Welcome to the June edition of Market Insight, which provides a view on current market conditions and key tax considerations as we approach the end of the financial year. Markets:
The Australian Share market (ASX 200) reached new highs this week – climbing above 7,300.
National Australia Bank, Crown Resorts, SkyCity, and Star Entertainment all found themselves in the ire of AUSTRAC as the regulator claims to have found serious problems in how these companies try to prevent financial crimes.
Electronics design software vendor Altium jumped almost 40% after their board rejected a takeover offer from US software group Autodesk. The news helped lift Australian tech shares during the week.
Woolworths’ takeover of food distributor PFD Food Services will go ahead despite the competitors’ concerns in the space. The competition regulator has allowed Woolworths to buy 65% of the shares in PFD, which delivers food to cafes, restaurants, hotels, clubs, and more.
Economics:
Home values soar in top 10 most liveable cities, with New Zealand officially home to the most liveable city as ranked by the Economist. Adelaide was Australia’s best, coming in third position – slightly behind Osaka in Japan.
Australian new housing-related lending lifted by 3.7% in April to a new record high, with lending to owner-occupiers rising strongly to 4.3% while lending to investors was up 2.1%. Lending to first home buyers has now fallen for the 3 consecutive months, likely due to affordability. Lending in NSW, VIC, and SA were the strongest in the month, whilst WA and TAS posted falls.
The Australian government and the Australian banks received an upgrade from credit rating agency Standard & Poor’s with their outlook now considered to be stable.
US consumer prices soared again with a 5% rise in May on the same time last year, pushing the inflation rate to a 13-year high. The May number came in well above expectations. The 3.8% rise in the core inflation rate, which excludes food and energy prices, was the sharpest increase in nearly 30 years. The US central bank remaining firm that price pressures will wane soon enough.
Tax tips: June can often be a frantic month for many, however waiting until the end of June to “get the house in order” can often cause stress and runs the risk of missing deadlines. If you have been fortunate enough to realise a substantial gain or simply want to reduce your tax position, you may wish to explore the following:
Consider making deductible super contributions
Look to prepay deductible insurance premiums or deductible loan interest in advance
If you’ve been working from home, consider claiming home office expenses
Consider selling investments which may have fallen in value to offset gains
** Please be mindful if attempting the above on your own. It is always advisable to seek professional advice from a suitably qualified professional in regards to your specific situation.
Jargon Buster - Shares:
Also known as equities. A person who buys a portion of a company’s capital becomes a shareholder in that company’s assets and as such receives a share of the company’s profits in the form of a dividend. There are different types of shares, for example ordinary, preference, cumulative preference and participating preference shares.
Keep an eye out for our next edition and remember that we are always happy to answer queries about your own personal situation. Synergy Private Wealth