China stands accused of engaging in a cultural genocide against the Uyghur Muslim peoples in the Xinjiang region. Photo / Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand:
The NZX closed down 0.3 per cent yesterday.
Sector performance was mixed with reporting season well underway. Large-cap stocks Fletcher Building and Ebos filed results yesterday, alongside smaller sized companies NZX and Refining NZ.
The market was led down by a 3.1 per cent fall in Air New Zealand, which traded on high volumes. Retirement village operator Oceania Healthcare (-2.6 per cent) and Kathmandu (-2.2 per cent) rounded out the worst performers. Meanwhile, Refining NZ (+6.1 per cent) rose after a delayed reaction to yesterday's positive result.
The entire board of NZX-listed QEX logistics has resigned, with shares in the stock now suspended for breach of NZX board composition requirements. The outgoing directors have cited disagreements with CEO and majority shareholder Ronnie Xue. QEX has announced it has begun a process to urgently appoint replacement directors. This debacle makes for another black mark in the company's recent history.
The company announced it had lost $4.3m of inventory in October last year, which led to it breaching its debt covenants with Westpac. Auditors Deloitte then resigned without explanation or notice last week. QEX listed in February 2018 and had a market cap of $82 million at its peak.
A second day of reporting saw SkyCity Entertainment, agriculture hardware manufacturer Skellerup and Auckland International Airport report their results.
SkyCity had a seemingly mixed result, with big drops in ebitda and profit recorded in line with expectations. Underlying earnings were down 42 per cent on last year's first half to $44 million, while underlying ebitda fell 22 per cent to $120 million. On a less pleasing note, net debt rose to $587 million, up from $541 million at the end of FY20.
Skellerup on the other hand, gave a strong showing – with ebit up 53 per cent on last year to $27.6 million, and profit up an impressive 61 per cent to $19.5 million.
Auckland International Airport's results and commentary were uneventful, given our borders do not seem at risk of reopening. A loss of $11 million for the half, and a projected loss of between $35 million to $55 million for the full year was in the quantum of market expectations.
INTERNATIONAL MARKETS:
US:
At the time of writing the S&P 500 was down 0.8 per cent. The Dow Jones was down 0.7 per cent and the Nasdaq was down 1.2 per cent as the technology sector underperformed the market.
The best performer on the day was electricity distributor and transmitter First Energy corp, up 8.8 per cent. The company reported its fourth-quarter results, with detail given for the whole year's performance. Earnings per share in 2020 were $2.39. Proactive steps were taken to resolve regulatory proceedings against the Ohio attorney general. A guidance range of US$2.40 – 2.60 was given for operating (non-GAAP) earnings per share – greater than the US$2.39 reported this year.
Vehicle parts distributor LKQ corp (up 4.5 per cent) and food and beverage company Kraft Heinz (up 4.6 per cent) rounded out the top performers.
Shipping software developer Westinghouse Air Brake Technologies (down 10.0 per cent), chemical manufacturer Albemarle (down 9.5 per cent) and potash producer Moasic (down 8.5 per cent) made up the worst performers on the day.
Asia:
At time of writing, the Shenzhen index was down 1.2 per cent and the Shanghai index was up 0.6 per cent.
The US house of representatives has reintroduced a bill that would ban imports from the Xinjiang region in China – where China stands accused of engaging in a cultural genocide against the Uyghur Muslim peoples. The bill would also permit the president to place sanctions against anyone responsible for labour trafficking in the region.
Twitter replicant and "micro-blogging" service Weibo has announced plans to list on the Hong Kong stock exchange. Weibo joins a growing group of companies seeking access to the financial hub. Other 'homecoming' listings planned for this year include music streaming service Tencent Music Entertainment, search engine Baidu and car-trading site operator Autohome Inc.
Commodities:
Gold recovered marginally yesterday and essentially traded flat overnight, five basis points to US$1776.0 per ounce. Bitcoin was down 0.8 per cent to US$51,998 while Ethereum was up 3.4 per cent, marginally narrowing the spread that has been trending wider. WTI Crude oil was up 0.2 per cent to US$61.05 per barrel. US 10 year treasury yields were up fractionally to 1.287 per cent.
Australian Markets:
Headlines were dominated by Facebook's surprise move to ban all viewing or sharing of news in Australia, removing news articles from the feeds of all Australian users as well as from corporate accounts operated by Australian news networks. The US social media giant has made the move in response to a proposed media-bargaining law, which would force Facebook to pay for content posted to its site.
Facebook argues that the legislation "fundamentally misunderstands the relationship between our platform and publishers who use it to share our content". The move comes at an interesting time - with Google having recently announced a $30m deal with Nine to distribute its content.
The ASX 200 was up 0.7 per cent, carried by strong performances from healthcare giant CSL (+2.8 per cent), as well as index heavyweights from the banking sector Westpac (+3.5 per cent) and ANZ (+2.8 per cent).
CSL jumped after reporting its fastest profit and revenue growth in recent years, despite a challenging first half – with its flu business driving strong performance across the group. Net profit shot up by 45 per cent to A$2.3 billion for the half, while revenue was up 16.9 per cent.
At the same time, ANZ reported a cash profit of $1.8 billion, up 54 per cent year on year – albeit from an especially poor base period. Net interest margin was up 5 basis points to 162 basis points, compared to consensus estimates that it would come in lower at 154.5 basis points.
Meanwhile, supermarket operator Coles dropped 5.6 per cent after it warned of a pessimistic industry outlook the day before. Crown Resorts was also an underperformer, up 0.4 per cent after its first-half revenue of A$581m was down 62 per cent from the first half of 2020.
Treasury Wine Estates grew another 17.5 per cent after a less daunting result yesterday drove a smaller rally.
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Disclaimer: 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 Limited 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. Full disclaimer available at: https://www.jarden.co.nz/limitations-and-disclaimer
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