In mid-February, if you ignored the encroaching COVID-19 pandemic, it was a good time to be an Australian investor.
Both the ASX200 and the All Ordinaries – the two most well-known stock indices in Australia – were sitting comfortably over 7,000 points, the highest mark since their inception in the 1980s.
Fast forward a month and both had lost more than a third of their value, falls not seen since the global financial crisis.
But, in promising news, the bellwether indices show that Australian stocks have recovered strongly as the year has worn on, no doubt thanks to Australia’s management of COVID-19 compared with other countries.
The All Ords, which measures the share prices of the ASX’s 500 largest companies, is up 0.6 per cent compared with January 1, 2020, while the ASX 200 is up 0.55 per cent.
Since lockdowns were introduced on March 23, the All Ords and ASX 200 have rebounded 52 per cent and 47 per cent respectively.
And it will come as no surprise that buy-now-pay-later stocks have been among the most successful in 2020, as consumers saved money while unable to go out and spend it.
Fellow buy-now-pay-later stock Sezzle Inc (ASX:SZL) has risen 289 per cent since the start of the year, although at one point in late August it was trading at well over $11.
This trend is backed up by Saxo Markets, which revealed that Afterpay was the most traded stock on its platform in Australia.
It was closely followed by healthcare and biotech giant CSL Ltd (ASX:CSL), Elon Musk’s Tesla Inc (NASDAQ:TSLA), and, remarkably for a company that didn’t do a great deal of its bread-and-butter business this year, Flight Centre Travel Group Ltd (ASX:FLT), but that might have had quite a bit to do with investors selling off.
Year of tech stocks
Saxo’s head of equity strategy Peter Garnry said it was the year of technology stocks.
“This year was all about the online vs offline world as technology companies were catapulted into the future by the COVID-19 pandemic while many physical industries such as aviation, travel, leisure, hospitality and automobiles came under significant pressure due to the severe restrictions and lockdowns,” he said.
“COVID-19 has amplified the participation rate of retail investors in equity markets, a trend that was already underway before COVID-19 and mainly driven by younger people.
“The growing influence of retail traders has altered equity markets and created a new environment that has made it more difficult for traditional institutional investors to navigate.”
Garnry also commented on Tesla’s rise, which points to a positive future for electric vehicles and the metals required to make them, such as copper, lithium, cobalt and nickel.
ASM a star performer
Another company aiming to take advantage of the tech-metal upsurge and strong outlook has been Australian Strategic Materials Ltd (ASX:ASM), which was spun out of well-performing gold producer Alkane Resources Limited (ASX:ALK) at the end of July.
ASM is value-adding to rare earths found at its Dubbo Project in NSW through technology developed by its Korean subsidiary to produce high-quality metals used for emerging EV, green energy and new-age magnet industries.
From 84 cents on August 4, shortly after listing on July 30, shares have risen more than 8-fold to a new record of $6.84 today while the market cap also continues to shine and today sits at approximately $802.4 million.
Healthcare was the predominant theme of 2020, of course, and Moderna Therapeutics (NASDAQ:MRNA) was one of the most-traded companies across the globe, according to Saxo.
At home, Mesoblast (ASX:MSB) was a big gainer since March 23, gaining as much as 458 per cent from lows of $1.02, though its share price has fluctuated.
- Daniel Paproth