Website of the YearKeeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
The S&P NZ50 finished the day up 0.5 per cent. Larger companies outperformed as the S&P NZ10 rose 0.9 per cent.
The best performing sector on the day was Industrials, rising 1.2 per cent, followed by the Utilities sector, which rose 0.8 per cent. On the other hand, cyclical stocks had a poor showing with Energy falling 2.2 per cent and Consumer Discretionary retreating 1.7 per cent.
Retirement village operator Oceania Healthcare, which advanced 3.4 per cent, was the best performing stock during yesterday's trading. Oceania released its half-year results on Friday which featured a 2.0 per cent increase in unaudited underlying earnings before interest, tax, depreciation or amortisation. The company's unaudited net profit after tax was up $9.9 million to $24.8 million. The company also reported no recorded cases of Covid-19 in its facilities to date. Having traded down marginally on Friday, the market may have decided that the result constituted good news on balance.
Read More
The third worst performing company on the day was airline operator Air New Zealand, falling 3.5 per cent after the new Covid case in Northland was announced. Following last night's announcement that Australia has suspended the one-way isolation-free travel bubble for the next 72 hours, it will be interesting to see how the stock price reacts. Meanwhile, bladder cancer diagnostics company Pacific Edge continued to drop, down another 3.8 per cent.
The Australian has reported that investment company IFM may be lining up a bid for New Zealand Infrastructure holding company Infratil. This comes after a previous bid from AustralianSuper was turned down by Infratil's board for "materially undervaluing" the company's portfolio of assets. Infratil was up 2.7 per cent on yesterday's trading and could be up more depending on the realisation of a bid from IFM. Recall that Infratil's stock rose approximately 20 per cent when AustralianSuper's bid impliedly valued the company at $7.25 per share. Infratil closed yesterday at $7.58.
INTERNATIONAL
US Markets:
All three major indices were relatively flat overnight despite a bearish European market, with the S&P 500 and Dow Jones both moving 0.2 per cent down. Tech stocks seemed to have more to add however, and the NASDAQ index crept up by 0.1 per cent.
The Energy sector was the worst performing yesterday, down another 2.6 per cent on Friday's losses, while there seemed to be a rotation into non-cyclical stocks such as Utilities (+1.9 per cent) and Consumer Staples (+0.9 per cent).
Gamestop shares continued to have a volatile trading session, with the stock price increasing by 49.4 per cent on open to US$144.59, before losing more than half its value - dropping 57.7 per cent to US$61.1. The stock has recently been embroiled in a battle between institutional and retail investors, with the latter challenging big money shorting the stock, through the internet forum Reddit.
Gamestop, which owns EB Games on both sides of the Tasman, has risen from US$17.25 at the start of the year to US$69.43 at time of writing – a huge 302 per cent gain. Many believe that the gains have been fuelled by a retail-led short-squeeze, although 72 million open shorts still remain – more than 140 per cent of GameStop's entire market float.
Asian markets:
Overnight the Shanghai index was up 0.5 per cent while the Nikkei added 0.7 per cent. The Hangseng surged 2.4 per cent, following a 10.9 per cent gain in market giant Tencent Holdings.
The surge in buying interest for Tencent has pushed its stock price up by 33.9 per cent since the beginning of the year, adding US$251 billion to its market cap – the biggest market cap increase by dollar value in the world. Reason for the gain may be the recent sanctions against its rival Alibaba by the Chinese government, with Tencent seemingly able to avoid increasingly stringent regulator oversight for now.
Commodities:
At time of writing, Gold was up by 0.3 per cent, trading at US$1858.17 per ounce. WTI Crude was up 0.2 per cent, trading at US$52.39 per barrel.
Australia
The S&P ASX200 finished the day up 0.3 per cent with Consumer Discretionaries leading gains, rising 1.0 per cent. Tech stocks also performed well, advancing 0.9 per cent while Energy stocks slid 1.4 per cent. The next worst performing sector was Industrials, down 1.0 per cent.
The best performing companies on the day were international education organisation IDP Education (+5.8 per cent), aerial imagery technology and location data company Nearmap (+5.1 per cent), and fintech Netwealth Group (+4.1 per cent).
Shareholders of Australian listed beverage bottler Coca-Cola Amatil Ltd, up 1.3 per cent, are being asked to vote on a $12.75 per share acquisition offer from Coca-Cola European partners. However, analysts say that, given an announcement on Friday that surprised to the up-side, and a market price that has moved beyond the offer price, the offer may be rejected. More generally, the trading update showed that soft drink, water and juice sales volumes had recovered in the Oceania region.
Moody's has withdrawn the credit rating it had previously provided for a Euro medium-term note issued by a subsidiary of hotel and casino operator Crown resorts. Crown, up 1.3 per cent, notes that if its Yen-denominated notes are unrated or rated as sub-investment grade, holders would be entitled to require redemption of any premium outstanding. Despite withdrawing the rating on the instrument, Moody's continues to provide an issuer rating with respect to Crown Resorts – with a removal of a credit rating generally considered a bad signal for creditworthiness, and a negative catalyst for the stock price. However, being credit provided by a subsidiary, the market may have evaluated the news as insignificant.
• 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