Eftpos provider SmartPay's trading update highlights a strong recovery in Australia and a growing volume of transactions. Photo / File SmartPay's business model derives most of i
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
NZX Market Wrap:
Monday was another quiet day for the markets with low trading in large cap stocks, although Pacific Edge continued to climb, gaining 11.6 per cent.
The stock
closed at $0.77, now up 430 per cent for the month. The previously small-cap stock was boosted by the announcement of ANZ's $22 million investment in the company at $0.65 a share last. Total market capitalisation returned to over $500 million.
Blackwell Group plummeted by another 39.5 per cent to 2.6 cents, after last week's announcement that a misplaced decimal point had led to a massive over-valuation of the company's assets. The NZX has confirmed it is investigating the mistake, although it has remained tight-lipped on any potential implications.
SmartPay highlights positive Australia recovery
Dual-listed Eftpos provider SmartPay has released a trading update for the first quarter of its 2021 financial year, highlighting strong recovery in Australia and increasing magnitude and volume of transactions.
SmartPay getsmost of its revenue from the provision of Eftpos terminal services, with around 59 per cent of its revenue last year coming from New Zealand and the remainder from Australia. As such, the months of April and May were tough, with few physical transactions during the lockdowns imposed across both New Zealand and Australia.
However, transacting terminals are now back to 95 per cent of pre-Covid levels, and the emphasis on contactless payment methods for health and safety reasons could signify a positive outlook for SmartPay.
International markets: Risk assets strong start to week; Gold closing in on $2000
At the time of writing, Shenzhen (+0.32 per cent) and Shanghai (+0.26 per cent) markets were positive, despite increasing Covid-19 cases and increasing trade tension between the US and China. Risk assets around the world followed suit. The Dow Jones was up 0.2 per cent, the S&P500 was up 0.6 per cent and the Nasdaq was up 1.35 per cent, with a strong bounce back from the tech sector after its underperformance the week before.
The market was buoyed by durable goods orders beating expectations by 0.3 per cent, despite economists believing this will not be sustained. Therefore, with increasing cases in July and stricter lockdowns, look out for slowing orders for the July month.
At the time of writing, Moderna was up over 8.5 per cent after confirming they received further backing from the government of US$472 million. The stage three clinical trial begins today. 30,000 patients will be dosed, the presence and quantity of antibodies being the key performance indicators. With the stock up over 280 per cent Year-To-Date, and EPS still negative, success in this trial will support investors' hopes for a successful vaccine. Success would lift EPS and justify the stock price increases.
Commodities:
Oil continued its surge, rising 1 per cent to US$41.68 per barrel. Gold was also up 2 per cent to US$1930 per ounce, continuing to advance as the US dollar falters, with more people beginning to look for safe haven assets. The US 10-year treasury yield remains relatively unchanged at 0.607.
ASX Market Wrap:
buoyant gold prices lift miners, insurers struggle
The ASX200 was unphased by the record high number of Covid cases in Victoria yesterday as it closed the session 0.3 per cent higher.
Gold stocks were the shining light of the day as the price of gold rose to a record high. Mining companies led the performers with Lynas Corporation rising 12.0 per cent to A$2.43 and Resolute Mining rising 5.9 per cent to A$1.44.
Lynas reacted strongly to news that Phase I work on a U.S based Heavy Rare Earth separation facility has proceeded to the contract phase.
The worst-performers were Insurance companies, Insurance Australia Group continuing its decline following a weak earnings announcement on Friday, down 5.3 per cent to A$5.04, and Corporate Travel dipping 4.1 per cent to A$8.95. Fellow insurer, Suncorp Group also battled, falling 2.2 per cent to A$8.78 as the outlook for insurers appears worse.
Other strong large-cap performers were Newcrest Mining, rising 4.9 per cent to A$36.31, Aristocrat Leisure jumping 1.7 per cent to A$26.44 and BHP climbing 0.9 per cent to A$37.40.
Medusa Mining meet full year production guidance, producing just under 22 ounces in the June quarter.
Surges in the value of gold over A$2700 per ounce (over US$1929 per ounce) have added A$2 billion in market cap value to Newcrest Mining, Evolution Mining and Northern Star Resources, the three largest gold miners listed on the ASX.
The Australian Office of Financial Management has indicated the new 30-year government bond arriving this week will be priced at 98 to 105 basis points over the yield on 10-year bond futures. The 10-year bond yield currently sits at 0.898 per cent.
Several listed real estate investment companies are holding their annual general meetings this week, with Asset Plus and Argosy Property later today and Stride Property Group on Wednesday.
Economic data out in the US tomorrow are the Case-Shiller national home price index and the Consumer confidence index.
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 here. Jarden is not a registered bank in New Zealand. Full disclaimer available at: https://www.jarden.co.nz/limitations-and-disclaimer