Jarden Brief: Opioid crisis lands chemist chain, retailers with billion-dollar fine

A federal judge awarded (NZ$1.04 billion) in damages to counties that sued CVS, Walgreens and Walmart over the way the national pharmacy chains distributed opioids to their communities. Photo / AP

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

International

US

All major US indices were mixed at the time of writing. The S&P 500 ticked up by 0.1 per cent, the Nasdaq increased 0.1 per cent while the Dow Jones Industrial Average fell 0.2 per cent.

Sectors were mixed with seven of 11 in the green. Energy surged 2.5 per cent, technology gained 0.6 per cent and materials was up 0.3 per cent.

Conversely, real estate dropped 1.1 per cent, health was down 0.7 per cent and financials dipped 0.3 per cent.

ON Semiconductor was the top performer, rising 8.6 per cent to hit a new 52-week high.

Energy explorer, developer and producer APA Corporation was up 7.0 per cent likely due to the rising oil price.

Cisco Systems rounded out the out performers with a gain of 5.9 per cent. This comes after the networking equipment producer reported quarterly earnings of 83 cents (US) per share and revenue of US$13.1 billion which beat expectations.

On the flip side, pharmaceutical chain Walgreens Boots Alliance was the biggest underperformer, dropping 6.0 per cent after being ordered by a federal judge, along with CVS Health (-1.5 per cent) and Walmart (-0.3 per cent), to pay a combined US$650.6 (NZ$1.04 billion) million to two Ohio counties to address damage done by the opioid crisis.

Walgreens also announced on Wednesday the sale of 11 million shares of Option Care Health in an underwritten secondary offering which decreases Walgreens ownership from 20.5 per cent to 14.4 per cent.

Biotechnology company Moderna lost 5.4 per cent, while real estate investment trust Ventas rounded out the laggards with a decline of 3.1 per cent.

Rest of the World

Asian markets were in the red overnight. The Shanghai Composite decreased 0.5 per cent, the Nikkei dropped 1.0 per cent, and the Hang Seng fell 0.8 per cent.

European markets were in the green. The FTSE rose 0.4 per cent, the DAX was up 0.5 per cent and the CAC gained 0.5 per cent.

Commodities

Gold traded 0.3 per cent lower to US$1771.60 per ounce, while silver dropped 1.4 per cent to US$19.46 per ounce.

Oil performed well, gaining 3.6 per cent to US$91.26 per barrel.

The cryptocurrency market was mixed, with Bitcoin decreasing 0.1 per cent while Ethereum rose 1.3 per cent.

The US 10-Year Treasury rate declined one basis point to 2.888 per cent alongside a one basis point decrease in the 30-year rate, to 3.137 per cent.

New Zealand

The NZX 50 closed in the red yesterday, for the first time this week, down 0.3 per cent – potentially the result of global pressure in such uncertain times.

Leading the single stock performers was Restaurants Brands, up 3.3 per cent. Next in line was Tourism Holdings, which increased 2.7 per cent. Telecommunications company Spark NZ also rose 2.3 per cent yesterday.

Contrarily, Eroad had another volatile day, falling 4.0 per cent – the fleet management company has dropped 11.5 cent this week. Retirement village operator Summerset Group traded 2.6 per cent lower yesterday. Joining the bottom movers was network courier services company Freightways, down 2.1 per cent.

Auckland Airport, Skellerup and Precinct Properties all posted their full-year financial results yesterday.

Despite the airline hub reporting a profit of $191.6 million in the year ended June, shares in Auckland Airport dropped 1.3 per cent by the end of the day. Investors seemed to be processing profit guidance for the 2023 financial year, which was lower than some had anticipated.

Skellerup (+1.7 per cent) provided the market with positive news, lifting annual net profit by 19 per cent to $47.8 million - an all-time high for the manufacturing company.

Chief executive David Mair noted the improved performance was the result of the company's "unwavering focus on working closely with key customers", to provide products used in everyday applications.

Real estate company Precinct Properties (-1.7 per cent) reported a 29 per cent fall in net profit after tax to $108.8 million, compared to last year. After handing out $8.3 million rent relief to retailers during the pandemic restrictions, the retail property group's lease income improved marginally to $126.1 million for the year to 30 June.

Investors await news on the New Zealand trade balance and credit card spending, which is expected today.

Australia

The ASX 200 finished lower yesterday, dropping 0.2 per cent to 7,112.8 points. The index remains up 0.6 per cent across the past five days.

Eight of the 11 sectors closed in the red, led by information technology, down 2.4 per cent. Followed by utilities and consumer discretionary, regressing 1.6 and 1.3 per cent, respectively. Conversely, energy and healthcare were the top performing sectors, each lifting 1.4 and 1.1 per cent.

Intellectual property group IPH was the index's best performer, improving 16.0 per cent yesterday, up 16.3 per cent year to date. The company released their 2022 full year results, posting a 14.0 per cent rise in underlying net profit to A$86.7 million.

Further, IPH announced an agreement to acquire Canadian intellectual property firm Smart & Biggar for A$387 million. This decision will allow the company's network to expand beyond the Asia Pacific region.

Payment's solution company Tyro payments also performed well, advancing 9.1 per cent. The company will release its 2022 full year results on 24 August.

Rounding out the top movers was Treasury Wine Estates, increasing 4.0 per cent following the release of their 2022 full year results. Net profit after tax was up 5.3 per cent to A$263.2 million despite a 5.7 per cent drop in revenue to A$2.53 billion. The final dividend also rose from 13 cents to 16 cents.

Vitamins and supplements company Blackmores was the biggest underperformer, reducing 10.1 per cent yesterday, taking it down 19.8 per cent year to date.

The company posted inclines in both profit and revenue; however, investors might be responding to its warning about rising costs and supply chain issues.

Electronics solutions company Codan also underperformed, falling 9.8 per cent, now 14.7 per cent lower year to date. This negative performance was despite of record 2022 full year results, posting A$100.5 million in underlying profit after tax, a 3.0 per cent improvement from the previous year.

Closing out the bottom movers was gold and mineral exploration company Regis Resources, dropping 8.5 per cent to 17.4 per cent down year to date. The company is releasing their 2022 full year results on 25 August.

The Australian Bureau of Statistics announced that the unemployment rate softened to 3.4 per cent in July. This is the lowest level in 48 years since 1974.

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

Jarden is advising Tourism Holdings Limited on an agreement to merge with Apollo Tourism and Leisure Limited.

Jarden is advising on the acquisition of Spark New Zealand Ltd's TowerCo business by the Ontario Teachers' Pension Plan Board.

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

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