Australia (ASX) & New Zealand (NZX) Market Movers – 24th April

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The Australian share market was higher yesterday (ASX 200 index +0.29%) led by positive performances from the banks. ANZ shares were up despite revelations at the royal commission on Monday that its financial advice was not in the interest of customers and that “high risk” advisers were instructing clients. Shares in childcare centre operator G8 Education continue to come under pressure as management downgraded earnings guidance once again. G8 are citing continued growth in industry supply for 2018 coming up against a drop in demand, and that given the prevailing market environment and impact on occupancy, it is clear that previous earnings targets are no longer achievable.

The New Zealand market was lower on Monday (NZX 50 index -0.24%) in light trading, with A2 Milk and Synlait Milk leading the index lower, while Pushpay Holdings and Fletcher Building gained. In other news, New Zealand Refining shares were higher after its annual meeting yesterday. CEO Sjoerd Post said the failure of the pipeline between the plant at Marsden Point and Auckland in September 2017 had a net impact on profit of $8.2m. At the end of February, the company declared a 66% increase in net profit for the year to Dec. 31 to $78.5m, driven by historically high average refining margins of US$8.02 per barrel of oil processed.

Stock in Focus: Kogan (KGN:AX)

Shares of Kogan.com (KGN), the Australian online retailer dropped 17.7% yesterday on huge trading volume after the company released its third-quarter cashflow statement.

Revenues for the quarter surged 46.6% year on year to AU$108 million with the company reporting strong mobile uptake and customer numbers.  However, investors were spooked by negative cashflow of $625,000 with management pointing to seasonality and a “normal payables pattern” after the Christmas period.

The announcement illustrates the volatility which can be experienced when investing in a high-flying growth stocks, where market expectations are usually elevated after a strong run. Long term holders of the stock may still have reason to smile with the stock still up 12.09% year to date and 410% since its July 2016 IPO.

Categories: Australian Stocks, New Zealand Stocks

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