Shares increased by 2.1 per cent following a big announcement from ExxonMobil. Photo / AP
Keeping you up to date with the latest market moves, in association with Investment firm Jarden.
International
US
The United States Department of Labor initial jobless claims data shows a 4,000 increase in claims for the week ending 3 December 2022, taking the total to 230,000.
This was in line with the median estimate from Bloomberg’s survey of economists. The week prior saw an increase of 62,000 and this is now the third week in a row showing an increase in the number of Americans claiming benefits to a level not seen since early February 2022.
Oil and gas Company Exxon Mobil Corporation expressed its intention to repurchase US$50 billion (NZ$78.4b) of its own shares through to 2024.
It previously indicated repurchasing US$30b of its shares through 2023. US$15b of shares will be repurchased this year, the highest annual repurchase by the multinational since 2013.
Shares increased by 2.1 per cent following the announcement. Management announced the capital budget range to be spent on energy projects next year to be US$23b to US$25b and a US$17b budget for low-carbon projects through to 2027.
Rest of World
The European Commission announced its intention to collect an additional €18 billion (NZ$29.8b) in value added tax, in response to serious tax fraud activity in Europe.
The proposal will require companies to provide real time digital reporting where they are selling goods across borders to help authorities catch fraudsters.
Officials claim this can reduce Value Added Tax Fraud by up to €100b euros over the next 10 years and reduce administrative and compliance costs for European traders by €4b over this period.
An upfront cost of €11b in accounting and technology expenses would be required according to their estimates.
The Hang Seng Index rose 3.4 per cent on Thursday, reversing the 3.2 per cent loss it saw in the previous trading session as gains were broad across industries and sectors as easing of Hong Kong’s Covid-19 restrictions were announced.
The isolation period for infected persons and close contacts would be shortened from seven days to five.
Commodities
Natural gas prices have risen 5.9 per cent, partly attributable to the record volume being imported within Europe as the continent is set to experience temperatures well below freezing in the coming days.
Nuclear outages and slumps in wind power across Sweden and France are also putting a strain on power and gas networks.
Notably Europe’s s storage levels are more than 90 per cent full, dropping from almost 96 per cent in mid-November.
However, the Chinese Government’s relaxation of Covid restrictions could see an increase in demand and competition for natural gas if there is a bout of cold weather in Asia going into 2023.
Australia
Diversified mining company Chalice Mining surged 13.1 per cent on close, as a significant new sulphide mineralisation at the Hooley prospect was discovered following reconnaissance exploration drilling.
Located within a project in Western Australia, the mineralisation was intersected from all five reconnaissance holes from three drill sites over about 1.8km of strike length.
The company said the geology and mineralisation at Hooley is quite variable but the initial drilling is considered highly encouraging due to the high-grade mineralisation encountered.
Wide-spaced reconnaissance and step-out drilling is continuing at the Hooley Prospect.
Mining company Downer Group fell 20.4 per cent after cutting profit guidance to A$210 from A$230 million due to “difficult weather conditions and elevated cost to serve issues.”
Also announced yesterday was that pre-tax earnings had been overstated by a range of A$30 to A$40 million over the past four financial years and management is in the process of measuring the ongoing impact on earnings.
A contract signed in July 2019 had recognised revenue on individual work orders in advance of cost. The increased revenues had been mismatched to costs and overstated contractor profitability for each reporting period since.
New Zealand
Air New Zealand shares rose 2.0 per cent on close as management increased 1H23 earnings guidance from $200 to $275 million provided in mid-September 2022 to $295 to $325 million.
This range is based on current forward sales expectations and assumes an average jet fuel price of around US$127 per barrel.
With the six-month average price declining and current jet fuel prices are about US$102 per barrel, management stated this price change alone contributed $20 million to the earnings upside in the increased guidance.
The new guidance range is also made with the assumption that the airline will fly approximately 75 per cent of pre-Covid capacity levels across their network within the half year ended 31 December 2022.
Management said capacity was constrained which will to continue to impact pricing and many risks are still present that could slow the airline’s recovery and impact earnings. Addressing this, full year guidance has not been provided.
Fonterra shares also saw a rise of 4.7 per cent on close yesterday, the highest of the NZX 50 companies.
This came on the back of management lifting earnings guidance and a strong Q1 result.
Guided earnings range had been upgraded to 50 to 70 cents per share, from 45 to 60 cents per share for FY23, with its forecast for Farmgate Milk Price made narrower and brought lower to $8.50 to $9.50 per kilogram of milk solids.
The strong Q1 result featured strong margins in protein and cheese products, which drove the increase in group normalised earnings before interest and tax by 94.0 per cent over the previous quarter.
Net profit after tax is also up 84.0 per cent, further giving confidence in their upgraded guidance, while also flagging the wider range is due to short to medium term volatility.
Coming up today
Stats New Zealand will release business employment and financial data for the quarter ended September 2022 and Electronic Card Spending data for November 2022.
For more information on the latest market moves, get in touch with Jarden.
All market pricing and announcements are sourced from Refinitiv, NZX and ASX.
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