Jarden Brief: Westpac could become the biggest company on NZX

Westpac is undertaking a strategic review of its New Zealand operation. Photo / File

Keeping you up to date with the latest market moves, in association with Investment firm Jarden

New Zealand

Yesterday, the NZX decreased slightly by 0.3 per cent.

The top gainer of the day was Mercury NZ, increasing 4.6 per cent to $6.59. The company's Green Bond bookbuild is currently underway and is expected to be issued this Monday. Mercury has offered up to $200 million of five and a half year unsecured, unsubordinated fixed rate Green Bonds.

Rounding out the top performers were Fisher & Paykel Healthcare, up 2 per cent to $31.40 and Port of Tauranga, up 1.6 per cent to $7.62. Ports of Auckland had to face the Council Controlled Organisation Oversights Committee on Tuesday to explain its continued underperformance, which created favourable conditions for the Port of Tauranga.

Vista Group saw the biggest drop, moderating 5.9 per cent to $2.08 following a 28 per cent surge since the beginning of the month.

Oceania Healthcare was down 4.3 per cent to $1.33 after coming out of trading halt. Jarden is joint lead manager and underwriter for Oceania Healthcare capital raise.

Rounding off the worst performers was agriculture product specialist, Skellerup Holdings, decreasing 3.3 per cent to $4.06.

Serko has commenced transitioning existing Booking.com business customers onto its new Zeno platform, with the majority of its customers to be migrated over the next 2 to 3 months. This is an important milestone for Serko and is 9 months ahead of the original schedule. While this may have little impact on financial performance in the short term, Serko is likely to see a ramp up in revenue over the next few years.

The Warehouse will release its half year results today, and Hallenstein Glasson Holdings will do so tomorrow.

INTERNATIONAL
US Markets:

The US markets were a mixed bag at time of writing, with the S&P 500 up 0.4 per cent, the DJIA up 0.8 per cent and the NASDAQ falling 2.0 per cent.

The best performing sector of the day was Energy, rising 3.2 per cent, while Communication Services dropped 2.5 per cent.

Semiconductor company, Applied Materials, rose to a 52-week high today, gaining 6.3 per cent as the top performer of the day in the S&P 500. The Energy sector was helped by oil and gas company, Diamondback Energy, adding 5.2 per cent, mirroring today's rise in oil price.

The stocks performing the worst overnight were Viacom, which fell 18.3 per cent following Tuesday's announcement that it was going to raise US$3 billion through a share offering. Despite this dip, the company's price has increased over 100% since December 2020.

Short squeezed stocks dipped, with GameStop falling 20.2 per cent today after suggesting it may look at exploiting its high share price via a possible share sale to fund its eCommerce expansion. Meanwhile, Discovery Channel has also fallen 10.3 per cent at the time of writing.

International Markets:

Asian markets were in the red again yesterday with the Shanghai index down 1.3 per cent, the Nikkei falling 2.0 per cent and the Hangseng down 2.0 per cent.

This caution comes in the wake of concern surrounding Europe's progress in recovery from Covid-19 with case numbers in Germany, France and Italy continuing to rise and hiccups in vaccine programme rollout.

Commodities:

Gold increased in price today to US$1731.70 per ounce, an increase of 0.4 per cent. Oil prices more than recovered from yesterday, rising 5.2 per cent to US$60.73 a barrel. Bitcoin rose 1.5 per cent today and Ethereum had decreased by 0.3 per cent.
Lastly, US 10-year Treasury yields fell a minor 0.01 today, currently priced at a 1.63 per cent yield.

Australia

The ASX finished yesterday's session up 0.5 per cent, led by sector gains from both Healthcare and Consumer Non-Cyclicals which were up 2.1 and 1.1 per cent, respectively.
Agribusiness company, Graincorp, led the single stock winners with an impressive gain of 6.2 per cent after its investor day presentation and results were viewed favourably by investors. Following suit was online advertising company, REA Group (+4.9 per cent), which recovered some losses after a poor month for the stock.

In contrast, Academic and Educational Services along with Energy were the underperforming sectors of the day, each down 0.8 per cent.

Resource/Materials company, Lynas Rare Earth Metals Ltd, fell 9.1 per cent along with Travel company, Webjet which slumped 4.9 per cent.

Headlines were dominated as Westpac Banking Corporation (AU) is believed to be undertaking a strategic review of its New Zealand operations. Despite the bank's Kiwi arm reporting substantial earnings of over A$600m last year, it will be re-considering ownership of its New Zealand operations. It is understood a combination of increased regulatory scrutiny in both the Australian and New Zealand banking markets is a contributing factor to the review. If it were to list, Westpac is expected to have a market cap of around NZ$20 billion – which would make it the largest company on our stock exchange by far.

Xero has agreed to acquire 100% of Swedish e-invoicing business, Tickstar, for SEK$150m - settled half in cash and half in Xero shares. Xero would not confirm how many customers Tickstar has, although it is known that they have customers across Australia, NZ and Singapore. The transaction is expected to complete in the first quarter of 2022, with integration and operating costs expected to have minimal negative impact on earnings in that year.

• For more information on the latest market moves, get in touch with Jarden.

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