Stock Takes: Rally wipes out China losses

The S&P/NZX 50, which closed up 0.1 per cent last night at a new record of 6002.4, has now gained roughly 8 per cent in the year to date. Photo / Supplied

Dream run ends with plenty still in reserve.

The sharemarket's October dream run came to an end on Wednesday.

The S&P/NZX 50 held its ground for most of the trading session, before dipping slightly into the red just before market close, scuttling what would have been its 13th straight day of gains. Still, this month's rally has more than erased the losses suffered during the China-linked turmoil that enveloped markets through August into early September.

The S&P/NZX 50, which closed up 0.1 per cent last night at a new record of 6002.4, has now gained roughly 8 per cent in the year to date.

If sentiment holds up, it's not too much of a stretch to imagine the local market notching up another year of double-digit gains, which was looking highly unlikely a couple of months ago.

Where to from here?

Maybe the bull market has some time to run yet.

There are, however, a few factors that could spark another bout of volatility, including the economic situation in China, the commodity price slump and the outlook for US interest rates. The US Federal Reserve held rates steady this week but it's looking increasingly likely that they'll lift them for the first time since 2006 in December.

On the plus side, the European Central Bank is dropping hints of providing more monetary stimulus for the eurozone economy.

In a research note published last week, Auckland fund manager Castle Point said markets had reached a crossroad and it was difficult to predict where they may go from here.

"Historically, market corrections take three months on average so we are possibly only halfway through this one. While it may be difficult to pick whether or not we are at the end of the bull market, any further highs from here are firmly in bubble territory."

Castle Point notes that investors should be considering downside risk to their portfolios in the current environment.

Buy and sell

A secondary market for trading shares in equity crowdfunded firms should soon be up and running.

Syndex, an exchange for proportionally owned assets, is looking to establish a market for buying and selling shares in companies that have raised money through the Equitise crowdfunding platform. It's a significant development for the nascent equity crowdfunding market because, as things stand, it's difficult for investors to get in or out of crowdfunded firms after the initial issue.

Equitise co-founder Jonny Wilkinson told Stock Takes that the timing of the secondary market's launch was dependent on Syndex receiving a licence from the Financial Markets Authority (FMA) to operate as a licensed financial products market.

He said that should happen within the next few months.

Wilkinson said there would be a short period where Equitise would have an exclusive right to Syndex's platform, but after that ended other crowdfunding platforms would also be able to access the secondary market.

AlphaCrowd, New Zealand's eighth licensed crowdfunding provider, received the green light from the FMA a week ago.

New Warehouse boss has big task Downunder

Incoming Warehouse Group chief executive Nick Grayston.

The shift from Chicago to Auckland will be a big move for incoming chief executive of The Warehouse Group, Nick Grayston. But a fews things about New Zealand's biggest listed retailer should make him feel at home.

Since 2008 Grayston has held various executive roles with US retailer Sears Holdings, the operator of Kmart and Sears stores.

Like The Warehouse, Sears has taken a beating from the ever-increasing dominance of online retailing and has been accused of losing touch with 21st century American shoppers.

Even the star appeal of the Kardashians has failed to improve the retailer's fortunes. In an attempt to reconnect with younger consumers, Sears launched a footwear and apparel collaboration with reality TV stars the Kardashians, and their Kardashian Kollection. However, it was dropped earlier this year, reportedly as a result of lacklustre sales.

Nick Grayston worked with Sears, whose Kardashian Kollection backfired.

English-born Grayston will replace Warehouse boss Mark Powell early next year. On Tuesday, chairman Ted van Arkel said Grayston had the experience to take The Warehouse "to the next level". Warehouse shares closed down 1c at $2.79 last night.