The S&P/ASX 200 Index (ASX: XJO) climbed 4.6% this week with volatility starting to calm down.
Investors continue to fear the effects of the coronavirus on the domestic and global economy.
Here are some of the highlights from the week:
Capital raisings
Seeing that this could be the state of affairs for some time, a few companies have launched capital raisings to make sure they're well-placed to get through this time.
Webjet Limited (ASX: WEB) is carrying out a capital raising to raise around $346 million at a price of $1.70 per share.
Flight Centre Travel Group Ltd (ASX: FLT) is believed to be about to do a $500 million capital raising at a share price of $7.20.
Data centre business Nextdc Ltd (ASX: NXT) is raising $672 million at a share price of $7.80.
Banks to cut dividends?
The market was looking closely at Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) this week.
Banks in the UK, Europe and New Zealand have agreed not to pay dividend. New Zealand is a material part of the ASX banks' earnings. This means that even if the ASX banks weren't to suffer an earnings drop in Australia, they wouldn't have access to the profits made in New Zealand during this period.
With ASX banks offering payment holidays and seeing a lower net interest margin (NIM), bank profits and dividends are predicted to go lower this year.
More businesses closing all their stores
The government has encouraged commercial tenants to talk with their landlords to make sure that after this is over there's an economy to go back to.
Some of the businesses to announce they were shutting down this week were: Nick Scali Limited (ASX: NCK), Adairs Ltd (ASX: ADH) and Myer Holdings Ltd (ASX: MYR).
With everything that's going on, I'd want to stick with high-quality shares that will get through this, like these defensive shares.
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As of 17/3/2020
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited and Webjet Ltd. The Motley Fool Australia owns shares of National Australia Bank Limited. 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.
