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The Australian share market has hit new several record highs since the year began. That’s partly because Australia’s largest companies have been reporting better-than-expected profits, despite their customers struggling with cost-of-living pressures and higher interest rates. David Chau takes a look at the winners and losers this earnings season and the risks around the corner.
Author: Hugh Dive
January Monthly Newslettter
- January saw continued strength spurred by lower inflation levels and views that 2024 will see falling interest rates domestically and internationally. In December, Australian inflation declined to 3.4%, which was below market expectations and indicated that the RBA’s tightening policies to tame inflation are finally working and that the plateau at the top of the interest rate cycle has been reached.
- The Atlas High Income Property Fund gained by 0.4% in January, continuing the positive moves in November and December. A falling interest rate provides a tailwind for property and infrastructure assets from both falling debt servicing costs and declining pressure on asset valuations.
- Atlas is looking forward to the February profit season, which we expect will show both the resilience of company earnings from the companies held in the Fund and that management will guide to higher distribution through 2024.
Go to Monthly Newsletters for a more detailed discussion of the listed property market and the fund’s strategy going into 2024.
What really goes on during ASX reporting season?
The Australian: Earnings season to test surge in stocks with profit reports to be ‘patchy
December Monthly Newsletter
- December saw investors holding out for a “Santa Claus” rally rewarded with continued strength from November across the world indices in December. The key factor driving solid returns in share markets was the view that rate cuts are likely in 2024. The year ended with a recession in either the US or Australia that many predicted twelve months ago, with economies more resilient than expected and better placed to weather higher interest rates.
- The Atlas High Income Property Fund gained by 10% in December, following a continued recovery in November as investors started believing that interest rates peaked in Australia and the US. December saw most of the Fund’s holdings
declare distributions, all in line with expectations and higher than those paid in the second half of 2022. This contributed to the rally in share prices, offsetting the doom and gloom from August to September. - The Fund declared a quarterly dividend of $0.03 per unit for the December Quarter, a small increase from the September distribution. The distribution will be paid to investors in early January.
Go to Monthly Newsletters for a more detailed discussion of the listed property market and the fund’s strategy going into 2024.