Coronavirus took its toll on fast-food outlets, but sales are returning. Photo / Michael Craig
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
NZX Market Wrap The NZX 50 Index was up 0.2 per cent, with lots of volume in Sylvia Park owner Kiwi Property Group, up slightly to $1.06 per share. Other real estate investment trust stocks also rose, with Asset Plus leading the pack up 4.2 per cent.
Marketing tech specialist Plexure announced it is looking at changing its primary listing to the ASX. Shares rose 9.1 per cent in response on heightened volumes compared to normal.
AFT Pharmaceutical expressedits approval of Medsafe's move to reclassify medicine containing codeine as prescription-only.
The move will likely benefit the sales growth for AFT's pain-relief alternative Maxigesic. Precedent supports this forecast - in the 12 months after Australia's regulator made the same move, Maxigesic sales increased 50 per cent. AFT shares closed up 4.4 per cent in response.
Restaurant Brands, which owns the franchise rights to KFC, Pizza Hut, Carls Jr and Taco Bell, has provided an update on their second quarter performance to June 30. Total quarterly sales were down 11 per cent to $183.3 million compared to 2019, as expected after Covid-19.
New Zealand's sales suffered the worst, down 28.8 per cent to $76.6 million. All stores were closed during Level 4 lockdown from March 25 to April 28, with restrictions on in-store dining for a further two weeks.
Interestingly, better-than-expected sales in the US and Australia saved the company from suffering an even greater loss. Australian sales were flat at just -0.6 per cent (NZ$48.8 million), as a result of comparatively lighter restrictions across the Tasman during the quarter. US sales grew by 8.0 per cent to NZ$109.7m, with Pizza Hut's new online ordering and delivery functions benefitting the brand.
The negative year-on-year figures may appear an adverse catalyst for the stock, but it is important to consider any decline which the market had already priced in.
During a shareholder's meeting on May 28, Restaurant Brand's CEO had indicated that the NZ division had recorded a downturn in sales by nearly $45 million at the time, and that Australia had lost more than A$6 million. Given the reported second quarter sales are not as bad, this could imply a rebound in NZ/Aus sales last month.
International markets
At the time of writing, Chinese markets continued their bull rally, with Shenzhen and Shanghai up 3.12 per cent and 2.06 per cent respectively.
Risk assets in America were also positive today amid the Federal Reserve's announcement and earnings for large tech companies.
At the time of writing the Dow Jones was up 0.53 per cent, the S&P500 was up 1.18 per cent and the Nasdaq was up 1.43 per cent.
This week the Fed announced that the unemployment benefit will not be completely stopped but will be lowered significantly, with caps being created by each individual state.
Positive trade data out this morning showed a decline of 6.1 per cent in the US trade deficit as exports increased faster than imports. This is a move in the right direction for the country, but the numbers are still dire on historic levels, as exports are 25 per cent lower and imports are 17 per cent lower YTD.
In after-market hours yesterday, Visa Inc reported earnings roughly in line with estimates, with earnings per share of US$1.07 and revenue of US$4.84 billion. The stock fell over 2 per cent in after-hours indicating investors had been valuing in a slightly better update in growth perspectives and company recovery during Covid-19.
Eastman Kodak has skyrocketed over the past few days on the news that they received a US$765 million loan from the government to make drug ingredients for Covid-19 vaccines.
The share at the time of writing is at US$45.50, a whopping 1650 per cent higher than its price of US$2.62 on July 28. The surge has been caused by US retail trader Robinhood, as the stock has been added by over 47,000 people over the past two days.
Shopify (+7.50 per cent) destroyed earnings forecasts this morning with revenue up 97 per cent to US$714 million, US$200 million above expectations. New customers were up over 71 per cent, leading to earnings per share to be US$1.05 compared to US$0.10 expected. The company has now solidified itself in the market with many analysts renewing forecasts and with the company beginning to invest heavily in a distribution centre. It may be looking to take on giant Amazon in the future.
At the time of writing WTI Oil was up 0.6 per cent to US$41.30 per barrel, while gold was also up 0.80 per cent to US$1960 per ounce. The US 10-year Treasury yield is the same as yesterday at 0.58 per cent.
ASX Market Wrap
The S&P/ASX200 Index is edging downward, closing yesterday 0.2 per cent lower at 6006.4 points.
The leading sectors were utilities, rising 1.2 per cent, and Financials, up 0.9 per cent. The laggards were Materials and Energy, dragging the index down 1.7 and 1.6 per cent respectively.
Automotive retail firm AP Eagers performed strongly, rising 13.3 per cent to A$7.99, while Financial Product group McMillan Shakespeare rose 3.3 per cent to A$9.29.
Mining company IGO Limited produced a somewhat disappointing quarterly update as it plummeted 13.2 per cent to A$4.80. Gold miner St Barbara also fell (7.6 per cent), following softer guidance and sector trends, to A$3.51. The big four banks performed well, rising over 1 per cent each, with ANZ topping the lot as it climbed 2.1 per cent to A$18.45.
CPI data released yesterday showed annual deflation occurring for the first time this century, as inflation fell to -0.3 per cent. The June quarter fell -1.9 per cent, the largest quarterly fall since 1948 when records began. Deflation is likely driven by falling rents, lower consumer prices, government-funded free childcare and falling petrol prices. With less immigration, causing an oversupply of apartments, rents are likely to continue to push downward.
New Zealand
Logistics companies, blue chip Mainfreight and tech-growth stock EROAD, are holding their annual general meetings today.
During these livestreamed meetings, the board of each company will update investors, field questions and take votes on certain matters. Equity analysts often listen in on discussions in case anything material is mentioned, so it may pay to keep an eye out from any price movements during the day.
On the macro-economic side, ANZ Business Confidence is also set to be released, which financial analysts can use to estimate how much private firms are planning to invest in capital projects going forward.
Australia
Building company, Cimic Group releases its financial year 2020 result today. Gold mining company OceanaGold and iron ore producers Fortescue Metals also release their results today.
International
The Fed will today announce a variety of stimulus packages, which will affect the speed of the economic recovery.
Tomorrow is an important day with US GDP data out, which will demonstrate the full force that Covid-19 has had on the country, along with initial and continuing jobless claims for July.
There will be heavy reporting volume over the next few days; today in afterhours, Facebook and General Motors Co will report. Tomorrow is a star-studded line-up with Apple, Amazon, Alphabet (Google), Ford, Gilead Sciences, Mastercard and Proctor and Gamble reporting. Many analysts believe the stock prices of Amazon and Apple have priced in earnings, therefore, if earnings expectations are missed, both companies could see a sell-off tomorrow.
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- NZ Herald
NZ GDP falls 1% in September quarter; analysts expected 0.4% decline.