BellPotter Marketing

In the June tech sector report, we have made changes to our key picks since we last updated them in late April, with Infomedia and PWR Group replacing Appen (APX) and Catapult Group (CAT), given the downgrade in recommendation for both to HOLD.

COVID-19 has come with higher credit impairment charges that have also forced the banks to acquiesce to APRA’s wishes for either deferred or materially lower dividends. However, underlying performance in 1H20 continues to be sound and balance sheets are much stronger than ever before.

The market capitalisation of ASX LICs) and LITs dropped by 23.9% to $40.5bn over the first quarter of 2020. The volatility in the market and subsequent large equity sell-off resulted in no new listings in the sector.

ETF trading has increased significantly over the past 3 months, with average daily value traded in March and April exceeding $770m and $460m, respectively. Despite the sell-off that has occurred in 2020, funds have stayed in the ETFs with each month recording positive net inflows.

In this report, we look at the hedge book positions of key ASX-listed producers to estimate what proportion of production is hedged and to what degree it discounts their gold revenues against an assumed spot price of A$2,700/oz.