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Summary
- Amid the ongoing COVID-19 pandemic, there are several companies that continue to perform well, while a myriad of companies lost their charm.
- Given the current scenario, businesses are considering alternate approaches and innovative strategies to ride through this crisis.
- Australian economy is expected to witness impacts due to surging number of COVID-19 cases and new pandemic-led restrictions.
Ever since the beginning of COVID 19 crisis, the Australian stock market has been volatile with a fluctuating trend. On 7 August, Friday, the benchmark index settled at 6004.8, down by 0.62 per cent from its previous close.
Let's discuss 10 stocks from the ASX 200 list amid these turbulent times.
Worley Limited (ASX:WOR)
Headquartered in Australia, global professional services company Worley has bagged a master construction services agreement from Corpus Christi Liquefaction LLC, a subsidiary of Cheniere Energy, Inc. As per the agreement, WOR will deliver structural, mechanical, instrument, civil, electrical, HVAC and marine construction services at Cheniere's Corpus Christi LNG, liquefaction facility in the US.
Once completed, the facility will have three liquefaction trains with an anticipated maximum annual export capacity of 13.5 million tonnes of LNG. The deal has a long-term strategic relevance, as it shows speedy development of an upcoming business in LNG Maintenance, Modification and Operations.
Moreover, BP America, Inc and BP International Limited have entered separate framework deals with Worley for three years. One agreement is for North America and another for Europe, Asia, and Australia.
On 7 August 2020, WOR closed the day's trade at AUD 8.690, up by 0.579 per cent. The last three and six-month return of the stock was noted at 2.6 per cent and -40.72 per cent, respectively.
Westpac Banking Corporation (ASX: WBC)
Westpac's Self-Funding Instalments over securities in Rio Tinto Limited (RIO) - dividend announcement included the following:
During late-July, WBC announced plans to bring back ~1,000 jobs in Australia from overseas, on the back of a surge in demand for customer assistance. Westpac CEO Peter King stated that the announcement means going ahead with remodelling the business and mortgage operations, supporting local jobs, overcoming the risk of offshore disruption, and speeding up the ability to simplify processes through digitisation.
This plan has been made possible with the changing work patterns amid this crisis and technology infrastructure upgrade over the recent years, he added. The creation of 1k roles is expected to initially increase costs by around AUD 45 million per annum by end-FY21.
On 7 August 2020, WBC traded flat at AUD 16.760, with a market cap of AUD 60.53 billion. The last three and six-month return of the stock was noted at 7.44 per cent and -32.99 per cent, respectively.
Sydney Airport (ASX: SYD)
Traffic performance update by SYD for June 2020 highlighted the following:
- Total passenger traffic was 172,000 passengers, representing a decline of 94.9 per cent on the PCP.
- 32,000 international travellers passed through the airport, a drop of 97.6 per cent from the same period a year ago.
- Total domestic passengers stood at 140,000, down 93.3 per cent on the PCP. However, number of domestic passengers was up in June as compared to April and May.
On 7 August 2020, SYD closed the day’s trade at AUD 5.340, moving upward by 0.565 per cent. The last three and six-month return of the stock was noted at -1.48 per cent and -38.12 per cent, respectively.
Magellan Financial Group Limited (ASX: MFG)
On 7 August, Magellan Financial Group announced funds under management update as at 31 July 2020. In July, MFG witnessed net inflows of AUD 769 million that comprised net retail inflows of AUD 269 million and net institutional inflows of AUD 500 million.
The company, in July, paid distributions (net of reinvestment) of AUD 650 million and a platform mandate paid distributions (net of reinvestment) of AUD 109 million. These amounts have not been included in retail flows.
On 7 August 2020, MFG closed the day’s trade at AUD 61.110, down by 1.052 per cent. The last three and six-month return of the stock was noted at 15.21 per cent and -11.79 per cent, respectively.
Afterpay Limited (ASX:APT)
Recently, Afterpay Limited announced the successful completion of its Share Purchase Plan (SPP), offering opportunity to eligible shareholders in Australia and NZ to apply for up to AUD 20,000 worth of new shares in Afterpay, free of any transaction and brokerage fees.
