Mark Lister is Head of Private Wealth Research at Craigs Investment Partners. This column is general in nature and should not be regarded as specific investment advice.
Comvita is worth watching on the export front.Picture / NZME February will be a busy time for analysts and investors, with about two-thirds of our listed companies reporting six-monthly results over the coming weeks.
This will have a major influence on where the market goes from here, while outlook statements will tell us a lot about the changing dynamics in our economy.
Despite a subdued start to the year (especially compared to others around the world), the local sharemarket is trading at elevated levels, leaving the bar fairly high for most companies.
We're expected to have another decent earnings season. Of the top 50 companies, seven out of 10 are expected to see profits rise in the 2018 financial year. Four in 10 are forecast to post double-digit increases, while median earnings growth is estimated to be almost 7 per cent, slightly ahead of last year.
There are several themes to watch during the reporting season, if not explicitly in the cash flow statements, then in the vibe we get from management.
The current rhetoric is that our economy is heading into a slower patch, as migration comes off the boil and the housing market shifts into low gear. Recent business confidence surveys support this view, although perception could be dominating reality in these, to some degree.
Companies like Freightways and Trade Me have big domestic operations, so their results might give us evidence of this.
In contrast, almost everyone is ramping up their estimates for global growth. These days, we've got plenty of companies doing substantial business offshore, and many will be benefiting from this strength.
Against the US dollar, our currency will have been a handbrake for some, although companies exporting to Australia, the UK and Europe will have experienced a minor tailwind. Scales, Comvita and Ebos are a few worth watching in this regard.
Surprisingly, the impact of rising oil prices will probably be minimal. Prices were only marginally up (on average) during the last six months of 2017. However, they've kept rising in 2018 so one would expect the likes of Air New Zealand to comment on growing cost pressures.
One company that will be in focus is a2 Milk. The star performer from last year has been one of the strongest this year as well, so the market will be expecting big things once again.
This doesn't leave the infant formula producer much room for disappointment, although looking at their track record you'd be brave to bet against them.
At the other end of the spectrum, Fletcher Building will get a lot of attention. It was this time last year things started to go horribly wrong for our biggest construction company, and the share price is still almost 30 per cent below those levels.
However, there's a new CEO on board that is strongly incentivised to get things back on track, and Sir Ralph Norris won't want a repeat of the 2017 annual meeting.
Tourism Holdings beefed up their profit guidance late last year on the back of tax cuts in the US, while Summerset also upgraded their earnings forecasts.
More recently Mercury and Kathmandu have delivered some good news, while Z Energy is the only major company to downgrade guidance, and that was relatively minor in the scheme of things.
As for the rest, we'll have to wait and see.