The ASX All Ordinaries index is up 6% in 2017 with some sectors performing better than others. Here are the top performing sectors for the year:
- Healthcare. The S&P/ASX 200 Health Care Index (XHJ) is up 26% over the last year. This performance has been driven by top companies such as Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) (up 60%), Cochlear Limited (ASX: COH) (up 52%), CSL Limited (ASX: CSL) (up 44%) and Estia Health Ltd (ASX: EHE) (up 50%). Despite the strong performance in 2017, many leading brokers including Citi and Macquarie are bearish on the valuations of these stocks. The underlying businesses are great but their stock prices appear to have priced in a lot of the potential upside from future performance.
- Information Technology. The S&P/ASX 200 Information Technology Index (XIJ) is also up 26% over the last year. Top performing companies in this sector included REA Group Limited (ASX: REA) (up 45%), Computershare Limited (ASX: CPU) (up 32%) and WiseTech Global Ltd (ASX: WTC) up a phenomenal 122%. WiseTech Global recently reached an all time high share price of $13.05 after it announced the acquisition of leading warehouse management solutions provider Microlistics for over $40 million.
The worst performing sector for the year was the Telecommunication Services sector which was down 23%. This poor performance was led by Telstra Corporation Ltd (ASX: TLS) and Vocus Group Ltd (ASX: VOC) which were both down 25%. The sector has been undergoing some structural changes with uncertainty over the NBN and its pricing.
Shareholders might be cheered up however with news that the NBN might be cutting the fees it charges to telcos for onboarding customers to the national broadband network in an attempt to encourage households to upgrade to the faster internet speed packages (namely the 50Mbps and 100Mbps services). The wholesale cost for the 50Mbps service will fall by around 27%, while the faster service will fall by circa 10%.
