Research Monitor - September Quarter 2017 Research07 Jul 2017

The Australian Share Market, as measured by the S&P/ASX300 Index, fell by 2.4% on a price basis and 1.6% on an accumulation basis during the June Quarter, reversing some of the gains of the previous quarter.


Investment performance was polarised across the market in the June quarter, with the strongest sector – Capital Goods – rising 8.6% contrasting the worst performing sector – Retailing – which fell 12.4%. Generally speaking, sectors exposed to Australian housing and consumer spending performed poorly. Banks were down 8.7%, Telcos down 8.1% and the Food and Staples Retailing sector was down 7.9%. Sectors to perform well included Transport, Commercial Services, Health Care Equipment and Services and Pharmaceuticals. Stocks exposed to the China food trade such as Bellamy’s (BAL) and a2 Milk Company (A2M) were particularly strong up 68.5% and 40.3% for the quarter respectively. Also travel related stocks such as Qantas (QAN) up 43.7% and Flight Centre Travel Group (FLT) up 32.4% did well. At the other end of the spectrum were stocks most heavily exposed to the weak consumer spending environment and the threat of greater competition in the retail sector, notably The Reject Shop (TRS) down 49.7% and Myer (MYR) down 31.6%.

The stocks in the ASX 300 were taken over during the quarter and removed from the Index notably DUET (DUE), Cover-More Group (CVO) and Generation Healthcare (GHC). A fourth stock to leave the index, Ten Network (TEN) had Receivers and Managers appointed – a rarity amongst ASX300 stocks.

Global markets performed better than Australia over the June quarter, with the MSCI World Index rising 3.4%, the US S&P500 rising 2.6% and the NASDAQ rising 3.9%. Even the troubled Japanese market posted a 6% return. Bond markets, measured by the Bloomberg Composite Bond Index (0+yr) Maturity rose 1% in the quarter and cash returned 0.4%.


Read the full report

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