With the ASX200 closing above 7300 points on Thursday and up over half a percent for the prior five days, investors should be cheering a new record high and exceptional portfolio performance since the Covid lows of 2020. Many, however, are concerned about pockets of overvaluation, and nabtrade cash balances continue to climb to their highest levels on record despite interest rates well below 1%. In relatively subdued trading, investors are taking profits and rebalancing their portfolios prior to 30 June, and are finding few bargains to tempt their wallets.
Bank shares have been heavily sold with investors taking profits as they climb to post Covid highs. CBA shares (CBA) have held above $100, leading to trimming across the portfolio from investors sitting on healthy profits. Nab (nab) bucked the trend when Austrac’s concerns about money-laundering and compliance procedures made the front pages, leading to a 3% fall in the share price and some buying. Over 30% of trades were sells, indicating a lower level of conviction than would usually be elicited by a substantial fall in the price of one of the big four. Nab remains nabtrade’s most held stock. Macquarie (MQG) remains mixed.
CSL (CSL) hit a six month high of nearly $299 in intraday trade on Thursday, closing at $295.21, well above its lows below $250 earlier in the year. A strong buy during 2020 and during the lows of 2021, many investors have taken the opportunity to sell into strength this week. While Cochlear (COH) goes from strength to strength and Resmed (RMD) was also strong this week, up nearly 4% on Thursday, investors otherwise stayed away from the healthcare sector.
Fortescue Metals (FMG) is sitting below last month’s high and well below its peak in January, but is up over 50% year on year. Investors have been taking profits. BHP (BHP) has been mixed while Rio Tinto (RIO) has failed to make the top 20 most traded stocks.
Followers of the tech space have had plenty to keep themselves busy this week. Altium (ALU) received an indicative non-binding offer from US software giant Autodesk Inc (ADSK.US), which sent shares soaring 39%. They fell 7.5% on Wednesday but gave plenty of investors the opportunity to take profits, with the stock a 97% sell on both Monday and Tuesday. Autodesk’s offer is below the stock’s 52 week high, leading the board to reject the offer. Market software provider Iress (IRS) was the subject of rumours that investment bank Barrenjoey was seeking merger and acquisition opportunities for the company; the share price bounced over 18%, leading to heavy selling on nabtrade. Investors bought recently beaten up tech stocks including Appen (APX) and EML Payments (EML).
In international markets, the ‘meme’ stocks continue to attract punters, with GameStop (GME.US) and AMC (AMC.US) Entertainment fans congregating on Reddit forums to talk up their favoured stocks. Blackberry (BB.US) has joined the fray, having jumped from $8 to $25 in early February when ‘stonks’ fervour was at its peak, before falling back to below $8. This week it doubled to over $16. While Tesla (TSLA.US) remains popular, electric vehicle manufacturers Workhorse (WKHS.US) and Nio (NIO.US) were sold down on recent strength. The EV sector remains well off its highs of early 2021.