Rising real estate is making the Australian stock market shine

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WEEKLY MARKET REPORT

The Australian stock market has weathered offshore valuation swings to push for an 11-month high as higher property prices help boost bank stocks and other financial stocks.

An almost guaranteed continuation of the Reserve Bank’s reluctance to print money has almost resulted in sustained real estate price gains this year, and that’s good news for the stock market too – especially for banks, which are allowed to write more and larger loans.

At the end of the week, the ASX 200 index was up 3.5% at 6840 points, up 1.1% on Friday alone.

This was supported by the big banks, with NAB (ASX: NAB), Westpac (ASX: WBC), ANZ (ASX: ANZ) and Commonwealth Bank (ASX: CBA) each gaining at least 1%.

Potential for higher dividends for bank stocks

There is also the pull of potentially higher dividends returning for banks after regulatory pressures and frozen mortgages have dramatically eased. Commonwealth Bank results, expected Wednesday, need to be closely monitored for higher payouts.

With the RBA’s commitment to keep interest rates low for years, investors are keen to find returns wherever they can and the stock market is a primary goal.

REA Group rides soaring real estate to drive investor returns

The REA Group (ASX: REA) played well with the yield and real estate themes. Shares rose 1.6% after real estate offers rose 13% on buoyant property markets.

REA’s net income rose 17% to $ 173.4 million, while the company behind www.realestate.com.au increased its dividend 7% to c59.

Technology was the other trend that drove the market. The IT index rose 2.2% on Friday, drawing on a near record high for the purchase of the later-paid company Afterpay (ASX: APT) of $ 151.

News Corp has some digital goals

One of the biggest single contributors was a strong quarterly result from News Corporation (ASX: NWS), which rose 13.9% to $ 28.41.

The digital advertising dollar improved sharply, book publishing sales rose 23%, and digital property sales growth was double-digit.

Shares in South32 (ASX: S32) went the other way, down 2.9%. Plans to expand a large coal mine in Wollongong, NSW, were rejected by the independent planning committee due to risks to the Greater Sydney drinking water catchment area.

Small cap stock action

The Small Ords Index rose 3.63% this week to close at 3,190.3 points.

ASX 200 versus Small Ords

Small-cap companies that made headlines this week were:

Rent.com.au (ASX: RNT)

Rent.com.au’s share price soared this week after it was revealed that Bevan Slattery had led a $ 2.75 million investment in the company.

The company made a placement that issued 55 million shares to raise $ 2.75 million in Mr. Slattery’s investment vehicle capital [b] Trust in buying $ 2 million worth of shares and becoming a major shareholder.

Mr. Slattery is a well-known Australian technology entrepreneur and said Rent is a disruptive platform with “great potential” and scalability.

King Island Scheelite (ASX: KIS)

Another small cap that made headlines this week was King Island Scheelite with news that the Tasmanian government had taken out a $ 10 million loan.

The loan will support King Island’s proposed rehabilitation of its wholly owned Dolphin Tungsten Project on Tasmania’s King Island.

The King Island chairman said the company was “pleased” to receive the funding, which will “significantly improve” the company’s financial strength and flexibility.

BlackEarth Minerals (ASX: BEM)

The aspiring graphite miner BlackEarth Minerals has signed a Memorandum of Understanding to supply the US company Urbix Inc with high quality graphite concentrate.

Urbix is ​​developing a downstream processing facility in the United States where BlackEarth will supply graphite concentrate from its Madagascan project and other high quality concentrates through supply agreements.

In addition, BlackEarth and Urbix plan to form a joint venture that may include the development of a facility in Madagascar or WA to produce a significant amount of purified graphite for the growing electric vehicle and alternative energy markets.

Incannex Healthcare (ASX: IHL)

Incannex Healthcare has received encouraging results from an in vivo study examining the anti-inflammatory effects of its drug IHL-675A on pulmonary neutrophilia.

Pulmonary neutrophilia is a known leading cause of chronic obstructive pulmonary disease, asthma, bronchitis, and other inflammatory respiratory diseases.

Following positive results in the evaluation of the drug for SAARDS, which can be a fatal side effect of COVID-19, Incannex has expanded its potential treatment markets for IHL-675A.

Zicom Group (ASX: ZGL)

Equipment manufacturer Zicom Group has received S $ 60 million (A $ 59.2 million) for the development and delivery of liquid gas propulsion systems for oil tankers.

Singapore-based Zicom will deliver the systems to a shipyard in the Guangzhou region of the People’s Republic of China. The systems are used for several ships that are being built for an unknown “leading” European oil tanker owner.

Sim Kok Yew, CEO of Zicom, said the contract reflects the company’s increasing momentum in the shipping sector.

De.mem (ASX: DEM)

AGL Energy has placed an order for $ 550,000 with De.mem to supply water treatment equipment to one of its Australian power plants.

The deal continues De.mem’s expansion into the Australian power generation sector and follows a $ 400,000 deal in September for a high purity water treatment system.

Andreas Kroell, CEO of De.mem, said the power generation sector is an important market for the company as it requires large quantities of the highest quality treated water for use in boilers, turbines and cooling towers.

Anax Metals (ASX: ANX)

Pilbara explorer Anax Metals discovered broad zones of copper, lead, zinc, gold and silver mineralization while drilling the Mons Cupri target on the Whim Creek project.

The drilling intersected mineralized zones up to 62 meters thick and with numerous high quality intervals.

Notable results were 62 meters at 1.9% copper, 1.03% zinc from 78 meters, including 7 meters at 4.75% copper and 2.74% zinc; 18 m with 5.2% zinc, 2.48% copper and 1.53% lead, including 3 m with 10.34% zinc; and 11 m at 5.01% zinc, 5.22% lead and 0.87% copper.

Whim Creek has a current JORC resource of 6.9 million tons at 0.93% copper and 1.83% zinc.

Next week

The week ahead will replace the guesswork and guesswork that has been telling the stock market for months with some cold, hard numbers as a series of company results are released.

There are many influential results for the first week with Argo Investments (ASX: ARG), Boral (ASX: BLD), Challenger (ASX: CGF), James Hardie (ASX: JHA), Insurance Australia Group (ASX: IAG), Commonwealth Bank (ASX: CBA), Unibail-Rodamco-Westfield (ASX: URW), Transurban Group (ASX: TCL), Downer EDI (ASX: DOW), Telstra (ASX: TLS), AGL Energy (ASX: AGL), Newcrest Mining (ASX: NCM) and Computershare (ASX: CPU) are just a few examples of corporate reporting.

Business and consumer confidence numbers are likely the statistical highs in Australia, while overseas inflation data is released in the US and China, giving traders an idea of ​​how the world’s two largest economies are recovering.

It’s a really big week for vacation breaks as New Year’s Day keeps the Shanghai Stock Exchange closed for five consecutive sessions starting February 11th.

The New Zealand Stock Exchange will remain closed for Waitangi Day on Monday, and the markets in Singapore, Hong Kong, Japan, Indonesia and the Philippines will remain closed for at least a day.

This week’s top stocks




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