FNArena’s Weekly Insights – October 12 2020

In this week’s Weekly Insights:

-Investment Themes In Australia
-Conviction Calls
-That Dreadful ASX Website (But Exciting News Ahead for FNArena)
-Rudi Talks

Investment Themes In Australia

By Rudi Filapek-Vandyck, Editor FNArena

As per tradition, one of the popular themes that dominated the local share market post Canberra-budget has been: which companies and sectors are the winners and losers?

The obvious answer, judging by the price action over the week past is: the banks are major beneficiaries.

Firstly, a relaxed framework around responsible lending almost by definition means more credit shall be provided both to small businesses and aspiring property owners.

Already sales teams inside the major banks have been busy contacting bank customers, making sure everyone understands the government wants small businesses to invest, and there are now instant tax benefits available.

In addition, putting more money in people’s pockets while propping up infrastructure and construction in general lowers the lingering risks for the Australian economy, and thus for the banks.

In the end, what is good for Australia, economy-wise, can only be good for the banks. Add cheap looking valuations and investors quickly read the message.


It goes without saying, investing in the share market beyond the immediate outlook is seldom guided by one such straightforward theme only, and this time is no different.

I couldn’t help but noticing, for instance, local representatives of the technology & disruption-theme, Altium ((ALU)), Appen ((APX)), NextDC ((NXT)) and Xero ((XRO)), equally all had a jolly good time in October thus far.

Message to our self: those tectonic changes will remain around us for a lot longer, as do low bond yields, low inflation, and massive stimulus and liquidity injections from central bankers; all factors supportive of share prices carried by cloud, SaaS, wireless, blockchain and other modern-day adoptions across the masses.

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