ASX 200 weekly wrap: Telstra down, Westpac up amid rate hikes

More than $1 billion was wiped from Telstra’s market value, while three of the big four banks enjoyed some of the greatest gains on the share market last week.
Telstra shares down
Source: Kim Britten (Shutterstock)

The benchmark index S&P/ASX200 gained 1.16% to 6,139.50 points and the All Ordinaries went up 1.11% to 6,427.80 points over the course of last week.

The utilities sector led sector gains (+2.74%), followed by the financials (+1.98%), information technology (+1.58%) and health care (+1.26%), while the telecommunications sector fell 2.30%.

Canstar’s General Manager of Wealth Josh Callaghan said while Telstra made some of the biggest losses to close at $3.12 per share last week, it was worth noting that only a month ago they were at just $2.82.

“The market is still trying to find an appropriate pricing level for Telstra shares after sending the stock higher last month off the back of the company’s 5G network plans and news that TPG and Vodafone may merge,” Mr Callaghan said.

ASX 200 Listed Companies – Top 5 Biggest Market Cap Gains and Losses (27/08/2018 to 31/08/2018)
Biggest Gains Biggest Losses
Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price Rank Company $ Change in Market Cap Closing Share Price % Change in Share Price
1 Westpac Banking Corp (WBC) $3,194,360,941 $28.59 3.4% 1 Telstra Corporation Ltd (TLS) -$1,129,863,297 $3.12 -3.0%
2 Australia and New Zealand Banking Group (ANZ) $2,765,924,143 $29.46 3.4% 2 Woolworths Group Ltd (WOW) -$748,594,647 $28.23 -2.0%
3 National Australia Bank Ltd (NAB) $2,218,173,099 $28.42 2.9% 3 Caltex Australia (CTX) -$740,701,874 $30.22 -8.6%
4 BHP Billiton Limited (BHP) $1,830,663,929 $33.28 1.7% 4 Reliance Worldwide Corporation Ltd (RWC) -$675,531,024 $5.33 -13.8%
5 CSL Limited (CSL) $1,615,070,799 $228.00 1.6% 5 Speedcast International Ltd (SDA) -$585,328,797 $4.25 -36.5%
Prepared by Canstar. Prices taken as of week to week close.

Westpac shares rise in wake of rate hikes

Westpac’s market value increased by almost $3.2 billion with its share price closing at $28.59 last week.

The lender was the first of the big four banks to flag interest rate hikes for its variable rate customers last week, citing pressures from rising wholesale funding costs.

The rate hikes followed Westpac’s share price slump the week prior after it reported a surprisingly weak third quarter net interest margin – the difference between how much it buys money for and how much it sells money for in the form of loans.

“Westpac was rewarded by investors for increasing its home loan rates as a way of addressing the contraction in their net interest margin of 0.11 percentage points,” Mr Callaghan said.

“Home loan customers of Westpac may not welcome the increase, however history shows that even after losing a portion of customers to a better deal, most of that increase in rate will flow through to the bottom line which is why investors are happy about it.”

ASX 200 Listed Companies – Top 5 Biggest Share Price Gains and Losses (27/08/2018 to 31/08/2018)
Biggest Gains Biggest Losses
Rank Company Closing Share Price % Change Rank Company Closing Share Price % Change
1 Mcmillan Shakespeare Limited (MMS) $17.94 12.5% 1 Speedcast International Ltd (SDA) $4.25 -36.5%
2 Appen Ltd (APX) $15.41 12.1% 2 G8 Education Ltd (GEM) $2.08 -14.0%
3 TPG Telecom Ltd (TPM) $8.64 11.8% 3 Reliance Worldwide Corporation Ltd (RWC) $5.33 -13.8%
4 Bellamy’s Australia Ltd (BAL) $10.97 11.0% 4 Sims Metal Management Ltd (SGM) $12.53 -8.9%
5 Blackmores Limited (BKL) $164.50 8.2% 5 Caltex Australia Limited (CTX) $30.22 -8.6%
Prepared by Canstar. Prices taken as of week to week close.

Another notable mention for last week’s share price movements was health supplements company Blackmores which gained 8.2% to close at $164.50.

Blackmores released its full-year results last week which revealed the company’s sales revenue increased to more than $600 million and its net profit rose 19% to $70 million.

Baby formula maker Bellamy’s Australia also saw its share price jump 11% to close at $10.97 by the end of the week after an impressive earnings report.

“Bellamy’s had a strong week in the markets off the back of releasing its annual reports, showing a 37% increase in revenue while their EBITDA (earnings before interest, taxes, depreciation, and amortization) came in at $65 million – a big turnaround from its $1 million loss this time last year,” Mr Callaghan said.

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