The game company is going through a turbulent period. Photo / Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
The NZX 50 declined again yesterday, falling 0.3 per cent.
Energy and financials led the index downwards, losing 2.2 and 1.4 per cent, respectively. Comparatively, the only two sectors to rise yesterday were utilities and consumer non-cyclicals, gaining 0.2 and 0.1 per cent, respectively.
Investore Property declined 2.6 per cent, losing some of the gains made following its interim results release earlier in the week, while Z Energy fell 2.2 per cent. This follows weakness in Ampol's stock price since the start of the month. In October, Z and Ampol entered into an agreement proposing that Ampol would acquire all shares of Z, subject to several conditions including regulatory approval.
Meanwhile, AFT Pharmaceuticals rallied 3.9 per cent following its first half earnings result of $5.5 million. The company remains on track to meet its full year guidance of $18 million to $23 million, with management confident in a stronger second half performance.
It was also announced that a dividend policy remains on the cards, once the company is able to reach net debt of $25 to $30 million as well as earnings guidance.
The Fonterra Shareholders' Fund fell 2.1 per cent. Shareholder voting opened yesterday for Fonterra's proposed capital structure changes. A backing of 75% is required from voting farmers to get the minimum support required.
The top performing company was Contact Energy, rising 2.4 per cent following the announcement that the bookbuild for its offer of unsecured subordinated green capital bonds has been completed. It confirmed $225 million has been reserved for clients of the book build participants, including $25 million of oversubscriptions. The interest rate has been set at 4.33 per cent per annum.
Trustpower gained 2.0 per cent. It announced the appointment of Michael Smith to the Board of Directors yesterday.
Sanford increased 1.9 per cent. It released its financial year 2021 results on Thursday, which detailed EBIT of $24 million. Salmon performed on the upside while the performance of wild catch and mussels showed signs of improvement.
International
US
The major US indices showed some mixed performance at the time of writing. The S&P 500 rose 0.3 per cent, the Dow Jones Industrial Index decreased by 0.1 per cent, and the NASDAQ traded 0.5 per cent higher.
Utilities (-0.7 per cent) and consumer staples (-0.6 per cent) were the laggards of the day, while consumer discretionary (+1.5 per cent) and technology (+0.7 per cent) performed well.
The top gainer at the time of writing was Nvidia Group, rallying 10.2 per cent to a new 52-week high. The graphics card manufacturer delivered a strong third quarter earnings report. Revenue came in at US$7.1 billion as sales grew by 50 per cent. The net income of the firm was US$2.5 billion, beating market expectations of US$2.3 billion.
Next in line was body care retailer Bath & Body Works, rising 7.2 per cent after posting a strong third quarter earnings result yesterday.
Apparel company Gap also joined the leaderboard, up 5.6 per cent.
On the flipside, Cisco Systems dropped 7.8 per cent. The networking technology provider delivered its second quarter earnings report, which appears to have disappointed investors. CEO Chuck Robbins referred to supply constraints as contributing towards the weaker-than-expected forward guidance given at the results announcement.
Frozen potato products producer Lamb Weston Holdings also lost ground, decreasing 4.0 per cent.
Rounding out the biggest decliners of the session was Activision Blizzard, down 3.9 per cent. The video game developer was recently subject of an investigation by a major US media outlet. This alleged the company's CEO Bobby Kotick knew about claims of sexual harassment at the company without taking action against it, or informing the board. Activision said in a statement that the media reports were misleading. The company is also facing court action after an investigation conducted by California's Department of Fair Employment and Housing.
Rest of the world
The most popular Asian indices traded lower across the board overnight. The Nikkei (Japan) decreased by 0.3 per cent, the Shanghai Composite (China) declined by 0.5 per cent, and the Hang Seng (Hong Kong) traded 1.3 per cent lower.
Chinese property developer Evergrande (-4.1 per cent), which has made headlines this year, risks continued defaults if it cannot turn around its current trajectory. A filing published yesterday shows that the developer is attempting to sell its remaining shares 18 per cent stake in film production and streaming company HengTech Networks, which could raise up to US$273 million - representing a fraction of Evergrande's debt owed to investors.
Later today at the Guangzhou Auto Show, visitors will be able to experience test rides of autonomous driving taxis. Chinese start-up WeRide is developing the systems and partnered with car manufacturer Guangzhou Automobile Group (GAC Group) to create the driverless cars. The companies are planning to offer rides in the 'robo-taxis' in 2022, accessible to the broader public via the ride-hailing app Ontime. The offering is facing fierce competition, for example by Baidu (-4.0 per cent), which is planning to launch its own robo-taxis in 100 cities by 2030.
Commodities
Gold declined by 0.4 per cent to US$1,863.70 per ounce.
Oil traded 0.3 per cent higher to US$78.66 per barrel.
Cryptocurrencies underperformed across the board, with Bitcoin declining 4.2 per cent and Ethereum down 4.4 per cent.
The US 10-year treasury rate decreased slightly, yielding 1.584 per cent, at the time of writing.
Australia
The ASX 200 edged up a slim 0.1 per cent yesterday, despite a second day of declines for
the large cap banking sector.
ASB-parent company CBA fell another 1.6 per cent following its 8.1 per cent drop yesterday, while National Australia Bank (-0.7 per cent), ANZ (-1.3 per cent), and Westpac (-1.0 per cent) also continued to fall.
On the other hand, Treasury Wine Estates climbed 2.6 per cent after announcing the acquisition of US luxury wine producer Frank Family Vineyards for circa US$315 million. The purchase is expected to be earnings accretive from its expected completion in December, and funded by a mixture of cash and debt. An accretive merger or acquisition is when the acquiring firm's earnings per share increases after the deal goes through. The new vineyard will also fill the gap for high-end Chardonnay in Treasury Wine Estate's portfolio of products.
Electronic gaming machine giant Aristocrat Leisure fell 3.6 per cent, after warning the market that it's A$3.8 billion bid for the UK-based Playtech has seen a third competitor enter the ring. At the moment, Aristocrat, JKO Play, and Gopher have all indicated interest in acquiring Playtech – and more bidders may result in Aristocrat's shareholders paying a higher price for the acquisition.
News of the bearish M&A situation seemed to outweigh Aristocrat's largely positive result, which saw the company record a A$865m profit for the year.
Insurer Suncorp climbed 1.0 per cent after announcing that the Australian Federal Court has ruled in its favour regarding an appeal around a December 2020 business interruption case. This involved business owners attempting to claim insurance cover for losses in relation to Covid-19.
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Disclaimer: The Jarden Brief is provided for general information purposes only. It reflects views and research available 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. The Jarden 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 financial advice disclosure statement is available free of charge at https://www.jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement/ Full disclaimer available at: https://www.jarden.co.nz/wealth-sales-and-research-disclaimer
A fifth of Kiwis expect to be better off this time next year, up by eight points.