What Worked Australia - 12 May 2017 - Disastrous week for Div Yield, Size hurt

What Worked

This week saw the worst week in our tracked history for Dividend Yield, after having spent the last month in positive territory. While the higher yielding names stayed largely in line with the market, it was low div yield names that jumped significantly, with the bottom quintile (i.e. 20%) of the market measured by Div. Yield provided +3.9% of outperformance. Australian Agricultural Company (AAC, +12.6%), Galaxy Resources (GXY, +17.1%) and Syrah Resources (SYR, +10.1%) all finished up in a big way this week, and all with forecast FY1 dividend yields of zero. The other side of that trade saw some of the higher yielding names underperform, including Genworth Mortgage Insurance (GMA, -1.3%), Harvey Norman Holdings (HVN, -8.5%) and Myer Holdings (MYR, -14.9%) all finishing well off the benchmark.

Size was also hurt this week, in large part caused by a rally in the smaller end of the market. The larger end of the market was all but flat to the benchmark (as one would expect from a cap-weighted index), while small cap names surged +2.4% higher than the ASX 200. The smallest names in the benchmark this week included iSentia (ISD, +0.3%), OFX Group (OFX, +0.3%) and Virtus Health (VRT, +0.7%), all-in-all only 8 names from the smallest 20% of the market posted losses this week. The larger end of town was a mixed bag however, and the losses seemed to be focused on the banks. Commonwealth Bank (CBA, -3.4%), Westpac (WBC, -3.9%) and ANZ (ANZ, -4.9%) all finished the week lower.

Who Moved

With most of the Asia Pac region having holidays in one form or another this week, Australia seemed to pick up a little of slack in trading volumes. 21 names from the benchmark index moved on significantly higher than normal volumes this week. On the positive side, Qantas Airways (QAN, +4.2%), ARB Corp (ARB, +3.9%) and CSR Limited (CSR, +3.7%) all finished the week higher backed by volume, while Mayne Pharma (MYX, -11.5%), Independence Group (IGO, -8.0%) and Alumina Limited (AWC, -7.3%) all finished lower.


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