Research Monitor - September 2016 Edition Research05 Jul 2016

The Australian Share Market, as measured by the S&P/ASX300 Index, rose by 3.0% on a price basis and 4.0% on an accumulation basis during the June Quarter.


Markets continued to recover in the early part of the quarter with both April and May posting solid gains of 3.34% and 3.14% respectively.


June was marred by the unexpected outcome of the United Kingdom’s referendum vote on leaving the European Union. Prior to the “Brexit” vote, the market had been down 1.7%, before falling to be down 5% for the month before a strong rally in the last day of trading of the quarter saw the index ending up down 2.4% for the month of June.


Materials and Healthcare sectors were the best performers over the quarter, both rising more than 10%. Ramsay Health Care (RHC) lead the way with a 18.5% return for the quarter amongst the healthcare names, whilst Resources bellwether BHP Billiton (BHP) rose 12.2% for the quarter. Returns from the Banking sector were subdued, with ANZ Banking Group (ANZ) the best of the majors up 4.4%, followed by Commonwealth Bank (CBA) up only 1.4%, National Australia Bank (NAB) down 0.8% and Westpac Banking Corporation (WBC) down 1.6% for the quarter.


Some former market leaders such as Blackmores (BKL) down 25.3%, Flight Centre Travel Group (FLT) down 25.8% and Qantas Airways (QAN) down 29.0%, came back to earth following changes to the profit outlooks of the businesses. Brexit exposed stocks such as BT Investment Management (BTT) down 16.6% and Henderson Global (HGG) down 20.8% were sold off heavily at the end of the month.


A bright spot was once again the Gold Sector, with global uncertainty and low interest rates making the case for gold investing compelling. The price of gold rose 7.3% for the quarter and is now up 25.0% year to date. Newcrest Mining (NCM), the largest listed gold stock, rose 37.0% for the June quarter. Most gold stocks in the index rose between 30% and 50% for the quarter, with the stand-out being Resolute Mining (RSG), up 136% from $0.545 to $1.285 at the end of June. 


Read the full report



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