Australian earnings preview – ASX

Australia

Full Year:

The Australian Securities Exchange (ASX) is the primary Australian listings venue and one of the world’s top 10 listed exchange groups by market capitalization. ASX Ltd. operates the Australian Stock Exchange and the Sydney Futures Exchange, offering a full suite of services including listings, trading, clearing, and settlement. It reports its full-year numbers on the 20th of August.

ASX Ltd shares are defensive in uncertain economic times and have benefited during the pandemic from the “working from home” environment. During the peak coronavirus period, trading volumes rose to levels exceeding the daily processing capacity forcing the regulator ASIC to limit the number of daily trades big brokers can execute. Growth in trading volumes drives ASX Ltd.’s earnings higher.

In the ten-months ending in April 2020, ASX Ltd reporting a 34% increase in trades and the total value of trades increased by 29% as market volatility rose to near all times highs. Futures volumes also rose by 6% as the RBA cut interest rates. The consensus statutory EPS estimate is around 250 cents per share.

Technically, the decline from the all-time $89.92 high of early June appears to be a correction after an impulsive rally from the March $63.02 low. Once the correction is complete, the uptrend would be expected to resume.

As such, we would consider buying a dip into the support offered by the trend channel and the May 2020 low, $70.00 area. Keeping in mind, a more aggressive entry may be required if the share price makes a sustained break above trend channel and horizontal resistance $86.00 area, confirmation the uptrend has resumed.

Australian earnings preview – ASX

Source Tradingview. The figures stated areas of the 12th of August 2020. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.