ASX Weekly: Afterpay, Rio Tinto, Telstra, CommBank, Westpac reach higher as Aveo, ANZ and Woodside fall

Fintech company Afterpay endured a rollercoaster ride on the share market last week, while big guns Rio Tinto, Telstra, Commonwealth Bank and Westpac recovered ground.

The last trading week for the 2018/19 financial year saw the overall Australian share market slide from the near-record highs of the week prior, with the S&P/ASX 200 down 0.47% to close on Friday at 6,619 points and the All Ordinaries down 0.52% to close at 6,699 points.

Most sectors fell, including Industrials, which declined by 1.93% to finish at 6,752, with Utilities sliding the most, by 3.91% to finish at 8,201.

While the market has enjoyed an upward trend in growth since the beginning of the year, AMP Capital chief economist Shane Oliver said recent events, such as US political policies involving China and Iran and the G20 Summit, negatively impacted trading last week.

“Overall, we remain optimistic on shares on a 6-12 month view…,” Mr Oliver said. 

“But after a strong rebound in June – which saw Australian shares gain around 3.5% leaving them up 17% year-to-date – they are vulnerable to a short-term pull back in the months ahead on weak data, trade uncertainties and Middle East tensions.”

Financial Technology company Afterpay Touch’s share price finished up 6.8% higher at $25.07, after a tumultuous few weeks where its share price wavered between its highest closing price to date – $28.46 – on May 7, down to $20.27 on June 17, and then up again ten days later to $27.83. 

After a strong stock market performance in April and May, the company received an AUSTRAC notice on June 12, requiring an external audit. Last week, the company released a statement saying that they were “taking the audit very seriously”, and that co-founders Anthony Eisen and Nick Molnar were committed to sticking around. 

“Anthony and Nick do not intend to sell any further shares during the next financial year (FY2020),” the statement said. 

However, after a rally on Friday morning, Afterpay shares fell that afternoon by about 15%. This followed global payments technology juggernaut Visa announcing they would pilot an installment-style repayment plan, similar to Afterpay’s payment structure.    

The market capitalisation gains winners list was filled with household names this week. 

Shares in two of the “big four” banks, Westpac and Commonwealth Bank, went up 0.7% and 0.9% respectively. CommBank’s share price was $82.78 at close on Friday, to raise their market capital by $1,345m, while Westpac finished at $28.36 to add $1,873m. However, ANZ Bank lost 1% to finish at $28.21, wiping $836m off its value, although the bank’s shares have been trading strongly since the beginning of the year when its stock was priced at $23.68 (at close on January 2). 

Rio Tinto, which topped the biggest market cap losers list last week, recovered by 2.4% for a Friday finish of $103.76 a share, putting on about $891m in capital. It had been at $105.71 a share on June 19, but dropped to $101.54 on June 20 after revising its iron ore outlook, regaining ground since then.

Telstra shares, which also made the losers list last week, regained 1.9%, to add more than $832m to the company’s value.  Telstra launched a major overhaul of its mobile phone plans on Tuesday, as part of a longer-term restructuring strategy. 

Shares in the food, alcohol and hardware company Metcash, which owns brands such as IGA and Mitre 10, fell by 18.4% to $2.57. The company’s full-year financial results, released on June 24 for the year ending 30 April, showed earnings before interest and taxes (EBIT) declined 1.4% to $330.0m. While their alcohol and hardware divisions’ EBIT had risen since the last financial year, their food arm – the largest sector of their business – had decreased 3.0% to $182.7m. 

Aveo lost 10% of its share price to finish at $1.88 a share, after updating their profit outlook for FY2018/19. The statement said that end-of-financial-year results would be “adversely” affected by “deteriorating residential property market conditions across Australia and uncertainty around future retirement sales and settlement levels”.

“The Australian residential property market remains subdued, although there has been some improvement since mid-May,” the statement said. “This continues to have an adverse impact on the timing of prospective residents who are seeking to settle on their existing properties and move into seniors living accommodation.” 
Energy company Woodside Petroleum also had a market cap stumble, losing 2.1% or $738m off its value, to close at a price of $36.36 a share. The fall comes after fluctuations in the global oil price, as well as an announcement by the company that LNP production had restarted at its Pluto plant, in Western Australia. A delay in the upgrade of the plant saw the company revise profit predictions in June.