The issue price under the SPP stood at AUD 66.00 per share. The offer was sent to 53,465 eligible shareholders and total valid applications received was 10,110, and they all have been accepted. The company will issue 2,070,776 shares, with allotment to successful applicants expected on 6 August 2020.
In July 2020, the company raised AUD 650 million through a fully underwritten institutional placement. Proceeds from the SPP and placement are planned to be used to accelerate investment in growing underlying sales, as well as global expansion in the short term.
On 7 August, APT closed the day's trade at AUD 70.700 and was down by 0.786 per cent. The last three and six-month return of the stock was noted at 78.99 per cent and 79.26 per cent, respectively.
Tabcorp Holdings Limited (ASX:TAH)
TAH expects to incur non-cash goodwill impairment charges between AUD 1,000 million and AUD 1,100 million in financial outcomes for the year ended 30 June 2020. The charges are related to the Wagering & Media and Gaming Services businesses.
Also, TAH anticipates FY20 EBITDA between AUD 990 million and AUD 1,000 million with net profit after tax expected in the range of AUD 267 million to AUD 273 million. The results inclusive of goodwill impairment charges are subject to completion of the external audit and Board review and approval of the FY20 financial statements.
On 7 August 2020, TAH closed the day’s trade at AUD 3.550, up by 0.567 per cent. The last three and six-month return of the stock was noted at 13.06 per cent and -22.66 per cent, respectively.
Reliance Worldwide Corporation Limited (ASX: RWC)
RWC's manufacturing facilities in Melbourne come under the permitted industry category, as per the Victorian government guidelines amid the stage 4 restrictions in the city. Consequently, all the facilities will continue to operate.
Products produced at its four plants in Melbourne are supplied into the domestic market in Australia and across the Asia-Pacific region.
On 7 August 2020, RWC settled at AUD 2.650, down by 1.119 per cent from its previous close. The last three and six-month return of the stock was noted at 7.29 per cent and -44.33 per cent, respectively.
QBE Insurance Group Limited (ASX:QBE)
QBE announced a change in the leadership of its Australia Pacific division on 7 August. The company has appointed Mr Frank Costigan to the interim role of Managing Director Australia and together with Mr Declan Moore, CEO and Chief Customer Officer New Zealand & Pacific will assume interim responsibility for the AUSPAC division.
The leadership change was announced as CEO Australia Pacific, Mr Vivek Bhatia is moving out of the group to take up a new opportunity with Link Administration Holding Limited (ASX:LNK).
With a market capitalisation of AUD 14.82 billion, QBE closed at AUD 9.940 on 7 August 2020, down by 1.487 per cent. The last three and six-month return of the stock was noted at 32.36 per cent and -29.10 per cent, respectively.
Nine Entertainment Co. (ASX:NEC)
Last month, Nine Entertainment announced the resignation of its Chief Financial Officer Paul Koppelman due to personal reasons. Graeme Cassells, who is the Group Financial Controller, will take on the role of acting CFO.
Nine is preparing the final year accounts and is expecting EBITDA in the range of AUD 390 million to AUD 410 million. Wholly owned net debt of the company is expected to be AUD 300 million at 30 June 2020.
On 7 August 2020, NEC closed the day's trade at AUD 1.430, up by 3.249 per cent. The last three and six-month return of the stock was noted at 2.14 per cent and -23.12 per cent, respectively.
Xero Limited (ASX: XRO)
Xero, an easy-to-use cloud-based business platform for small businesses and their advisors, registered strong growth in FY20 ended 31 March 2020, delivering top-line growth with a positive free cash flow and net profit outcome. COVID-19 impacts fell late in FY20 and had a relatively modest impact on the company’s performance.
Its operating revenue grew by 30% to NZD 718.2 million, while AMRR went up by 29% to NZD 820.6 million. Total subscriber base stood at 2.285 million at the end of the year. Net profit was noted at NZD 3.3 million, representing an improvement of NZD 30.5 million over a net loss of NZD 27.1 million.
On 7 August 2020, XRO closed the day’s trade at AUD 91.060, down by 0.513 per cent. The last three and six-month return of the stock was noted at 10.91 per cent and 4.97 per cent, respectively.
