Last week saw more major volatility on the share market with investors simultaneously spooked by the increasing spread of coronavirus and buoyed by government stimulus packages.
The S&P/ASX 200 Index (ASX: XJO) fell over 6% on Monday but gained more than 13% over the following three days, before falling again by 5.3% on Friday. Overall, the ASX 200 ended the week roughly on par with where it started.
The US Senate finally approved its massive $2 trillion stimulus package after days of debate, which temporarily lifted US shares, but what is clear is that uncertainty is the rule of the day.
Here we take a look at the five ASX 200 shares that recorded the biggest gains last week.
Afterpay finished the week up 53.5% at $19.10. The Afterpay share price has been on a rollercoaster of late, hitting a low of $8.90 last Monday from a high of $41.14 just over a month before.
Shares in the buy now, pay later provider took a hit as recession fears saw investors speculate that lower spending would see fewer transactions processed through Afterpay’s platform.
In a letter to shareholders released on 19 March, the company said it had not seen any material impact on its business activity or transaction losses to date.
Afterpay noted that there is no material concentration in the portfolio from a merchant or customer perspective. With a business model based on high-frequency purchasing and repayment rates, average transaction values are low (around $150), as are average outstanding balances (around $211).
Afterpay’s service “promotes budgeting by responsible customers,” CEO Anthony Eisen said, “we believe the appeal of Afterpay as a disciplined budgeting tool will not be diminished and may be enhanced with changing market conditions.”
Since then, three directors have taken advantage of the share price dip to buy an aggregate of 34,090 shares in Afterpay.
Corporate Travel Management Ltd (ASX: CTD)
Corporate Travel Management shares recorded a gain of 45.6% last week to finish the week at $8.17. Shares have now recovered substantially from the low of $4.70 hit on 19 March but are still well down from January when they were trading at over $22 dollars.
The travel management company was an early victim of the travel restrictions associated with the coronavirus pandemic. The government ban on international travel and major reductions in domestic capacity has had a significant impact on the business.
Corporate Travel has reassured the market that it has no need to raise equity, saying it is in a strong position to withstand sustained and significant reductions in activity.
Nonetheless, the company has implemented a round of cost reductions which aim to save at least $10 million per month from March. These include redundancies as well as reductions in directors fees. Corporate Travel has also suspended its interim dividend of 18 cents per share until 2 October 2020.
Gold Road Resources Ltd (ASX: GOR)
The Gold Road share price finished the week up 32.9% to $1.395 as investors fled to safe-haven assets. Gold Road Resources was also amongst the biggest gainers the previous week.
The Gold Road share price previously fell precipitously from its February high of $1.79 to a low of 80 cents on 16 March. Directors took advantage of the dip to buy in, with two directors acquiring 50,000 shares in the company last week.
Australia’s newest gold miner expects to ramp up to full production in early 2020. All in sustaining costs of production are expected to be at the lower end of the industry at around $1,100 to $1,200 per ounce.
Gold Road Resource’s Gruyere gold mine has 3.72 million ounces of ore reserve and is expected to produce 300,000 ounces in average annual gold production over an 11-year mine life. The Gruyere mine is expected to produce 250,000 to 285,000 ounces in 2020, proceeds of which will be used to pay down the miner’s debt.
Qantas Airways Limited (ASX: QAN)
The Qantas share price was up 31.8% last week to $3.11. Qantas took a direct hit from coronavirus travel bans, which previously caused its shares to be dramatically sold down.
Qantas has cut all international flights from the end of this month and stood down two-thirds of its workforce. Domestic flights have been cut by 60%. More than 150 aircraft have been temporarily grounded.
Payment of the interim dividend of 13.5 cents per share has been deferred until 1 September. Qantas also cancelled its off-market share buyback in order to preserve cash.
Last week, Qantas completed a new round of debt funding to strengthen its position as it manages the coronavirus outbreak. The airline raised $1.05 billion secured against its unencumbered aircraft. The loan has a 10-year term and an interest rate of 2.75%.
Clinuvel Pharmaceuticals Limited (ASX: CUV)
Clinuvel Pharmaceuticals shares gained 28.9% last week to finish the week at $18.89. Last week, Clinuvel announced it plans to launch its drug Scenesse in the US in April, boosting the share price.
Scenesse was approved by the Food and Drug Administration (FDA) in October 2019 for the treatment of rare metabolic disorder erythropoietic protoporphyria (EPP). EPP causes a painful burning sensation of the skin after sun exposure. Scenesse works to increase pain-free light exposure. The first US EPP patient will be treated with Scenesse on 15 April.
“Contrary to our predictions that the drug would be made available during the 4th quarter of this year, our teams have managed to complete the entire process working closely with the Food and Drug Administration,” Clinuvel’s CEO Dr Philippe Wolgen said.
With the outbreak of coronavirus, Clinuvel is monitoring the clinical attendance of EPP patients in the European Union. The outlook, however, remains positive, with meetings scheduled with the FDA to discuss the development of a program using Scenesse to treat Vitiligo.
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Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
