Australian earnings preview ASX

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.

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