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New Zealand
The S&P NZ50 finished the day down 1.4 per cent. The size factor was in play, with smaller companies outperforming larger ones with the S&P NZ Small Cap Index was down only 0.6 per cent.
The best performing sector on the day was Health Care, which retreated 0.3 per cent, while the next best was Consumer Discretionaries, falling 0.5 per cent. The worst performing sector on the day was Utilities, falling 2.5 per cent, followed by Consumer Staples, down by 2.0 per cent.
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The best performing company on the day was fast food chain franchisor and operator Restaurant Brands, which jumped 3.4 per cent, despite no price sensitive announcements directly related to the company. Meanwhile, retail bank operator Heartland Group, which jumped 2.2 per cent.
The worst performing company on the day was Cancer diagnostics company Pacific Edge, down 6.2 per cent – a continued decline following its meteoric rise in the late stage of 2020, during which the stock price shot from a low of 7 cents in April to a peak of $1.23 in December. The gentailers also continued to fall following a strong performance over the Christmas period due to increasing inflows into the Clean Energy ETF, with Meridian and Contact falling 5.5 and 3.9 per cent, respectively.
Telecommunications company Rakon, up 4.0 per cent, yesterday announced that it would be upgrading its earnings guidance for the financial year ended March 2021.
Where previous earnings before interest, taxation, depreciation and amortisation guidance was for $16 - $18 million, the upgraded guidance has the range between $20 - $22 million. The global rollout of 5G network capacity has created a greater than expected demand for Rakon's products.
Growth has also been driven by increases in global data volumes and cloud-based applications. The company expects that 5G deployment will continue to be a driver of growth for the foreseeable future.
INTERNATIONAL
US Markets:
The US market was closed yesterday for Martin Luther King Day, although US futures were up by 0.2 per cent at time of writing.
News flow was also quiet, although the market is likely looking toward increased volatility this week with Biden's inauguration to come this Wednesday in US time.
Asian markets:
Overnight the Shanghai and Shenzhen indices were both up by 0.8 and 1.0 per cent respectively, although the Nikkei 225 fell by 1.0 per cent.
The rise may have been due to China reporting a 2.3 per cent increase in its economy last year, with GDP in the fourth quarter up 6.5 per cent year on year. The figures beat economist estimates of 2.0 per cent and 6.1 per cent growth, respectively. The GDP rise comes despite reports that Chinese consumers have changed their spending habits, with retail sales down 3.9 per cent for the year and only accounting for 54.3 per cent of GDP – down from its 57.8 per cent contribution in 2019.
Commodities:
At time of writing, Gold was up a further 0.6 per cent, trading at US$1837.04 per ounce. WTI Crude was down 0.5 per cent, trading at US$52.09 per barrel.
Australia:
The S&P ASX 200 finished the day down 0.8 per cent.
The best performing company on the day was medical software writer Pro Medicus, up 11.0 per cent followed by automotive accessory manufacturer ARB corporation, up 4.8 per cent.
Insurance provider QBE was the worst performer on the day, down 5.7 per cent. Basic material stocks also fared poorly, with alumina and bauxite producer Alumina Limited, and copper producer Sandfire both dropping 3.8 per cent.
QBE's poor performance can be partially explained by a decision by the Supreme Court of the UK. The ruling overturned case law in favour of the insured with respect to QBE's notifiable disease policy wordings. This result will increase the cost of business interruption cases in the UK for QBE.
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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