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ASX 200 June Review, Market Movers and Sector Performance

ASX 200 June Review, Market Movers and Sector Performance
The S&P/ASX 200 fell 2.7% during the month, while the broader All Ordinaries lost 2.5%.
Jul 07, 2016 By Simon Herrmann Tags: ASX, Analysis, Market Movers

The Australian share market fell in June following three consecutive months of gains. The UK referendum, often in the media referred to as ‘Brexit’, was making headlines and impacted investor sentiment during the month. The UK decided to leave, which sent equities around the world tumbling as markets were taken by surprise. The sharp selloff was followed by an aggressive rebound. Volatility returned in June after a number of 'calm' months.

Please note: All closing prices are as of 30/06/2016. No guarantee is made for the accuracy of this data. Dividend payments are not included in the total returns.

 

ASX June Performance

 

Index

June

YTD

ASX200

-2.7%

-1.2%

All Ordinaries

-2.5%

-0.7%

Small Ordinaries

-1.6%

+5.2%

 

Three major Australian indices declined in June. The S&P/ASX 200 fell 2.7% during the month, while the broader All Ordinaries lost 2.5%. The S&P/ASX Small Ordinaries Index, which is comprised of companies included in the S&P/ASX 300 index, but not in the S&P/ASX 100 index, shed 1.6%, but is still up 5.2% for the year. The ASX 200 and the All Ordinaries are down year-to-date.

Small-mid cap stocks have outperformed so far as investors reduce exposure from large cap stocks, mainly in the financial, technology and consumer staples space.

Of the major sectors, Financials was the weakest link during the first half of the year shedding more than 8%. Materials has advanced 14.2%, while Utilities and Health Care stocks have risen 9.2% and 7.6% respectively.

 

Best ASX 200 Performers June

The table below contains the ten best performing stocks on the ASX 200 during the month of June as well as their performance year-to-date. This table does not include any dividend payments and solely focuses on capital growth.

 

Ticker

Company

April

YTD

Industry

SAR

Saracen Mineral

+35.7%

+165.2%

Materials

WHC

Whitehaven Coal

+31.1%

+76.3%

Energy

MYX

Mayne Pharma

+30.8%

+38.0%

Health Care

A2M

A2 Milk

+26.9%

+4.2%

Consumer Staples

NCM

Newcrest Mining

+26.7%

+98.3%

Materials

ALQ

ALS Ltd

+23.0%

+37.7%

Industrials

RRL

Regis Resources

+22.7%

+66.0%

Materials

NST

Northern Star

+21.9%

+105.3%

Materials

FMG

Fortescue Metals

+21.7%

+112.5%

Materials

IGO

Independence

+21.0%

+43.5%

Materials

 

Resource stocks continue to outperform, with gold producers particularly in favour. Saracen Minerals (SAR), Newcrest Mining (NCM), Regis Resources (RRL) and Northern Star Resources (NST) are benefiting from a favourable environment as spot gold prices have recovered from a cyclical low.

During the month of June six of the ten best performing stocks were part of the Materials sector. The remaining stocks belong to Energy, Health Care, Consumer Staples and Industrials.

Mayne Pharma (MYX) soared as investors reacted positively to a US$652 million deal which will enable Mayne Pharma to push into the US market. The placement to fund the acquisition was heavily oversubscribed. Earlier this week a deal with Israel's Teva Pharmaceuticals was announced, which will contribute to the company's top line.

The A2 Milk Company (A2M) revised its full year forecast upward, which helped the share price recover after a sharp decline in May. The company forecasts better than expected revenue and earnings and reported cash on hand in excess of $50 million.

 

Top 3 Best ASX 200 Performers Year-to-Date

 

Ticker

Company

YTD

Industry

SAR

Saracen Mineral Hldg

+165.2%

Materials

SBM

St. Barbara

+140%

Materials

MIN

Mineral Resources

+130.3%

Industrials

 

In last month’s market review, Saracen Minerals (SAR) took the third spot, but moved now up into first place. The company’s share price propelled higher last month and SAR is now the best performing ASX 200 stock in 2016. While the company states that it is on track to double production whilst maintaining a strong balance sheet, investors have revised the Saracen’s valuation upwards.

Santa Barbara (SBM) gained 140% during the first half of the calendar year, making it one of the best performers as well. Focused on gold mining, Santa Barbara operates in a favourable environment whilst demand for its share price is rising.  

Mineral Resources (ASX:MIN) has returned 130% year-to-date as the stock continues to outperform the broader market following a terrible 2015 which has seen MIN’s share price plummeting.

 

Worst ASX 200 Performers in June

The table below contains the ten worst performing stocks on the ASX 200 in June as well as their YTD performance. This table does not account for dividend payments.

 

Ticker

Company

March

YTD

Industry

MSB

Mesoblast

-42.6%

-33.0%

Health Care

HGG

Henderson Group

-28.2%

-39.3%

Financials

CYB

CYBG Plc

-23.6%

-0.5%

Financials

EHE

Estia Health

-19.0%

-33.9%

Health Care

FXL

Flexigroup Ltd

-18.4%

-38.1%

Financials

BTT

BT Investment Mngmt

-17.3%

-39.4%

Financials

SRX

Sirtex Medical

-16.2%

-33.3%

Health Care

CVO

Cover-More

-16.1%

-41.8%

Financials

QBE

QBE Insurance

-13.0%

-13.9%

Financials

CPU

Computershare Ltd

-11.7%

-17.1%

Information Technology

 

Financial and Health Care stocks make up 90% of the worst performers as companies with UK exposure were heavily sold off after ‘Brexit’.

Shares in biotech group Mesoblast  (MSB) dived over 40% during the month after announcing that partner Teva Pharmaceutical pulled out of the cell therapy for heart failure trial program. While Mesoblast has now 'regained full control' the company will now have to seek a large company partner to sell the treatment.

Henderson Group (HGG), CYBG Plc (CYB), BT Investment Management (BTT) or QBE Insurance (QBE) declined significantly due to their UK exposure as investor fear that the damaged relationship will hurt the UK economy.  

 

Worst ASX 200 Performers Year-to-Date

 

Ticker

Company

YTD

Industry

CVO

Cover-More Group

-41.8%

Financials

NEC

Nine Entertainment

-41.3%

Consumer Discretionary

BTT

BT Investment M

-39.4%

Financials

 

Cover-More Group (CVO) has lost over 40% of its value during the first half of the year. Cover-More Group focuses on providing travel insurance and medical assistance services. The substantial drop in CVO’s share price came after the company announced that its EBITDA for the 1H16 period was lower than the pcp, due to increasing one-off costs and other business expansion costs linked to its international investments. Also claim costs were higher than expected, one of the primary risks of investing in insurance companies.

Nine Entertainment lost 41.3% during the first six months of the year. Trading conditions remain subdued, revenues continue to decline and competition is high. The digital and online segment could provide the company with growth opportunities, however Nine is competing with international heavyweights scuh as Netflix.

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Simon Herrmann Author: Simon Herrmann Jul 07, 2016

Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.

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