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

New Zealand

NZX market wrap

The NZX ended slightly up, with heavy trading volumes for Spark and Sky TV. The market reaction to the government's extension of level 2.5 for Auckland and level 2 for the rest of New Zealand seemed to be muted, suggesting it was widely expected.

Tourism Holdings led the market up after upgrading its full year guidance ahead of Friday's result.

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Underlying profit is now expected to be about $20 million, compared to the $17.5m to $19.5m expected in June. The figure excludes one-off gains from the company's partial Togo exit, goodwill write-offs and a tax benefit from its US division - including these events, profit was about $27.3m.

Air New Zealand also felt relief of some pressure with the social distancing requirements on planes relaxed. The company offered 180,000 cheap flights to the public after the announcement, 160,000 of which are under $50. Competitor Jetstar also announced its intention to resume domestic flights, effective Thursday this week.

Z Energy announced the appointment of Dr Figen Ulgen to replace Jane Anthony as chief customer officer. Ulgen is currently head of analytics and insights at Woolworths NZ, and fields an impressive resume - previously working at household names Microsoft and Intel, as well as at "Big Three" consulting firm McKinsey & Co.

Contact's August update did not seem to contain many surprises, although shares edged up by just under 1 per cent. Year-on-year mass market sales to retail and SME customers were down 7.4 per cent, and sales from their wholesale business were flat. On the positive side, electricity generated during the month was up 4.9 per cent, and the cost per gigawatt hour generated reduced.

International

Positive acquisition news out today is the announcement Oracle is likely to buy ByteDance's TikTok, and Nvidia is to acquire Softbank's chip division, Arm Ltd for US$40 billion, potentially suggesting a decline in trade tension.

The Chinese markets began the week strongly for risk assets, recovering some of the losses last week. The Shanghai and Shenzhen markets posted a 0.6 per cent rise. Positive risk sentiment flowed into America with merger activity and AstraZeneca's vaccine trial set to continue, leading large market gains. At the time of writing, the Dow Jones was up 1 per cent, the S&P 500 climbed 1.15 per cent and the Nasdaq led the way, due to a strong tech recovery, up 1.6 per cent.

Excitement around the IPO space in America is brewing, as they gear up for potentially the busiest week since May 2019. One of the most highly anticipated, is the listing of Snowflake, a cloud company showing enormous growth over the past calendar year. The company is set to raise US$3.1b through 28 million shares and have recently updated their price range to US$100 to US$110 per share from the initial US$75 to US$85. It has attracted initial attraction from Berkshire Hathaway and Salesforce.com.

Meanwhile, British Prime Minister, Boris Johnson's plans to defy international law with legislation that breaches parts of the Brexit divorce treaty with the European Union. Johnson faces growing tension within his own party as many say they cannot vote for the bill on principal concerns that it may harm the reputation of the UK and reduce the likelihood of a free trade deal.

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Amazon continues its hiring spree, adding another 100,000 jobs in which they say is to keep up with accelerating online demand.

DraftKings surges 18 per cent after the announcement of reaching a deal with ESPN, where the company will become the exclusive provider of daily fantasy sports.

Commodities

WTI Oil declines after analysts forecast further softening of demand over the next financial year. At the time of writing, it was down 0.4 per cent to US$37.20 per barrel. Gold continues to show glimmers of recovery to its record, set more than a month ago. At the time of writing, it was up 1 per cent to US$1965 per ounce. The US 10-year treasury yield remains unchanged at 0.67 per cent.

Australia

ASX market wrap

The ASX 200 finished the day up 0.7 per cent, also buoyed by positive vaccine news.

All peer indices were up, with no apparent capitalisation bias in yesterday's trading. Most peer indices traded within 5 basis points of each other. The ASX Midcap 50 outperformed the others slightly.

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Basic materials and energy were the best performing sectors on the day, up 2.4 per cent. Technology and consumer non-cyclicals were the worst, respectively down 0.3 and 0.1 per cent.

Diversified coal, oil and gas company New Hope Corporation was the best individual performer on the day, up 8.5 per cent. The company rose on a tide of rising commodity prices. Oil futures, natural gas futures and coal futures all rose during overnight trading and during the day. Coal producer Whitehaven Coal was also up, rising 7.3 per cent.

Continuing the commodities theme, gold exposed stocks were up, as gold rose 0.4 per cent during trading. Perseus mining, Perenti Global, Evolution Mining and North Star Resources performed strongly, rising 6.2 per cent, 4.4 per cent, 5 per cent and 4.5 per cent, respectively.

The worst performer on the day was waste solutions company Cleanaway Waste Management, down 7.1 per cent. The fall follows reports of a "culture of bullying and harassment" perpetrated by the company chief executive.

Investment bank Macquarie, today warned the market that its first half 2021 profits would be 35 per cent lower than the previous comparable half, citing Covid-19 headwinds and an uncertain recovery. The stock was down 4.7 per cent.

Upcoming events

New Zealand

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Westpac is to release its third quarter, consumer survey results later today. These results will be interesting given the drop in and out of alert levels during this quarter.

International

Economic data out in the US tomorrow, includes the Industrial Production Index, the Capacity Utilisation Rate, Real Median Household Income and the Import Price Index.


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

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 Ltd 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.

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