In this week’s edition of The Weekly we cover last week’s Federal Budget and Budget reply. On the stock watch front, we spotlight a takeover bid in the small-to-mid cap space, a beneficiary of market volatility for a WAM Global (ASX: WGB) holding, and the impact of a AUD$1 billion loan for a company in the S&P/ASX 200.
We premiere our latest episode of ‘Talking Stocks’ with large-cap Senior Investment Analyst Anna Milne and Investment Analyst Hailey Kim who discuss stocks they are seeing value in, including Mirvac Group (ASX: MGR), Amcor (ASX: AMC), as well as Woolworths (ASX: WOW) and Coles (ASX: COL).
Market Updates
The S&P/ASX 200 Accumulation Index remained resilient ending the week up 0.7% while the S&P/ASX Small Ordinaries Accumulation Index finished down 0.3%. Financials, energy and consumer discretionary were the best performing sectors of the ASX 200 while information technology, real estate investment trusts (REITs) and healthcare were the worst. Gold stocks were again on the rise as the gold price notched another record high up 2.0% in the past week and up 16.9% since the beginning of 2025.
Global markets were softer with the S&P 500 Index (large-caps) down 1.5%, Russell 2000 Index (small-caps) down 1.6%, and the MSCI World Index down 1.6%. The main driver was weakness in the information technology and communication services sectors. Concerns over market concentration which we discussed in last week’s edition of The Weekly resurfaced with the Magnificent 7 down an average of 3.2% in the week and 17.2% so far in 2025. The AUD ended relatively flat against the USD, at $0.63.
The week was full of political news flow, including Prime Minister Albanese’s 2025-26 Federal Budget on Tuesday, Opposition Leader Peter Dutton’s Budget reply on Thursday and Albanese calling a Federal Election on 3 May, with Newspoll now indicating Labor is leading 51-49%. Albanese’s Budget included $17 billion in tax cuts that would save the average Australian $268 a year plus power bill relief, cheaper medicines and a boost for first home buyers. The Budget will head into deficit (where government spending is greater than its income) after back-to-back surpluses. The deficit for 2024-25 is expected to be $27.6 billion growing to $42.1 billion in 2025-26. We dive into the impact of the Budget on markets and interest rates below. Dutton’s Budget reply included cutting the fuel excise, introducing a national gas reservation scheme and cutting 41,000 public service jobs.
Pleasingly, Australian inflation cooled to 2.4% in the 12 months to February, with trimmed mean inflation (the Reserve Bank of Australia’s (RBA) preferred measure of underlying inflation) falling to 2.7%, down from 2.8% in January and putting underlying inflation at its equal-lowest level in 3 years. This Tuesday, all eyes will be on the RBA where it is widely expected to hold interest rates steady at 4.1%, and U.S. President Donald Trump on Wednesday night/Thursday our time, where he is set to announce reciprocal tariffs.
In Focus: Impacts of the Federal Budget
The FY2026 Federal Budget is mildly stimulatory, with electricity subsidies and healthcare initiatives designed to deliver some cost-of-living relief for households. The underlying deficit is forecast to expand to 1.5% of Gross Domestic Product (GDP) in FY2026, up from 1% in FY2025. However, the government expects commodity prices to fall, counteracting the fiscal impulse on broader financial conditions.
If commodity prices remain stronger than the government anticipates, due to stronger-than-expected world growth, the budget would indeed be stimulatory, with potential implications for the RBA in terms of maintaining rates at a higher level for longer. But if world growth slows, the RBA may still have some scope to cut rates in line with money market pricing, despite the moderate stimulus included in the Budget.
The state of world growth remains key for the near-term interest rate outlook. However, the terminal rate that the RBA might settle at remains debatable, as fiscal policy in later years appears more stimulatory. The government has planned meaningful tax cuts in future years (i.e. FY2027 and beyond) if re-elected, which would contribute to the budget remaining in deficit for longer and net debt levels drifting higher. Even if the government is not re-elected, there is some risk that the opposition may try to match the tax cuts currently proposed.
