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Dial down US exposure as volatility reigns: 5AM Capital
With volatility likely to remain heightened within global equity markets throughout United States President Donald Trump’s remaining 1,566 days in office, Sam Chipkin Founder and CIO of 5AM Capital warns investors that history is less likely than ever to provide meaningful insights into future performance. One way to protect against earnings pressure headwinds confronting companies in the wake of Trump’s tariffs, adds Chipkin is to focus on stocks less exposed to cyclical downturns. “Trump volatility isn’t over and we should expect a range of headlines and decisions that perpetuate a risk-off position by institutional and retail investors alike,” says the Bondi-based fund manager. Chipkin doesn’t expect normal headline volatility until U.S.-China trade rhetoric dials down.Less US market exposureWhile Chipkin doesn’t expect Trump’s tariff mayhem and broader governmental interference to result in a huge market wipeout, he does urge investors to be less exposed to overheated U.S. markets. With the S&P 500 trading at a price to earnings (P/E) ratio of 33 times, 80% above its long-term median, Chipkin worries that the market is still priced for perfection heading into more volatile trading conditions. In light of these v
Stockbroking
Azzet’s insights into potential ASX takeover targets
Given the premium acquiring companies are willing to pay, investors may wish to give some thought to what unloved ASX-listed stocks look ripe to exit the Australian bourse later this year. The ASX has always been a fertile hunting ground for undervalued stocks, so much so that the ranks of listed bellwether blue-chip stocks are thinning fast, with stocks valued at as little as $1 billion now sitting well within the ASX300. Our bourse is shrinkingM&A activity is clearly having a material impact on both the ASX size (by value) and the availability of quality stocks for punters to invest in. Following on from its recent acquisitions of Crown in 2022 and more recently AirTrunk, the $1.7 trillion private capital giant Blackstone is said to have a number of companies in its sights for takeover later this year. But Blackstone is just one of many institutional investors that see bleeding value in key ASX stocks, and it’s not always large caps that are on its radar. Earlier last week we witnessed the Montreal-based dollar store chain, Dollarama (TSX: DOL) acquire the largest discount retailer in Australia, The Reject Shop (ASX: TRS). When you look at the premium Dollarama was willing to cough up for The Reject Shop - 112%
Stockbroking
ASX is an outlier amid record global dividend growth
While February’s reporting season revealed a 6.4% fall in Australian dividends on an underlying basis, global dividends during 2024 rose by a corresponding amount. With local listed stocks cutting payouts amid economic pressures, should Australian investors look more to offshore markets to maintain stable income streams? According to the Janus Henderson Global Dividend Index, global dividends grew to a record US$1.75 trillion, up 6.6% on an underlying basis. However, headline growth of 5.2% reflected lower one-off special dividends and the stronger U.S. dollar. While 88% of companies globally raised dividends or held them steady in 2024 - a median increase of 6.7% - only 54% of ASX-listed stocks issued higher dividends during the last reporting season. Overall, three-quarters of Australian companies have maintained or grown their dividends.Shrinking ASX pool of large dividend payersIn response to weak profits, cost pressures, and sector-specific challenges, key companies in the mining and banking sectors - including Woodside (ASX: WDS), BHP (ASX: BHP), and ANZ Bank (ASX: ANZ) - took a razor to their payouts. Due to the progressive shrinking of the ASX in recent years, there’s even greater reliance on a smaller pool of
Stockbroking
ASIC adds ASX clearing and settlement reforms
The Australian Securities and Investments Commission (ASIC) will require the Australian Securities Exchange (ASX) to publish a comparison of its clearing and settlement fees with international providers, with the goal of encouraging competitiveness. The ASX must ensure transparent and fair pricing for its clearing and settlement services, offer its services on non-discriminatory commercial terms, and allow third-party access to its technology systems, ASIC said. “This is about limiting ASX’s ability to misuse its monopoly power to deter new entrants,” said ASIC chair Joe Longo. “The new rules support the long-term confident and informed participation of investors in Australian financial markets by establishing clear obligations to promote competitive outcomes in the provision of clearing and settlement services.” These rules were introduced under the 2023 Competition in Clearing and Settlement reforms, which gave ASIC the ability to regulate the ASX’s cash equity clearing and settlement facilities. ASIC began investigating a December outage in the ASX’s CHESS settlement system earlier this month. A Batch Settlement planned for 20 December was postponed to the following Monday after CHESS reported an outage due to an
Stockbroking
ASX Ltd climbs on interim dividend, revenue lift
