ASX 200 falls 1.9%, big 4 ASX banks retreat

The S&P/ASX 200 (ASX:XJO) declined by 1.9% today. The share prices of the big 4 ASX banks like Westpac Banking Corp (ASX:WBC) went backwards.

The S&P/ASX 200 Index (ASX: XJO) fell by 1.9% today. Overnight the Dow Jones Industrial Average (DJI) fell by 6.9% on fears of a second wave of COVID-19.

This week the Federal Reserve boss Jerome Powell said: "This is going to take a whole lot of time. There are just a lot of people that are unemployed and it seems quite likely there will be a significant group, even after a lot of strong jobs growth, that will still be struggling to find jobs." 

But there was some good news for Australians today. The federal government has announced it's working on rules with the states to allow stadiums with 40,000 seats to hold crowds of up to 10,000 people. Bigger stadiums could be allowed to fill a quarter of the seats. These changes could come in July.

a woman

Major ASX banks retreat

The share prices of each of the big four ASX banks went backwards today.

The Commonwealth Bank of Australia (ASX: CBA) share price dropped 1.2%, the Westpac Banking Corp (ASX: WBC) share price fell 3.1%, the Australia and New Zealand Banking Group (ASX: ANZ) share price declined 2.8% and the National Australia Bank Ltd (ASX: NAB) share price dropped 2.2%.

However, they remain higher than where they were a month ago. 

Big falls in the ASX 200

Thankfully the ASX 200 actually recovered some lost ground – it was down over 3% this morning. However, whilst some shares like Afterpay Ltd (ASX: APT) managed to reverse the decline, others ended the day down heavily.

The Platinum Asset Management Ltd (ASX: PTM) share price went down 12%.

The oOh!Media Ltd (ASX: OML) share price dropped 9.8%.

Southern Cross Media Group Ltd (ASX: SXL) saw its share price decline 9.1%.

ASX 200 engineering business Monadelphous Group Limited (ASX: MND) suffered a share price decline of 8.9%.

The Unibail-Rodamco-Westfield (ASX: URW) share price went down 8.8%.

Zip Co Ltd (ASX: Z1P) announces May 2020 trading update

The buy now, pay later (BNPL) ASX 200 business said that it grew its monthly revenue to $15.6 million, an increase of 78% year on year. Zip's monthly transaction volume increased by 63% to $189.3 million.

Zip said its receivables figure was up 85% compared to a year ago to $1.2 billion.

Customer and merchant numbers were also up by a significant amount. Customers increased by 63% to 2.1 million. It added 65,000 new customers over the course of the month. Merchant numbers increased by 46% year on year to 23,600.

In terms of net bad debts and monthly arrears, the ASX 200 said it was doing very well. Net bad debts of 2.16% were in-line with management expectations, Zip said this significantly outperformed the market. Monthly arrears reduced from 1.57% in April to 1.47% in May. Monthly arrears are seen as a forward indicator of future losses.

The ASX 200 business said that customer repayment success rates are higher or on par with pre COVID-19 rates. Monthly repayments as a percentage of opening receivables increased to 16%, up from 15% in April.

Pleasingly, there has been no material change to the number of requests for hardship assistance, which peaked at the end of March 2020 at less than 0.08% of receivables.

Zip reminded investors of the acquisition of QuadPay. Management are looking to accelerate Zip's global expansion strategy. Zip also re-iterated to investors it has reached an agreement to raise up to $200 million from US-based Susquehanna International Group to further drive growth.

The Zip managing director and CEO Larry Diamond said that the BNPL business remains on track to hit its FY20 target of $2.2 billion in annualised transaction volume set at the beginning of the year.

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia has recommended oOh!Media Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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