overdo it on the regulation side of the banking sector.

APN: Outdoor media advertiser gets an attractive takeover offer from the French Decaux

Ramsay Healthcare; announced a profit downgrade, it’s now through my selling rule and there are better options around.

Reserve Bank:  Unlikely to move interest rates upwards until late this year. 

Stock Tips - Reserved for clients or call Michael at Phillip Capital on 03 86339925 or michaelheffernan.com.au

australian stock market weekly report 

Disclaimer: This publication has been prepared solely for the information of the particular person to whom it was supplied by Phillip Capital Limited (“PhillipCapital”) AFSL 246827.  This publication contains general financial product advice.  In preparing the advice, PhillipCapital has not taken into account the investment objectives, financial situation and particular needs of any particular person.  Before making an investment decision on the basis of this advice, you need to consider, with or without the assistance of an adviser, whether the advice in this publication is appropriate in light of your particular investment needs, objectives and financial situation.  PhillipCapital and its associates within the meaning of the Corporations Act may hold securities in the companies referred to in this publication.  PhillipCapital believes that the advice and information herein is accurate and reliable, but no warranties of accuracy, reliability or completeness are given (except insofar as liability under any statute cannot be excluded). No responsibility for any errors or omissions or any negligence is accepted by PhillipCapital or any of its directors, employees or agents. This publication must not to be distributed to retail investors outside of Australia. 

 

 

About Michael Heffernan

+61 (3) 8633 9925 Email Profile

Michael Heffernan has over 30 years’ experience in the finance and securities industry and is currently a Senior Client Advisor and Economist with a leading Australian Sharebroker Phillip Capital after having been Chief Economist/Lawyer with the Australian Stock Exchange for 13 years, and an Economist with Commonwealth Department of Employment and Industrial Relations for 11 years.
Most recently Michael topped the poll of the Australian Newspaper's Criterion column of his expert tipsters for 2014 with an average increase of 26% over the year. Also Michael was named Stock Picker of the year 2013 and 2016 at the Australian Stockbrokers Foundation Annual Awards Charity Dinner.

Why Choose PhillipCapital?

Expert, Quality Advice

Professional, fully accredited and friendly advisors can help tailor the perfect solution to your needs.

Global Strength and Size

Established in Singapore in 1975, PhillipCapital operates across 16 countries, has over 1 million clients and manages over USD 28 billion assets under management and custody worldwide. You know your investments are safe with us.

Gateway to Americas, Asia and Europe

Expand your investment universe outside of Austraila and reach across the globe. PhillipCapital has access to exchanges across the world.

Speak to an Advisor

Phone Request a Callback:

Phone Toll Free: 1800 214 264

Phone International: +61 3 8633 9800

Website search

Search the PhillipCapital website here.

Request Callback

Fill in the below information and a PhillipCapital representative will call you back as soon as possible.