ASX Ltd (ASX: ASX) appears to have defied gravity this morning with shares in the bourse operator trading around 9% higher despite the interim profit failing to meet analyst expectations. While the market was expecting $249 million profit in 1H FY25 it came in at $243.5 million, still up 5.6%. However, what clearly made shareholders happy was an interim dividend of $1.112 per share, up 9.9%. Benefitting from growth in net interest income, underlying net profit after tax increased by 10%. The company attributed a 5.9% lift in operating revenue to $541.9 million in the half to growth from its markets, technology & data and the securities & payments divisions. While Total Listings revenue was stable at $104.9 million, the Markets, Technology & Data and Securities & Payments businesses were up 9.9%, 6.7% and 5.2% respectively. ASX CEO Helen Lofthouse used today’s interim update to reassure the market that the troubled five-year transformation plan to replace its aging CHESS technology is progressing. Recent incidents with CHESS resulted in major delays in Batch Settlements, with some brokers having to borrow to settle their clients’ accounts. In light of these mishaps, Lofthouse reassured the market that

Stockbroking
Singapore party ups ante with rival Selfwealth bid
ASX minnow, Selfwealth (ASX: SWF) breathed some rare air this afternoon with the share trading services business up around 4% following revelations that a fourth suitor has thrown an additional bid into the ring to acquire the company. Last month Bell Financial Group (ASX: BFG) made a $0.25 per share offer for SelfWealth to add scale to the group’s online broking business, growth, and cost synergies. Bell’s offer follows a 23¢ bid made last November by AxiCorp Financial Services which followed an opportunistic 17.5¢ a share bid by Stake after the share price continued to bounce lower during 2023. Bell has been hell bent on growing its book after launching an unsuccessful bid to merge with E&P Financial (née Evans Dixon) last year. Meanwhile, Bell has told shareholders - who vote on the deal next month - that spending $57.7 million on Selfwealth would increase its active portfolios by 130,000 and add $11 billion to the existing $94 billion in its online broking business. Syfe bid follows blocking trade last Friday Fast forward four weeks and Singapore-based Svava Pte Ltd, which owns the Syfe platform in Singapore, Hong Kong and Australia has upped the ante by lobbing in a counter (all-cash scheme) bid at 28¢ per
Stockbroking
ASX puts stocks on notice: Behave or face scrutiny
With continuous disclosure issues - also known as ‘speeding fines’ – by ASX-listed companies on the rise, market operator the Australian Securities Exchange (ASX: ASX) has hinted at plans to crackdown on companies that carelessly or intentionally flout their compliance obligations to the Corporations Act 2001 and the ASX Listing Rules. This is a wakeup call for executives of public companies who are not used to the ASX actively policing poor disclosure so rigorously. With a growing number of listed stocks falling short of their obligations to keep investors and the market informed, the ASX recently told The Australian it is looking at expand its use of the censure powers afforded to it by the regulato,r the Australian Securities & Investments Commission (ASIC). Based on powers bestowed on it five years ago, the ASX - as the licensed operator of markets and clearing and settlement facilitator – has the right to ‘ping’ listed companies for poor compliance. Most of these relate to pricing enquiries around abnormal trading and whether a company has disclosed market sensitive information at the time it should have. Court action Worst case scenarios can result in the ASX referring serious breaches of listin
Stockbroking
Fresh technical ASX jitters alert market to more delays
Despite its best intentions of starting the new trading year with technical issues that plagued the ASX (ASX: ASX) in 2024 behind it, the market operator is yet again confronting fresh glitches which are making market participants jittery about ongoing delays this year. The ASX’s systems update this morning that undisclosed issues within its before business report to Austraclear – which settles approximately $100 billion worth of transactions per day - had been resolved hinted that the issues plaguing pre-Christmas trading may not be behind it. Fortunately, with many investors waiting for key economic data next week – notably the release of consumer price index (CPI) data and retail sales figures – trading volumes today remain in holiday mode. Recent antics on the ASX, on the cusp of Christmas, had serious implications for some brokers; collectively they were left having to find an estimated $3 billion for trades yet to settle. Much of the short-term funding issue relates to brokers having paid all their clients with their own funds despite not being paid by the ASX. As the central clearing participant (CCP) for all Australian stock markets, the bourse is required to settle equity trades on what’s known as T+2
Stockbroking
Financial forecast: What's brewing in business land
As we look ahead, the global and Australian markets are poised for a period of further critical data releases and key earnings reports. Stay tuned as Azzet delves into the key events and reports that will shape the financial landscape in the coming weeks.Let's get down to businessForbes Australia Business Summit 2024: Forbes Australia has announced its third annual Business Summit, scheduled for November 19 at the Hyatt Regency in Sydney. The summit will feature prominent speakers like Peter Freedman AM, Craig Blair, Jennifer Child, and Cody Simpson, among others. The event aims to provide insights and inspiration on the biggest opportunities and challenges facing businesses today. Australian Big Four Banks Full-Year Results: KPMG will release its analysis of full-year financial results for Australia's four major banks (NAB, CBA, ANZ, and Westpac) on November 8. The analysis will provide insights into the performance of these banks and the broader banking sector in Australia. Cryptocurrency Market Movements: Bitcoin and other cryptocurrencies have rallied recently, with Bitcoin approaching US$70,000 and Solana outperforming Ether. As of 6pm (AEDT) Friday, 25 October, the price of Bitcoin (BTC) was approximately US$68,162.