This week’s stories cover Woolies breaking ties with gambling and liquor, Virgin Galactic’s potential public listing, and interest rate cuts in Australia. (1:41 min read).
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1. Woolies: clean up in aisle “gambling & liquor”
Woolworths announced it intends to offload its drinks and gaming interests in 2020.
This will allow the supermarket group to focus on its core food and retail businesses. From a reputational perspective, it makes sense a lot of sense.
Being the third largest operator of pokies gaming machines in Australia has never really aligned with its core supermarket businesses.
AtlasTrend managed funds are not invested in Woolworths shares. However, Woolworths actions show the growing importance of the social licence to operate.
2. Richard Branson’s Virgin Galactic to list
Richard Branson’s space tourism company Virgin Galactic announced plans to publicly list on the stock exchange. The company plans to merge with Social Capital Hedosophia, which already trades on the New York Stock Exchange (NYSE).
Should the plans go ahead, Virgin Galatic would become the first publicly traded, commercial human spaceflight company. However, the company is yet to send a paying commercial passenger into space after many missed deadlines.
As the commercial space race gains pace, there is an increasing prospect the private space market could become an attractive investment.
Companies like SpaceX and Blue Origin in particular (founded by billionaires Elon Musk and Jeff Bezos respectively) have achieved many important milestones with their space and rocket technologies.
As investors, we’ll be keeping an eye out on how this industry develops over the next few years.
3. Another round of Aussie interest rate cuts
The Reserve Bank cut official interest rates to a historic low of 1 percent. The news didn’t come as a surprise to markets given the rising unemployment rate and slowing economic growth.
People with mortgages should benefit from a lower variable interest rate provided their banks pass on the reduced interest rates. On the other hand, those with savers will likely be receiving less interest income from their bank deposit accounts.
AtlasTrend’s managed funds invest in companies listed on stock markets outside of Australia. Since the interest rates cuts have contributed to a depreciating Australian dollar, AtlasTrend’s managed fund investments are worth more when measured in Australian dollars.
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