Australia: Why these 5 shares had the highest trading volume last week

Australian Stock Markets

According to CommSec, these 5 companies had the most commonly traded shares by CommSec clients last week:

Despite Telstra Corporation Ltd (ASX: TLS) being downgraded by top broker Macquarie, CommSec buyers of Telstra outnumbered sellers 79% to 21% of total contract notes.

The Telstra share price is down 30% over the last year and perhaps buyers are seeing it as an opportunity to buy a blue chip stock at a discounted price.

A PE ratio of 11 on a stable large cap limits the downside risk (although it could go lower) and a dividend yield of 9% provides good income (although there could be some dividend cuts).

Its 10 year average revenue growth rate of 1% isn’t likely to improve significantly any time soon in my opinion.

Pilbara Minerals Ltd (ASX: PLS) and Galaxy Resources Limited (ASX: GXY) were top performers last year and it appears that buyers are still quite bullish on lithium miners as demand rises.

A corresponding increase in supply and profit taking may dampen their share price’s short term performance but the long term fundamentals are encouraging.

The A2 Milk Company Ltd (ASX: A2M) has been nothing short of breath-taking with a phenomenal 300% share price growth over the last year alone.

No surprise then that 55% of CommSec trades on the stock last week were by sellers looking to take some profit off the table.

National Australia Bank Ltd. (ASX: NAB) was another highly traded stock and there has been recent speculation within the media that it may be looking to spin off and float its funds management, financial advice and superannuation businesses.

That is certainly one to keep following as it develops because should that go ahead, it could potentially create a top-100 listed company.

Australian Business Conditions Surge to Highest on Record

Australian Stock Markets

Australian business conditions surged to the highest on record, reinforcing signs of a strengthening labor market and pickup in investment.

 
The sentiment index jumped seven points to 21 in October and was driven by spikes in sales and profitability gauges, according to a National Australia Bank Ltd. survey of more than 400 firms conducted in the last week of the month. The business confidence index was unchanged at a revised 8

Results from the survey indicate that the business sector in Australia is very strong at present, which is having positive spill-overs into the labor market and, to some extent, investment,” the bank said in a statement. “However, fairly restrained levels of business confidence could be telling us something about how firms see the outlook.”

The Australian dollar rose on the report, buying 76.30 U.S. cents at 11:54 a.m. in Sydney from 76.18 before its release.

Australia’s central bank is forecasting that a strengthening labor market will eventually drive wage gains and faster inflation, while Deputy Governor Guy Debelle said that there had been a solid upward trajectory in business investment. Household spending remains a key uncertainty  particularly after retail sales posted the weakest three-month stretch in seven years.

While the survey’s employment conditions were unchanged, the bank said the measure still remained at levels that implied solid growth in employment, which should be sufficient to put more downward pressure on the jobless rate.

But the report came with a caveat: leading indicators suggest the possibility of some pull-back in coming months. The bank said that forward orders had eased slightly and the result was driven by a surprise jump in manufacturing.