Jarden Brief: Bitcoin climbs another 5 per cent

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

New Zealand

Yesterday was a particularly good session for larger stocks with the NZ10 up 1.2 per cent. Meanwhile, the NZ50 rose 0.9 per cent with the rise dominated by the top-performing sectors of healthcare (up 2 per cent), utilities (up 1.5 per cent) and industrials (up 0.9 per cent). The worst performing sectors were energy, down 1.8 per cent and consumer non-cyclicals falling another 1.1 per cent for the day.

Air New Zealand was the biggest gainer of the session advancing 3.5 per cent. Energy generator and retailer Contact Energy rose 3.2 per cent and Fisher and Paykel Healthcare increased 2.9 per cent.

Contact Energy announced yesterday the departure of Vena Crawley, Chief Customer Officer, who will leave the company in April.

The worst performing company yesterday was aquaculture company, Sanford, down 3.3 per cent. Agricultural product distributor, Scales Corporation, fell 3.1 per cent and oil and gas retailer, Z Energy, decreased 1.8 per cent.

Turners Automotive Group, an automotive financial services provider, rose 6.1 per cent yesterday. This followed an earnings upgrade for financial year 2021 of net profit before tax of at least $35 million. They also declared a third quarter dividend of 6 cents per share and confirmed projections of an 18 cents per share full year dividend. Investors responded well to this news with yesterday being Turners’ biggest intraday gain since January 2019.

Hospitality group, Savor Group, acquired Hipgroup’s assets for $11 million and announced a $6 million equity raise this week. Hipgroup’s portfolio of eateries includes Auckland’s Amano restaurant.

Goodman Property Trust, an investor in industrial and business property, signalled a half year gain of approximately $415 million for financial year 2020, ending on the 31 March 2021. The company attributed this to the current property landscape of high demand and limited supply for industrial properties and the macro economic conditions of relatively low interest rates which was driving investor demand. The company gained 0.5 per cent yesterday.

Meatworks are struggling to secure workers and are putting out the call with travel restricted for international workers and New Zealanders seeing the government-subsidised fruit picking industry as a more attractive option. This worker shortage is affecting the industry supply chain with some stock being turned away in the Hawke’s Bay due to lack of processing capacity. This points to a wider labour supply issue in New Zealand, particularly among agriculture and horticulture.

INTERNATIONAL
US Markets:

US indices are up this morning with all three of the S&P500, Dow Jones Industrial Average and Nasdaq trading up slightly by 0.7, 0.1 and 0.5 per cent respectively. Most sectors recorded modest gains with Materials and Financials leading the way – increasing 1.8 and 1.5 per cent, respectively. The biggest underperforming sector was Consumer Discretionary, remaining unchanged.

Single stock winners of the day are holding company, Franklin Resources Inc, up 8.9 per cent and chemical manufacturing company, Albemarle Corp, rising 6.5 per cent at the time of writing.

On the flip side, General Electric Co fell 4.5 per cent while computer company, Western Digital Corp, slid 2.8 per cent.

Gamestop had another volatile session, rising as high as US$349 before dropping back down to US$188 within half an hour. The stock triggered a volatility halt twice, with investors continuing to buy and sell the stock on what seems like momentum alone.

February Consumer Price results were relatively flat for February. However, economists are predicting the combination of a global economic recovery in conjunction with the US stimulus package, could heat up inflation expectations and cause a material effect on world markets moving forward.

Asia:

Overnight in Asian markets, the Shanghai Composite was down slightly by 0.1 per cent with both the Nikkei and Shenzhen flat and up 0.7 per cent respectively. This comes after the main Asian indices hit two-month lows earlier in the week.

Commodities:

Among the commonly tracked commodities, Gold was down slightly at US$1714.50 (NZ$2382) per ounce. Cryptocurrencies continue to rise as Bitcoin is currently trading up 4.8 per cent at US$57,071 (NZ$79226) while Ethereum followed modestly with its own 0.5 per cent increase, now trading at US$1,845.75. Oil remained flat after rising earlier in the week with WTI crude trading US$63.58 per barrel.

Lastly, US 10-year treasury yields remained flat overnight at 1.526 per cent. This comes after speculation yields could reach as high as 2 per cent toward the end of this year depending on seeing a rise in inflation.

Australia

The ASX 200 was down 0.8 per cent to 6,714.1 points.

The best performing sector of the day was Information Technology, up 3.2 per cent, followed by Industrials, up 0.9 per cent. The worst performing sector was Energy, down 3 per cent.

Despite a 2.5 per cent fall in the materials sector, part of the session’s top gainers were gold miner, Ramelius Resources, increasing 9.8 per cent to A$1.57 and gold producer Silver Lake Resources, up 7.3 per cent. The two companies were profiting from decreasing bond yields and a weakened US dollar.

Afterpay was also one of the top performers, rising 7.5 per cent to A$115.26. The rise came after an announcement that Afterpay has completed its acquisition of Pagantis, in preparation for the launch of its Clearpay services in Europe. The first countries to get the service will be Spain, France and Italy – which Afterpay suggests represents a total addressable market of over 150 billion euros.

It seems news of the expansion was able to offset comments from the Australian Securities and Investments Commission regarding a review of the buy now, pay later sector during the next year. The investigation would look at the design of the services offered and the extent to which these businesses take advantage of investors’ greater risk appetite. Release of the news caused other players in the sector to dip, including Zip Co (-3.9 per cent) and Sezzle (-1.8 per cent).

The bottom of the performance list was taken out by Fortescue Metals Group, dropping 8.3 per cent, and metals and mining corporation, Rio Tinto, which decreased 5.5 per cent. The drop happened due to environmental restrictions in China, which interfered with the transport of iron ore.

After speculations about a potential acquisition of Treasury Wine Estates (TWE) by Pernod Ricard earlier this week, TWE has now entered a deal worth A$100 million to license four of its brands to The Wine Group, a US wine producer. This is a step towards the company’s goal of focusing more on premium wines in the US market and led to an increase of TWE’s share price of 2.9 per cent to A$11.42.

Current market conditions seem to remain favourable for companies wanting to go public, with two more intended listings announced yesterday in the small cap space. Software company, EP&T Group, is looking to raise A$11 million and aims to be publicly traded on the ASX within two months. Online retailer, The Nile Group, is also working towards an IPO. After a pre-IPO raising of A$2.5 million, the seller of children and baby products has now appointed two brokers to help listing on the ASX.

The Westpac-Melbourne Institute index consumer sentiment results were in line with the business confidence and business conditions published by NAB this week. The index increased by 21.6 per cent compared to March last year and shows that consumers are more optimistic regarding the economy and their personal spending.

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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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