Dairy giant will update market today. Photo / John Stone
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
NZX market wrap
Eroad remained in halt after it finally broke its silence on its rumoured ASX listing, launching a NZ$50 million capital raise and listing on the ASX. The raise comprises a $42 million placement to institutional holders at $3.90 a share, representing a 10.3 per cent discount to last close of $4.35, and an 8 million share purchase plan to existing shareholders.
The latter will allow existing investors to buy new shares in the company at the lower of $3.90 or a 2.5 per cent discount to the 5-day volume weighted average price when the offer closes.
Heartland Bank impressed the market with a resilient result, as it rose 5.9 per cent after it reported a net profit of $72 million (underlying npat $70.5m).
The company provided FY21 guidance ofZ$83m-$85m. This expected growth reflects management's expectation of continued growth of motor, business and reverse mortgage businesses in New Zealand. This, alongside further growth in Australia, is anticipated on the back of expansion in Reverse Mortgages, SME, and Consumer activities.
Dairy giant Fonterra, one of New Zealand's largest companies, is set to report its full-year result today. Fonterra last reported a solid performance for its third quarter, posting 9-month normalised ebit of $815m with all three of its main businesses iIngredients, food service and consumer) posting substantial gains.
The company also reaffirmed its earlier forecast, expecting underlying earnings to be between 15 to 25 cents per share. At present, analyst consensus expects profit to be around $407m, and ebit to be around $827m.
Tourism Holdings will also post full-year earnings today, a stock that has reacted with volatility throughout the Covid-19 period because of its exposure to hard-hit tourism.
Tourism Holdings gave an update on Monday, expecting underlying profit to be approximately $20 million - a beat on its prior guidance. It's net debt as at June 30 was also confirmed to be $128 million.
The Asian markets were all lower overnight, with soft demand and low volume. The Shanghai Index was down 0.4 per cent and the Shenzhen Index was flat. This is despite economists announcing they believe China may be able to produce positive economic growth for the last period of 2020.
The US markets continued this movement, with all indices in the red. At the time of writing, the Dow Jones was down 0.7 per cent, S&P 500 was down 1.2 per cent, and the Nasdaq was down 1.7 per cent.
Further damage to the American economy is being caused by the raging Californian bush fires with more than 1.3 million hectares burned and more than 4200 structures destroyed, leaving many without jobs. Many suggesting the length and power of the season is in direct correlation with climate change. US president Donald Trump continues to say it is down to poor forest management.
Despite the bushfires becoming the norm in California when temperatures rise, the pairing with Covid-19 makes relief bills harder to structure, which could factor into the recovery of the economy.
Initial jobless claims in the US beat Wall Street estimates today, decreasing to 860,000 with 875,000 being expected. Continuous claims also decreased by 916,000 to just over 12.6m.
US homebuilding fell 5.1 per cent in August after strong gains in the previous three months. Despite this, the numbers remain elevated, supported by low interest rates, with confidence in single-family housing rising in September surveys.
The second quarter US current account deficit is to be announced tomorrow.
WTI Oil is up another 2.2 per cent with refreshed outlooks as inventories decrease and Asia demand recovering quicker than expected. Gold retreated its gains for the week down 0.9 per cent to US$1951 per ounce. The US 10-year Treasury yield recovers its earlier decline to be flat for the day.
Australia's employment data for August was positive despite Victoria's second lockdown, with 111,000 jobs gained and unemployment falling from 7.5 to 6.8 per cent. The numbers demonstrate the resiliency of the Australian economy, surprising analysts who expected unemployment to rise to 7.7 per cent.
The ASX 200 finished the day down 1.2 per cent amid disappointment at the lack of new policy announced after the conclusion of the Federal Reserve's FOMC meeting. All peer indices were down with the Midcap 50 and the Small Ordinaries indices marginally underperforming.
Energy was the only industry up on the day, gaining 0.1 per cent. Basic materials and telecommunications were the worst performers, falling 2.5 and 2 per cent, respectively.
The best individual performer on the day was dual-listed New Zealand's Fletcher Building, which gained 3 per cent. Oil producer Beach Energy was up 1.8 per cent after oil futures rose more than 4 per cent overnight.
The worst performing company in the index was mining services company Mineral Resources, down 9.4 per cent. Recent outperforming coal producers Whitehaven Coal and New Hope Corporation continued to sell-off, losing 5.5 and 5.2 per cent, respectively.
The buy now, pay later sector sold off after tech sales in overnight markets. Sector leader Afterpay was down 5.4 per cent. BNPL sector participants Splitit and QuickFee yesterday announced their intention to enter a partnership to expand into the US market. The nominally positive news caused Splitit to be flat on a day where the rest of the sector was significantly down. QuickFee did not trade, having announced its intention to raise A$17.5 million of capital.
• For more information on the latest market moves, get in touch with Jarden.
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
Private equity is seen as a likely buyer for Fonterra's consumer business.