Jarden Brief: NZ experiences net migration loss of 3900 people

This is the first net migration loss since 2012. Photo / Getty Images

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

New Zealand

The NZX 50 lost a slim 0.1 per cent yesterday.

Sky Network Television fell 3.1 per cent and Ryman Healthcare lost 2.1 per cent.

Westpac Banking Corporation eased off from Monday's 4.7 per cent gain, down 2.4 per cent. This week Westpac completed an off-market share buy-back.

On the flip side, the top performer yesterday was Pacific Edge, rising 2.9 per cent. The cancer diagnostics company has experienced an 18 per cent share price decline year to date.

SkyCity Entertainment Group increased 2.8 per cent, recovering some ground following market reaction to its first half financial year 2022 result on Monday. Air New Zealand gained 1.9 per cent.

The latest Real Estate Institute of New Zealand residential property data showed a decrease in sales of 28.6 per cent in January 2022, from 5,135 in January 2021 to 3,665. Sales also declined 1.5 per cent month on month in January, while seasonally adjusted house sales declined 5.3 per cent month on month - indicating an easing of house price pressure.

New Zealand experienced a provisional net migration loss of 3,900 people throughout 2021, compared to a net gain of 36,800 in 2020, according to Stats NZ. This is the first loss since 2012. Stats NZ outlined that net migration losses were historically driven by New Zealand citizens going overseas. However, Covid impacts have reversed this pattern as current net migration losses are driven by non-New Zealand citizens departing.

New Zealand moved to Phase 2 of the Omicron response plan yesterday.

International
US

The three major US indices were all trading in the green at the time of writing. The S&P 500 rose 1.4 per cent, the Dow Jones Industrial Average was up 1.2 per cent, and the NASDAQ increased 2.0 per cent. This upward move was likely due to news about Russia saying they had begun pulling back troops from the Ukraine border. The NATO, however, was still calling for caution about the potential threat.

The only two sectors underperforming this morning were energy (-1.6 per cent) and utilities (-0.1 per cent). All other sectors were trading higher, led by technology and consumer discretionary, each rising 2.1 and 1.9 per cent.

The single stock best performer on the S&P 500 this morning was semiconductor company Monolithic Power Systems, increasing 8.4 per cent. The US based Semiconductor Industry Association released numbers on global production for 2021 on Monday. Those numbers showed that semiconductor sales topped US$555 billion, which is a 26.2 per cent increase year on year.

Due to high demand, semiconductor companies ramped up production. Manufacturers will be watching how much more production these producers can take on, as demand is expected to rise significantly over the next few years. The global chip shortage is already impacting many companies, especially car manufacturers.

Nvidia also performed well, rising 7.7 per cent. The artificial intelligence computing company is scheduled to release its fourth quarter 2021 results after US market close on Wednesday.

Rounding out the top performers was Arista Networks, up 7.6 per cent. The cloud networking solutions provider reported better than expected fourth quarter results, coming in at 82 cents per share, nine cents ahead of estimates. The company also issued an upbeat forecast which seemed to be of liking to investors.

This morning there were a number of travel stocks among the top performers, namely United Airlines (+6.3 per cent), American Airlines (+6.3 per cent), Expedia (+5.7 per cent), Carnival Corp (+5.5 per cent), and Norwegian Cruise Line Holdings (+5.3 per cent).

Leading the index lower at the time of writing was Fidelity National Information, decreasing 8.5 per cent. The company is a provider of technology solutions for merchants, banks, and capital market firms, and made its latest earnings announcement before market open. On the back of the announcement, the share price hit a 52-week low.

Next in line was IPG Photonics, trading 8.1 per cent lower. The fiber laser developer and manufacturer also hit a 52-week low after releasing its latest earnings.

The full service, early-stage contract research company Charles River Laboratories International also underperformed, declining 5.3 per cent.

Rest of the World

The major Asian indices were mixed overnight. The Shanghai Composite rose 0.5 per cent, the Nikkei traded 0.8 per cent lower, and the Hang Seng decreased 0.8 per cent.

On Tuesday, Hong Kong's current leader, Carrie Lam, imposed a citywide lockdown as daily Covid case numbers surged by 20 times over the last two weeks. The leader said the authorities are unable to keep up with testing and isolation mandates.

Commodities

Commodities took a turn in performance this morning. Gold declined by 0.8 per cent to US$1,853.90 per ounce, as investors were seemingly more interested in higher risk equities.

Oil dropped 3.6 per cent to US$92.02 per barrel, which could also be linked to the news about Russia potentially pulling back troops near the Ukrainian border.

Cryptocurrencies were all delivering a good performance, with Bitcoin rising 4.5 per cent to trade around the US$44,000 mark, and Ethereum increased 7.6 per cent to around US$3,100.

The US 10-year treasury rate was yielding 2.04 per cent at the time of writing.

Australia

Australian equities slipped 0.5 per cent during Tuesday's trading, as the ASX 200 finished at 7206.9 points.

Technology (+1.0 per cent) and real estate (+0.9 per cent) were the top performing sectors of the day. In contrast, energy (-3.1 per cent) and utilities (-1.9 per cent) weighed down the index.

Metal and electronics recycler Sims Ltd reported first half performance ahead of market expectations, with an earnings per share figure 15 per cent above consensus estimates. The result appeared to be well received by investors, driving Sims' share price up 13.7 per cent. The company also posted underlying EBIT of A$362 million, coming in well above the previously set guidance bands of A$310-350 million.

Other top performers included supply chain logistics company Brambles and human resourcing firm Seek, each closing higher by 6.2 and 6.1 per cent. Brambles traded higher on speculation reported in Australian media that private equity giant KKR & Co have been pondering a potential takeover bid in excess of $A15 billion, while Seek stock was also a benefactor of a strong set of earnings results.

Tuesday's underperforming stocks were led by oil and gas exploration company Beach Energy, which fell 10.4 per cent. This is despite the company being Monday's market leader (gaining 9.4 per cent at the beginning of the week on the back of promising earnings results). The market may have taken some time to digest Monday's earnings release, leading to some correction in share price.

Rounding off the underperformers were Chalice Mining and Mineral Resources, slumping to 9.5 and 5.6 per cent losses, likely trading with underlying commodity movements.

The Commonwealth Bank of Australia Card Spending data for the week ended 11 February showed a modest slow down after a run of strong increases. All states posted weaker spending data in the days leading up to 14 February (Valentine's Day).

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Disclaimer: The Jarden Brief is provided for general information purposes only. It reflects views and research available 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. The Jarden 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 financial advice disclosure statement is available free of charge at https://www.jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement/ Full disclaimer available at: https://www.jarden.co.nz/wealth-sales-and-research-disclaimer