FNArena’s Weekly Insights – September 13 2023
In this week’s Weekly Insights:
August 2023: Winners & Losers
By Rudi Filapek-Vandyck, Editor
The proverbial cavalry storming over the hill this August reporting season in Australia were the discretionary retailers led by Harvey Norman ((HVN)), JB Hi-Fi ((JBH)) Premier Investments ((PMV)), Super Retail ((SUL)), The Reject Shop ((TRS)) and a number of others.
It wasn’t so much an expression of undiluted strength, more a result of analysts downgrading forecasts too deeply while consumer spending did weaken, but remained resilient overall.
This, however, hasn’t changed analysts cautious stance, and the jury remains out whether resilience remains the key word for the six months ahead, or whether this process of slowing spending on the back of RBA tightening remains poised for the next leg lower.
Those who keep a close eye on the finer details point out there have been plenty of signals and indications of weakening market conditions in the early weeks of the new financial year, and not only for consumer spending locally.
Witness also the implicit profit warning issued on Monday morning by scrap collector Sims ((SGM)), good for a punishment in excess of -10% on the day.
Viewed from a different angle, the not-as-bad-as-feared August results season was effectively ‘saved’ by small cap companies.
Small Caps Commanding The Limelight
Out of the 390 corporate results covered in total, the FNArena Monitor put down 112 (28.7%) as a ‘beat’ versus 109 (27.9%) as a ‘miss’, with the remaining 169 (43.3%) in line with analysts expectations.
But if we limit ourselves to smaller samples, the numbers turn markedly worse…..