Stock watch
Scentre Group (ASX: SCG)
Analysts are anticipating a 2% uptick in Scentre Group earnings following a $1 billion loan refinance at materially better margins, driving the stock up 3.6% last week on the news. Instead of raising equity through COVID, the company issued subordinated notes and are working through resetting this expensive debt. Further refinances will be an important driver of the earnings growth story over the coming years with the latest refinance exceeding expectations. The WAM Leaders investment portfolio owns Scentre Group and is overweight the REITs sector due to the defensive characteristics of the sector.
Held in: WAM Leaders (ASX: WLE)
The Reject Shop (ASX: TRS)
During the week The Reject Shop received a bid from Toronto-listed discount retailer, Dollarama (TSE: DOL), for $6.68 per share, representing a 112% premium to the closing price on 26 March. The Reject Shop Board unanimously recommends shareholders vote in favour of the scheme and the largest shareholder which owns 20.8% of the company said it will also approve the bid. The offer is a great result for shareholders and we are fully supportive of the Board.
Held in: WAM Capital (ASX: WAM), WAM Microcap (ASX: WMI) and WAM Research (ASX: WAX)
Tradeweb (NASDAQ: TW)
Looking for winners on market volatility? Tradeweb, a leading electronic marketplace for interest rate and credit trading, has seen strong trading across its product lines in 2025, with February average daily volume increasing 14% in rates and 28% in credit when compared to the same month in 2024. Tradeweb benefits from news flow around tariffs and market volatility as its customers look to hedge risk. This is reflected in Tradeweb’s share price which is up 8.4% in March compared to the S&P 500 which is down 6.3%. Tradeweb also continues to enjoy a multi-year tailwind from the continued electronification of interest rate and credit markets.
Held in: WAM Global (ASX: WGB)
Eastwood Private Hospital (Barwon Investment Partners)
Barwon Investment Partners is on track to achieve practical completion of the Eastwood Private Hospital next month. Located in South Australia, the hospital has been fully pre-leased on a 15-year triple net lease and when complete will feature 8,200sqm of net lettable area across six floors. Eastwood Private Hospital is a real estate holding in the WAM Alternative Assets investment portfolio.
Held in: WAM Alternative Assets (ASX: WMA)
Index returns performance table
The week ahead
Tuesday 1 April 2025
- The outcome of the RBA’s meeting will be released at 2:30pm (Sydney time), with the Governor’s media conference to follow at 3:30pm (Sydney time). For more information click here.
- The announcement of The Institute for Supply Management (ISM) Manufacturing Report in the U.S., which provides one of the earliest indications of economic activity each month.
Wednesday 2 April 2025
- The announcement of Donald Trump’s reciprocal tariff rollout.
Friday 4 April 2025
- The release of the monthly U.S. Non Farm Payrolls report, which measures the number of jobs added or lost in the U.S. economy.
WAM Income Maximiser: Apply now for your Priority Application
As a member of the Wilson Asset Management family, you have a priority invitation to invest in WAM Income Maximiser Limited. The minimum investment for the offer is $1,500.
The offer is expected to close in two weeks on Friday 11 April 2025 at 5:00pm (Sydney time). The offer has exceeded the minimum subscription on opening, which has been met with strong demand from investors.
To apply for the priority allocation, visit the Priority Allocation Application Portal for a copy of the Prospectus and its accompanying application form for completion.
On Friday, 21 March 2025 we hosted the WAM Income Maximiser Q&A Webinar. If you were not able to attend you can access the recording, transcript and slides here.
Talking Stocks: Large-caps
In our latest episode of ‘Talking Stocks’ WAM Leaders Senior Investment Analyst Anna Milne and Investment Analyst Hailey Kim, cover a number of stocks they are seeing value in, despite current market volatility. Watch the full episode here.
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