Local investors seem desperate for a positive story at the moment.
For instance they have shrugged off the bad news from QBE about its insurance cover this year and the likelihood of a cut to dividend and a small profit and loss.
The shares fell 3.5% on that news on Tuesday, but recovered 2.8% on Wednesday and yesterday added another 1.6% as the shares ended at $10.26 – 8 cents above the holiday Monday close of $10.18.
For all intents and purposes the bad news has been wiped from investor thinking and QBE is now investible again, especially with many analysts claiming 2018 is looking good because of expected premium increases flowing in the wake of the spate of natural disasters for the insurance sector in 2017.
And in a similar vein, investors grabbed the ness of an upgrade for Qantas shares yesterday from Goldman Sachs and sent the shares to all time highs.
Overnight Wednesday Goldman Sachs upgraded the airline to buy and raised its target price in a note to clients.
Shares in the jumped 3.7% at $6.15 in Sydney after the Goldman raised its target price for the stock by $1.18 to $6.86.
The new target price represented a 15.6% premium to Wednesday’s close and the shares held on to most of yesterday’s gains to end the day up 3.2% at $6.12, an all time closing high.
In fact the shares eased in the middle to the day to be up less than 2.5%, but rose again in the afternoon as the wider market fell, an indication of how much investors want to hop on this price growth spurt from the country’s biggest airline.
Qantas shares had risen steadily since the start of 2015 but really took off at the start of 2017 and were up 90% for the year to date.
Qantas made an underlying profit of $1.5 billion in the 2015-16 financial year – the highest in its 97-year history – and followed that with an underlying profit of $1.4 billion in 2016-17. That follows about 4,800 job cuts at the airline since 2014, plus changes to its fleet changes and the addition of new, higher margin destinations – such as changing its stopover on the London route back to Singapore from Dubai.
