Scentre Group Share Price Up 4%, REIT Bargains Might Not Be in Retail

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Today, we look at the Scentre Group [ASX:SCG] share price.

The SCG share price is up 4.27%, trading at $2.20 at time of writing.

Here are the key takeaways:

  • Retail may take longer to bounce back
  • Market could have another leg down
  • Industrial may have more appeal

Let’s check out the SCG share price chart to see what’s been happening since our last look at it:

Source: tradingview.com

Peak market fear from mid-March, bargain hunting for a couple weeks, then two bursts upwards which I would say are based on the assumption that things might get back to normal.

Retail Rebound for SCG? Still living in the toilet paper economy

What to make of all this?

It’s possible we may see another burst upwards, which would include today’s gain, for a third ‘Retail Rebound’ surge in buying.

I have a feeling this will be short lived, though.

Even if restrictions are eased, Aussies may not want to go back to the shops in a hurry.

Let alone burn what little disposable income they have on retail therapy.

Such is life in the toilet paper economy.

ASX could have another leg down

There could be another leg down for the market in the coming few weeks, say 10–15% off current levels.

We are still missing some key data points about the full effect of COVID-19 on the Australian economy.

Lots of projections, but many (the ABS included) are still assessing the total fallout.

Looking at the monthly chart for the ASX since it started, you can see it bounced off of the ‘buy-zone’ I had marked:

Source: tradingview.com

Hovering just above this, patience may be key.

It could go two ways.

A full-fledged rebound that won’t look back until 2026.

Or another fall.

The chart will shortly confirm which one, but for now I’d be hesitant to say the market is out of the woods.

I think if you see another 10–15% fall on a monthly bar, then you can start talking about bargains.

It’s worth noting that, Goodman Group [ASX:GMG] is now the largest REIT on the ASX, by a long way.

This may be pointing to industrial bouncing back stronger than retail REITs like SCG.

You still need a place to work — more so than you need a place to shop.

Regards,

Lachlann Tierney,

For Profit Watch

PS: Our publication Profit Watch is a fantastic place to start your investment journey. We talk about the big trends driving the ASX. Learn all about it here.