How the Coronavirus has impacted Australia’s top 20 largest companies

'The financial industry is a levered bet on global GDP.’

The 'red chip' benchmark

When the ASX 20 is mentioned, reliability is likely one of the first things that come to mind. Over the years, market commentators, analysts and pundits have all led us to believe that these are the bluest of the blue chips: the stalwarts that will survive any storm, panic or mania.

The emergence of the Novel Coronavirus (COVID-19) has definitively tested that conventional wisdom. At 134,679 reported cases and close to 5,000 deaths across the globe, its threat – to both human life and the world economy – can be hardly understated.

In response, equity markets across the globe have crashed, and comparisons to 2008’s Global Financial Crisis have become a staple amongst the media. On the ASX no company has been spared: the banks have been smashed, the miners battered and even CSL, which we once noted people were joking ‘couldn’t go down’, has seen its share price come off significantly.

As Matt Levine recently said in his always enjoyable Money Stuff column:

‘Loosely speaking the financial industry is a levered bet on global GDP.’ That metric is not looking so great right now.

Ultimately, maybe this is a good reminder that investing in equities is an inherently risky enterprise, a notion easily forgotten amidst bull markets.

(Of course that is not say that there are not opportunities to be had, only that a high degree of risk tolerance is required.)

Looking broader afield, the ASX 200 has decisively entered a bear market – defined as a market falling more than 20% from recent highs. From its frothy February peaks, the blue-chip benchmark was down as much as 31% by Friday afternoon.

For reference, during the GFC the ASX 200 fell approximately 55% from peak-to-trough.

Surveying the current situation, Julia Lee, Chief Investment Officer at Burman Invest, said in a recent interview with News.com, that:

'What we have seen in the past is it is an opportunity for longer-term investors who can keep their cool.’

The problem of course, as Julia Lee highlights, is that:

‘We don’t know how long this is going to go for.’

With all that in mind, below we highlight the impact that the Coronavirus crisis has had on the share prices of Australia’s 20 largest companies – ordered from largest to smallest – over the last month.

Top 20 largest Australian companies (ASX 20)

Company

Market cap

Share price

1-month performance

CSL

$127bn

$281

-15.8%

Commonwealth Bank

$104bn

$58.94

-33.3%

BHP Group

$73.8bn

$25.08

-35.1%

Westpac

$58bn

$16.08

-36.3%

National Australia Bank

$47.5bn

$16.11

-39%

ANZ Banking Group

$47bn

$16.60

-37%

Woolworths

$42.7bn

$33.93

-21.2%

Wesfarmers

$37.4bn

$33.07

-27.8%

Macquarie

$36.6bn

$103.34

-31.1%

Telstra

$35.7bn

$3.01

-20.4%

Transurban

$32.2bn

$11.80

-27%

Rio Tinto

$28.2bn

$76.02

-22.7%

Goodman Group

$22.4bn

$12.31

-24.1%

Woodside Petroleum

$16.8bn

$17.84

-47.2%

Newcrest Mining

$16bn

$20.90

-27.9%

Brambles

$14.6bn

$9.51

-25.7%

Insurance Australia

$13.2bn

$5.75

-15.9%

Scentre Group

$12.6bn

$2.42

-36.4%

Suncorp Group

$10.9bn

$8.68

-29.9%

Amcor

$10.3bn

$10.23

-34%

How to trade Australia’s largest companies

What are your thoughts on the current situation: have Australia’s top 20 blue chips been oversold or are there further declines to come? Trade accordingly. You can go LONG or SHORT on any of Australia’s largest companies with IG’s world-class trading platform now.

For example, to buy (long) or sell (short) CSL, currently Australia’s largest company, using CFDs, follow these easy steps:

  • Create an IG Trading Account or log in to your existing account
  • Enter ‘CSL’ in the search bar and select it
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

Not ready to commit real capital but still want to get involved in the markets? You can set up an IG Demo Account and practice trading any of the ASX 20 stocks we have discussed today immediately. Click here now to get started today.

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The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

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