ASX Ekes Out A Gain In May As Telstra Weighs
For investors of all types, May was not a month to boast about. The ASX 200 added 0.5% on Thursday to end the month at 6011.9. That was a loss of around half a per cent.
Seven West Media stood out with a 44% surge to 82 cents, A possible merger partner, Southern Cross saw its shares up 7.5%.
Nine Entertainment shares jumped more than 6% on Thursday, but still lost nearly 3.4% for the month. Fairfax Media shares fell on Thursday and ended May down 6%.
Logistics group, WiseTech Global’s upgrade of revenue (by $3 million) saw its shares rival those of Seven West Media and jump nearly 44% $14.43 - in dollar terms a far better performance than Seven’s rise.
The banks did poorly as stories from the Royal Commission undermined investor confidence. Commonwealth Bank shares lost just over 6%, NAB shares fell nearly 9%, Westpac shares were off 5% and ANZ shares lost 1.8% (which was relative ‘outperformance compared with its peers).
BHP and Rio shares helped keep may alive for most of the month, but the worries about the financial stability of Italy this week hit sentiment, as did a brief slide in oil prices.
BHP shares ended up 1.2% for the month, while Rio shares closed nearly 2% higher on Thursday for a monthly gain of 1.1%. Fortescue Metals, which announced a $US1.7 billion spend on a new WA mine this week, saw its shares fall 2.5% in May, a loss halved by Thursday’s rise of 2.6%.
CSL enjoyed another strong month of growth as its shares hit record highs with the shares up 8.6% higher to $185.08.
Qantas shares did even better, up just over 10% as it shrugged off higher oil and fuel prices off the back of guidance for a record pre-tax profit of between $1.55 billion and $1.60 billion for the year to June 30.
A $40 million on-market share buyback lifted IPH shares 22.7%, while a takeover offer for Sino Gas & Energy saw its shares were up 46.9%.
Wesfarmers shares rose nearly 4% despite it biting the bullet and selling its dodgy UK hardware business, Homebase for a pound, taking a massive loss.
But the shares of two other companies who went offshore in May - RWC (Reliance Worldwide) and Reece, saw their shares outperform the market with gains of nearly 20% for RWC and nearly 11%g for Reece.
Both were the stars of the ASX in may given the enormity of their moves (and the jitters triggered by Wesfarmers’ Homebase debacle)
No such luck for Telstra as its shares hit a series of seven year lows as multiple network outages and an increasingly competitive market left investors sceptical that the Telco can maintain momentum and its reduced, 22 cents a share payout to shareholders.
Telstra shares fell 12% in May to $2.80. Myer shares lost 8% after weak sales and a new CEO. Woolies shares ended off half a per cent.
Metcash shares were hammered in the final week of May after it lost a big South Australian grocery supply contract and with fears of other losses.
The shares fell 21% this week and nearly 20% for May ending at $2.89 .
The federal budget’s changes to superannuation saw Link Administration’s shares fall 17.6% to $6.84 this month.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.