The Federal Government had next year’s federal election firmly in its sights with this budget, and retirees were among the beneficiaries of its fiscal largesse.
In the 2019 federal election, Labor’s proposal to abolish cash refunds for excess franking credits went down like a lead balloon. So, will the $3 million cap proposal see Labor revisit history?
ASX ends flat despite flying travel stocks
ASX falls flat, travel stocks on fire, more disruption in energy sector
The ASX200 (ASX:XJO) once again failed to capitalise on a strong US lead, finishing the day flat.
Once again, dispersion continues to increase with share price movements between companies and sectors elevated.
Today it was the travel sector benefitting, with the industrials sector finishing 1.0% higher on the back of the government’s latest stimulus announcement.
Up to $1.2 billion will be directed towards subsidising flights between some of Australia’s major tourist destinations, ranging from Uluru to Cairns. The news sent Flight Centre (ASX:FLT) 9.3% higher with Qantas (ASX:QAN) only adding 2.3%.
The news has been met with some concern given the limited number of routes and a small group of potential beneficiaries; local operators are clearly awaiting more specific tourism support.
This effectively equates to a boost in income for airlines and the hope of a trickle-down impact for destination cities.
The outlook for Australian energy is becoming more complicated with news that Energy Australia will shut down the Yallourn power station in Victoria earlier than expected, thus far Origin Energy (ASX:ORG) has been unable to benefit, falling 0.2%.
Universities cashing up, AMP deal ‘too cheap’, looking over the ditch
Outside the technology sector, which fell another 1.6% as profit-challenged BNPL players followed the Nasdaq down, IDP Education (ASX:IEL) was the worst performer.
The company which offers university placements for students from around the world fell 5.7% after its ownership group announced their intention to sell down their position.
40% of the company is owned by a group of 36 universities, with 25% of the company set to be ‘in specie’ transferred to owner and the remaining 15% to be sold.
There is little doubt the university sector is struggling with borders closed so this is clearly an opportunity to extract some valuable funds for operations.
The AMP (ASX:AMP) saga continues, with brokers now suggesting the joint venture deal to sell a portion of AMP Capital’s Private Markets business may be ‘too cheap’; as the saying goes ‘you’re damned if you do and damned if you don’t’.
For the wine connoisseurs, Woolworths (ASX:WOW) Endeavour Drinks unit is apparently considering the purchase of the renowned Oakridge Wines in the Yarra Valley ahead of their impending demerger.
More records fall, Oracle’s cloud pivot slows, tech returns
More records fell in the US overnight, which should provide a positive start for the ASX.
The Dow Jones added another 0.6% after the stimulus package was finally approved, supporting states, industries, and the masses through cash payments.
The tech sector is leading the way once again, adding 2.5% with chipmakers including NVIDIA (NASDAQ:NVDA) leading the way, jumping 4.5% as demand for vehicles, gaming, and smartphones are expected to be boosted by the economic recovery.
Both Twitter (NYSE:TWTR) and Facebook (NYSE:FB) added 4% on the rotation, but cloud software provider Oracle (NYSE:ORCL) was down around 9% after delivering weaker than expected earnings.
The company is attempting to pivot its business to fully embrace the cloud, selling software applications to users, but was only able to deliver 3% revenue growth in the December quarter.
Alibaba competitor (NYSE:BABA) proved its resilience reporting a 31% increase in quarterly revenue and now expects as much as 50% of all sales in China to be online.
This comes at the same time that commentators are suggesting Alibaba CEO Jack Ma may have the largest fine issued by the Chinese Government in an effort to bring him in line with the Party.
