TRADING INSIDER: How The Everyday Decisions Of Australians Affect The Stock Market

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Photo: Getty / Oli Scarff

Have you ever wondered who owns the business you just bought your coffee from? Who owns the transport company that just dropped off your new online purchase? Or who really owns the boutique beer you thought was from an independent brewery?

Most people don’t go about their daily lives thinking about how each decision they make in the course of their day will impact on Australia’s listed companies, or corporations in general. Your one decision to buy at Just Jeans instead of Myer, or book your holiday through Flight centre or Webjet may not mean that much on its own. But when aggregated, the decisions of millions of Australians each day to shop, transact or in some cases ignore certain products or brands is the key to the fortunes of the ASX and the stocks traded on it.

It’s a fascinating journey to look through your day and that of your friends and family and think about how much Australian, or at least Australian-listed stock products, you choose.

Sure, the Australian stock market might be dominated by the banks, mining companies and Telstra in capitalisation terms but that doesn’t mean that there isn’t a vibrant ecosystem of Australian listed companies underpinning the economy which Australians going about their daily lives are actively supporting.

Indeed any quick look at the ASX 300 will show you just how much of your daily life and the lives of all Australians is spent interacting with, and contributing to, the health of Australia’s listed companies.

Take the cup of coffee you sometimes buy from Michel’s Patisserie when you go to the shopping centre or the bread from Brumby’s bakery or even maybe the sneaky donut every now and again from Donut King. They are all franchise systems operated by ASX listed Retail Food Group (RFG).

And while you are down at the Westfield (WDC), or visit a Stockland (SGP) Mall, are you going to be buying your new jeans or jacket at the Premier Investments (PMV) owned Just Jeans or is it something more formal you want from David Jones (DJS)?

Australian shoppers and household budget managers actively support the ASX. Sure we buy online these days, but the online retail sales data shows total online sales make up slightly over one-twentieth of total bricks and mortar sales. So the overwhelming value of retail spending goes to Australian companies. Indeed the Woolworths (WOW) and Wesfarmers/Coles (WES) groups have been estimated to attract something in the vicinity of 40% of every retail dollar being sent in the economy.

But it’s not just retail. Financial Services are studded with the big name brands on the ASX. 90% of all new mortgages are being written by the 4 major banks of ANZ, Commonwealth, NAB and Westpac but around 40% of all loans are written by mortgage brokers such as ASX listed Mortgage Choice (MOC). Insurance too is an area where you just might be surprised exactly who you are dealing with. Insurance Australia group (IAG) owns well known brands NRMA Insurance, CGU, Swann insurance and SGIO and SGIC. Suncorp (SUN), besides being a bank, also sells insurance under brand names which might surprise you such as AAMI, GIO, Suncorp, Vero, Apia and Shannons.

Who knew?

It the same in many industries – Fosters group owns the Carlton and VB brands but also owns Matilda Bay, Bluetongue, Great Northern and also the rights to international brewers Grolsch, Miller, Pilsener Urquell and Peroni. If you like Tooheys, XXXX, James Boag, Heineken or Becks, well that’s Lion and they’re owned by Japanese-listed brewer Kirin.

So from your mortgage repayments to your insurance to smaller items like the beer you enjoy with a friend, it’s a fascinating exercise to think through the spending habits – and those of people you notice around you – and consider how these transactions contribute to the revenues of companies that are potential investments.

Of course how much profit they are taking out of that revenue is another question and goes to company management, cost structures, and a range of other factors. But it’s a great starting point for the curious.

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