The ASX 200 (ASXINDEX: XJO) was eventful this week, there were plenty of reports released. Here are four stories you may have missed that affected businesses in the ASX 200 index:
Banks sold off
Big four ASX banks faced a selloff at the end of the week as investors worried about what the coronavirus knock-on effects would mean for the economic fallout and bad debts for the banks.
On Friday, the Commonwealth Bank of Australia (ASX: CBA) share price dropped 3.7%. The Westpac Banking Corp (ASX: WBC) share price fell 4%. The Australia and New Zealand Banking Group (ASX: ANZ) share price declined by 4.7%. The worst drop belonged to the National Australia Bank Ltd (ASX: NAB) share price which dropped 5.5%.
TPG Telecom Ltd (ASX: TPM) result and ACCC admits defeat
Telco TPG released its half-year result this week. The NBN continues to be a negative for TPG, but TPG increased its FY20 guidance business as usual (BAU) earnings before interest, tax, depreciation and amortisation (EBITDA) to a range of $775 million to $785 million, up from $735 million to $750 million.
Statutory net profit was up 206% because the prior corresponding period included the impairment impact of ending its Australian mobile network build. Excluding the impairment, net profit for the first half was down 30% because of $53.7 million of Australian spectrum amortisation and a $19.6 million increase in net financing costs.
It was announced on the same day that the Australian Competition and Consumer Commission (ACCC) will not appeal the merger decision between TPG and Vodafone Australia.
A country’s GDP is closely watched because two quarters of GDP decline means a country is in recession.
This week the Australian Bureau of Statistics (ABS) announced Australia’s GDP numbers for the December 2019 quarter.
Australia’s economy registered 0.5% growth of GDP in the three months to December 2019 and 2.2% growth through the year. The ABS said domestic demand remained subdued with 0.1% in the December quarter.
A rise in household discretionary spending and continued increases in the provision of government services was dampened by falls in dwelling and private business investment.
RBA rate cut
Central bankers promised that they would do something to help the market in its panic. The Reserve Bank of Australia (RBA) decided to cut Australia’s interest rate to help businesses and individuals.
The lower net interest margin (NIM) is expected to hurt major bank profits as well as smaller banks like Bank of Queensland Limited (ASX: BOQ), Suncorp Group Ltd (ASX: SUN) and Bendigo and Adelaide Bank Ltd (ASX: BEN).
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