AMC chief executive Christina Spade announced her departure from the company. Photo / Michael Kovac, The Hollywood Reporter, Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden.
International
US
Movement for American indices was muted at the time of writing, despite updates from Chinese officials. that there would be an easing of some Covid-19 restrictions. The S&P 500 and Dow Jones Industrial Index were down 0.3 and 0.2 per cent respectively.
Entertainment company AMC announced plans of significant layoffs within the business as chief executive Christina Spade departed the company,
Spade is to receive severance of more than US$10 million (NZ$16.1m). AMC Chairman James Dolan emphasised this was not taken lightly, and that they “will take every step possible to minimise the impact of these actions on our community”.
Management said it had expected gains from its streaming service would offset losses from cord cutting, but that “has not been the case.”
The Conference Board released the United States Consumer Confidence index for November, showing a decrease of two index points, a continuous decrease over October despite strong Black Friday sales in the United States, which were reported to be a record US$9.12 billion.
The recent rise in gas prices has been flagged, with consumers expecting the worst of inflation has yet to come due to gas and food price levels elevating constantly.
The Expectations Index (based on consumers’ short-term outlook for income, business, and labour market conditions) remains below 80, suggesting “the likelihood of a recession remains elevated” as intentions to purchase homes, automobiles and big ticket appliances were all cooling down.
The S&P CoreLogic Case-Shiller Home Price index for September showed a 10.6 per cent annual gain, down from 12.9 per cent the previous month.
By the Northern Hemisphere spring of 2023 (July to December), annual growth is expected to slow to 8 per cent. The United States 20 city price index, which aims to capture house values in 20 of the major cities in the United States, fell 1.2 percent, matching forecasts of economists that were expecting a 1.3 per cent decline and also the third consecutive monthly decline.
Rest of World
Markets in China and Hong Kong have shown a significant uptick today, with the Hang Seng ending up 5.2 per cent and the Shanghai Composite ending up 2.3 per cent as China’s health officials speak of plans to boost elderly vaccination rates and ease lockdown measures within reason.
They acknowledged that lockdowns should be lifted “as quickly as possible” following outbreaks, saying there needed to be “better zoning of high- and low-risk regions”, while defending their policy direction of zero Covid as still being a priority.
A new work plan has been introduced to increase national vaccination rates with emphasis on the elderly. All this comes as China’s local infections decreased for the first time in a week, dipping to 38,421 from as high as 40,052 reported on Sunday.
Commodities
Commodities have shown a recovery, with investors given a refreshed hope of a China reopening in the pipeline. Oil has increased to just under US$84 per barrel, despite news that OPEC+ will stick to their current oil production policy to reduce this by two million barrels per day and said “we always remain ready to intervene” to balance supply and demand.
Australia
New Zealand-based Biotech company Aroa Biosurgery released its 1H23 results. While largely pre-guided at their latest quarterly update on 25 October, the company reaffirmed its guidance to FY23 revenue of NZ$62 to NZ$64 million, product gross margin of 84 per cent and normalised earnings before interest, tax and depreciation to breakeven.
1H23 revenue was reiterated at NZ$29.3 million, up 44 per cent compared to 1H22. Management have reported a cash balance of NZ$50.1 million and is debt free, commenting they are “poised to enter H2 FY23 with confidence”.
Petroleum exploration and production company Woodside Energy released guidance for 2023 ahead of its investor briefing to be held Thursday this week, providing a range of 180 to 190 million of barrels of oil equivalent, which showed downside below Visible Alpha Consensus of 189 million of barrels of oil equivalent.
Management explained this to be attributable to a four week planned shutdown at their Pluto LNG field, the Sangomar field development now expected late 2023 thus no production factored in and Mad Dog phase 2 to assume no production until mid-2023.
Capital expenditure was also forecasted for 2023 at a range of AU$6.0 to AU$6.5 billion compared to the Visible Alpha consensus of AU$5.7 billion. On market open the shares saw a drop as low as 4.7 per cent but recovered steadily throughout the day to end 0.4 per cent down from opening.
New Zealand
Appliance manufacturer Fisher & Paykel Healthcare shares gained 10 per cent on close after it produced 1H23 revenues and profitability ahead of guidance, even though lower than the previous year’s figures by 57 per cent and 23 per cent respectively.
Revenue came in at $690.6 million, ahead of the $670.0 million forecasted in August by management, attributable to the hospital product group, which was up 24 per cent on 1H20 due to continued demand from hospitals - even after overstocking on equipment for the Omicron wave which proved to be less severe than expected.
Despite rolling off the Covid boom where 10 years’ worth of equipment was sold in two years, F&P Healthcare chief executive Lewis Gradon flagged on an investor call that management looks to maintain growth rather than to accelerate it.
Management decided not to provide any hard full year guidance figures but said revenue in the 2H23 will be higher than the $690.6 million figure produced.
Among the many results, software company Gentrack showed the highest gain on its share price of 18.3 per cent on announcing their result in-line with market expectations and shared their plans to go global going into FY24.
Revenue for the year came in at $108.2 million, of which utilities was up 22 per cent over the previous on deeper relationships and new customer wins and airport revenue up 7.9 per cent as travel activity has reopened.
Earnings before interest, tax and depreciation were $8.1 million, in-line with guidance and a show of resilience against a backdrop of customers in the United Kingdom’s business-to-consumer energy market going insolvent.
Management upgraded FY24 revenue guidance to $150 million, up 15 per cent and an earnings before interest, tax and depreciation margin ranges of 12.0 to 17.0 per cent for its utilities software and 15.0 to 20.0 per cent for their Airport software Veovo.
An incremental spend of $3 million each year will be required to fulfil these global growth ambitions for at least two years, which will mostly be spent on marketing and sales.
Coming up today
A break in the November reporting season, with no expected results for NZX 50 listed equities. However, markets anticipate the release of data relating to key indicators of the economy. This includes building permits issued in October and ANZ’s business confidence survey for November, expected this morning.
In Australia, further AGMs and company updates are set to come throughout the day – including of fund administration services company Link Administration Holdings, and mining company Sandfire Resources.
Rio Tinto is also holding an investor seminar in London tonight at 7.00pm AEDT.
Building approvals and private sector credit statistics for September are also expected to be released from the Australian Bureau of Statistics.
All market pricing and announcements are sourced from Refinitiv, NZX and ASX.
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NZ GDP falls 1% in September quarter; analysts expected 0.4% decline.