Jarden Brief: Strong growth in India boosts Twitter shares

Twitter shares have risen after the company reported a big rise in users in India. Photo / File

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

New Zealand:

The NZX 50 fell 1.2 per cent yesterday amidst a volatile reporting season.

Shares in dairy exporter A2 Milk crumbled after its first half result yesterday, dropping 16.1 per cent after investors turned increasingly bearish on A2's growth prospects. Revenue was down 16 per cent compared to last year, with EBITDA of $179 million down 32 per cent with a margin of 26.4 per cent achieved. Although, sales for the full year are expected to remain at $1.4 billion, margin guidance of 24 to 26 per cent were significantly below market expectations.

Meanwhile, Air New Zealand's result seemed in line with market expectations. The share price moved up 1.3 per cent after the company reported a $185m underlying loss, on heavily cut revenue of $1,234m (-59 per cent compared to first half 2020). Our national airline said that it had around $720m left in available liquidity, consisting of $170m cash and a remaining $550m available on its government loan. No news around outlook or the upcoming capital raise was discussed, which was likely disappointing for those betting on a volatile trading session post announcement.

Honey producer Comvita reported an improved first half result, growing most of its key financial metrics. Revenue was up 5 per cent on the first half of 2020, and gross margin improved by 10.8 per cent. Management guided full year ebitda of $20m to $23m, with a dividend expected to resume at the full year result.

Genesis Energy lifted their ebitda by $50m to $217m, on top of upgrading their EBITDA guidance by $15m at the midpoint to a range of $415 to $425m. A dividend of 8.6 cents per share may also have been pleasing to investors, a slight uplift from its previous interim dividend of 8.525 cents per share.

INTERNATIONAL MARKETS:
United States:

At the time of writing the S&P 500 was down 1.5 per cent. The Dow Jones was down 1.2 per cent, and the Nasdaq was down 2.2 per cent as the rotation out of tech companies continued.

Social media company Twitter was the best performer, up 6.4 per cent on a day when tech companies were generally down. The gain was driven by the company's investor day, at which attendees learned that daily average users in India had grown 74 per cent; revenue was forecast to double by 2023; the offering of followable topics would be expanding; and the company was promising to be more transparent to regain trust following accusations of censorship.

Retailer Best Buy was the worst performer, down 10.3 per cent. The company released fourth quarter results that disappointed the market. Revenue of US$16.4b was short of consensus estimates of US$17.2b. The company also conceded it had lowered its sales growth forecasts from 3 per cent to 1 per cent per annum.

Asia:

At time of writing, the Shenzhen index was down 0.5 per cent and the Shanghai index was up 0.5 per cent.

China has hit back on a Biden-initiated strategic review of America's goods buying processes and partners. The order covers chips, large capacity batteries, pharmaceuticals and strategic materials.

Chinese Foreign Ministry spokesman Zhao Lijian says that attempts to decouple supply chains are "artificial" and will "harm global trade". While the order does not directly implicate China, white house officials have said that overreliance on Beijing is a strategic risk that needs to be addressed.

Commodities:

At time of writing, gold was down 1.5 per cent to US$1,774.9 per ounce. Bitcoin was up 2.6 per cent to US$50,000, while Ethereum was up 0.6 per cent to US$1,600.

WTI Crude oil was up 0.3 per cent to US$63.4 per barrel. US 10-year treasury yields were up 9.4 basis points to 1.476 per cent.

Australian Markets:

The ASX 200 rebounded 0.8 per cent yesterday, led by a rebound in early Covid recovery stocks.

Reopening themed travel stocks fared well – with Flight Centre gaining 8.9 per cent, Webjet up 4.4 per cent and Santos up 3 per cent.

Meanwhile, Sandfire Resources (+11.1 per cent), Nanosonics (+9.5 per cent) and Clinuvel (+9.2 per cent) top the market gainers list. Fortescue Metals was also strong, up 3.1 per cent to A$25.24.

Buy now pay later giant Afterpay recorded a 108 per cent increase in its revenue to A$374.2m compared to the prior corresponding period, although late fees were up 7 per cent to A$35.1m.

The company noted it would be increasing its stake in AfterPay US from 80 per cent to 93 per cent, with the intention to fully own the underlying interest in future.

Afterpay will be issuing A$1.25b in zero coupon convertible notes to fund this, with the potential to accept up to A$1.5b in bids.

Afterpay's competitor Zip Co chose to report their results yesterday as well, although some information was a rehash of figures already released in January. Revenue was up 131 per cent to A$160m, while EBITDA loss came in at -$14.8m. Total customers tripled to 3.2 million, with losses trending down over time. Zip Co traded down 7.7 per cent.

• 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