XAO Banter Thread

Where can it go? The XAO that is.
Reading more and more about how the banks are overbought. It seems that only index funds are buying them now. They'll hold up until RBA cuts rates. We may see one rate cut but I'm not expecting more before they rise again. The other half of the market is resources and without China needing more their demand is muted. Commodity prices also subdued by strong USD. The large cap resource companies rely heavily on iron ore. Other iron ore suppliers are finally getting to market. Our advantage of being closer to China won't be enough of a financial advantage.

The ASX isn't attracting other industrial companies to help diversify it's offering. In fact many div paying companies have gone. Our ASX is turning into a relic with historic software, strained broker relationships and failure to embrace the digital age (paperwork, postal usage).

I wonder if the AI component of the newly listed ALFA ETF (Vaneck) will short the ASX? If it's smart, it will.

maybe the local currency aspect, of having domiciled ETFs of international assets, will save it.


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also worrying is that US markets are now 70 percent of global total. (Japan was 50% in the 1980s peak)

....was thinking....our dollar is low, will it save us? Foreign money will flow into the ASX when things aren't so rosy overseas (thinking of the new administration)

What? Dona and I thinking along similar lines? He beat me to it

peter2 said:

The ASX isn't attracting other industrial companies to help diversify it's offering. In fact many div paying companies have gone. Our ASX is turning into a relic with historic software, strained broker relationships and failure to embrace the digital age (paperwork, postal usage).

Click to expand...

As I see it the ASX is really just reflecting the underlying economy.

Australia in 2025 is heavily focused on mining, finance and mostly quite basic services (hospitality, tourism, retail, household services etc) as well as administration. Given the latter two are substantially run by small companies and in some cases are functions of government, that leaves mining and finance to dominate the stock market apart from a few big retailers, utilities and the odd random exception.

Same on the management side. These days the way to get yourself in charge of something is to start with a law degree or an MBA. Technical proficiency in the actual business itself, as distinct from the administration of it, has become a somewhat less common path to the top. That results in a management focus on administration and process rather than innovation and outcomes, it biases toward tried and tested "off the shelf" approaches technically.

Given that's how society and the economy is functioning in general, it seems logical the ASX would reflect that both itself and with the companies listed on it. It's going to itself use very tried and tested technology and it's going to be dominated by companies in mining, finance and a handful of big service or retail companies. It's not going to be a leader in technology and it's not going to be full of manufacturing and tech companies since that's not what the underlying economy is doing.

There are of course individual exceptions as with anything. We do have tech companies, we do have manufacturers and so on but they're not what's dominant in the real economy.

XAO up 100pts ! I did not see that coming. Banks +2.5%, Resources +0.5%

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