27 August 2018
We can’t help but keep an almost hourly watch on the developments in Canberra over the course of last week. Australia is headed for its fifth prime minister in five years. If Bill Shorten wins the next election, it will be six in as many years.
Earlier in the week, the political instability pushed the Australian share market to its lowest level in three weeks, weighed down by the finance and utility sectors. The S&P/ASX 200 index closed 21.6 points, or 0.3% lower at 6244.4 on Thursday, falling for a third straight session. The most vulnerable sectors on the market were the finance and utilities sectors, who face an uncertain regulatory future under a new government. ANZ recorded the largest dip of the major banks, falling 2.4% to $28.41.
Towards the end of the week, as the uncertain cloud cleared and current Treasurer Scott Morrison emerged victorious as Australia’s new Prime Minister, the business community reacted positively. The stock market bounced almost immediately. Mr Morrison is seen as an experienced financial manager and he has pleased investors around the world with extraordinary outperformance via the budget as Treasurer. Now a lot of expectations are on the new Prime Minister to continue to deliver economic growth in Australia. We keenly await his initiatives in the coming months.
Australia Post has reported a 41% jump in after tax profit from $95 million to $134 million, as growth in parcel delivery overtook the decline in letters to stabilise profits.
The volume of parcels delivered up 11% (domestically up 10% and internationally up 19%) and recorded revenue of $3.5 billion – now 50% of the all revenue – while the volume of letters decreased by 10% and its revenue was $2.4 billion.
Given Australia Post’s dominant position in the market, its profit results are indicative of the wider shift in the logistics industry – consumption is on the rise and a lot of that is through eCommerce, this in turn drives everything from trucking to warehousing, and from packaging to distribution management. This represents opportunities for small to medium businesses to share the growth in the coming years.
There’s always exciting news in Victoria’s business community. For a confidential discussion about your next business transition telephone First Choice Business Brokers on 9899-1888.
By Lee Xie (Senior Project Manager)
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