Keeping you up to date with the latest market moves, in association with Investment firm Jarden
The S&P NZ50 was down 1.2 per cent on Wednesday. Small cap stocks outperformed as the S&P NZ Small Cap index rose 0.2 per cent.
Financials was the only sector that finished positively on the day, rising 1.6 per cent. Consumer non-cyclicals and Consumer Cyclicals were the worst-performing sectors on the day, falling 3.1 and 2.5 per cent respectively.
Freight and shipping company, Mainfreight, led the positive performers, up 2.5 per cent on the day after performing poorly yesterday. Tourism Holdings continued its positive run, up a further 1.5 per cent. Dairy exporter, A2 Milk, was the worst performer, ending the day down 4.9 per cent despite opening 5.0 per cent higher. Napier Port and Pushpay Holdings also performed poorly, down 4.3 and 4.0 per cent respectively.
Corporate travel company, Serko, released its half-year results and fell 3.4 per cent. Total operating revenue for the period was $5.1 million. This figure was 66 per cent lower than the $14.7 million earned in the same period last year. Net loss after tax was $10.1 million, compared to a $0.9 million net loss in the previous six months.
This is primarily due to a Covid-19 impact and Serko investing in expansion into Northern Hemisphere markets ahead of anticipated travel recovery. Despite the poor performance, investors should consider the outlook for Serko going forward. Given that the company is presently trading on a high revenue multiple, investors should also consider what has been priced in already.
Napier Port Holdings released its full-year results and fell 4.3 per cent. Annual revenue was up 0.8 per cent from $99.6 million to $100.4 million. Pro forma net profit after tax rose by 4.2 per cent to $20.4 million, in line with forecasts made.
Though the company is confident about the economic and regional outlook to enable continued investment in their wharf infrastructure, they noted that revenue in the upcoming financial year will continue to be impacted by the ongoing Covid-19 aftermath.
At time of writing, all indices were in the green with the SPX500 up 0.2 per cent, the Dow Jones Industrial up 0.3 per cent and the Nasdaq up 0.3 per cent. Small stocks slightly outperformed, with the SPX Midcap 400 up 0.4 per cent.
Financials and industrials were the best-performing sectors at time of writing, up 1.3 and 1.0 per cent respectively. Healthcare and Technology were both in the red, down 0.6 and 0.2 per cent respectively.
Hydrocarbon refining solutions provider, TECHNIPFMC, was the best performing stock in the index, up 7.8 per cent. Fellow oil exposed company, Diamondback Energy, also performed well, up 5.7 per cent.
Home improvement company, Lowes, was the worst-performing stock in the index, down 6.1 per cent.Cruse company, Norwegian Cruise Line Holdings, also had a bad night, down 4.1 per cent.
Much has been made of the recent announcements about Covid-19 vaccine candidates. In further good news that speaks to their effectiveness, the vaccines could be distributed to US healthcare workers within a month. A Food and Drug Administration emergency use authorisation would be the quickest path to deployment.
At time of writing, the Shanghai index was up 0.2 per cent and the Shenzhen index down 0.4 per cent. The Nikkei 225 was also down 1.1 per cent.
Chinese technology company, Tencent Holdings, is the lead investor in a new funding round for online education business, Udemy. For the purposes of the funding round the company has been valued at over US$3 billion, with there also being speculation that the company may IPO sometime next year. Online education is one of the sectors benefitting from lockdown measures, making it one of the most tightly contested business spaces in China.
At time of writing, Gold was up 0.1 per cent, trading at US$1880.6 per ounce. WTI Crude was up 1.6 per cent, trading at US$41.9 per barrel. The ten-year treasury yield was down to 0.87 per cent.
The ASX 200 rose for the third day in a row, up 0.5 per cent despite the continued increase of Covid-19 cases in South Australia. The market seemed to shrug off news that Adelaide returned to a six-day ‘hard’ lockdown as of midnight last night, with reports that shoppers are filling supermarkets ahead of isolation.
Big banks drove gains with Financials up 1.7 per cent. Commonwealth Bank (+2.9 per cent), Westpac (+2.3 per cent), NAB (+2.1 per cent) and ANZ (+1.3 per cent) all performed well, with the S&P ASX 200 Banks index now up 18 per cent since the start of October.
Afterpay and Zip may soon see a new competitor join the fray, with media speculating that US-based giant, Affirm, is preparing to enter the Australian market. Affirm has the highest number of monthly active users in the US, with almost 300,000 customers using its platform in September – compared to ~200,000 for Afterpay.
Wednesday was also a big news day for the gambling industry, with Crown Resorts dipping slightly after New South Wales regulators blocked the opening of its $2.2 billion dollar Sydney harbourfront casino. The company was placed in trading halt after acknowledging that it was ‘more probable than not’ that criminals had laundered money through two of Crown’s shell bank accounts.
Further, electronic gaming machine manufacturer, Aristocrat Leisure, cut its dividend by 70 per cent to 10 cents after a poor performance during the 2020 financial year. Group revenue fell by 5.9 per cent to A$4.1 billion, while operating profits dropped 46.7 per cent to A$476.6 million. Despite the decline in bottom line profit, investors seem to be buoyed by the results, with the share price rising just over 3.8 per cent.
Expect initial and continuing jobless numbers, existing home sales and the index of leading economic indicators. Sixty-five companies, including Macy’s ltd, will also report earnings.
In Australia today, many companies will hold their AGMs – with notable ones including Goodman Group, Bluescope Steel, Resmed and Senex. Seek’s AGM may also be closely followed, in light of the recent controversy surrounding the short report from Blue Orca.
Disclaimer: This Morning Brief has been prepared in good faith and reflects opinions and views at the time of publication, using external sources, systems and other data and information we believe to be accurate, complete and reliable at the time of preparation.We make no representation or warranty as to the accuracy, correctness and completeness of that information, and will not be liable or responsible for any error or omission.This Morning Brief is not to be relied upon as a basis for making any investment decision. Please seek specific investment advice before making any investment decision. Jarden Securities Limited is an NZX Firm, a broker disclosure statement is available free of charge at www.jarden.co.nz. Jarden is not a registered bank in New Zealand. Full disclaimer available at: https://www.jarden.co.nz/limitations-and-disclaimer
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