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Australia & New Zealand Market Movers
The Australian share market was higher on Tuesday (ASX 200 index +0.60%) with shares gaining ground as the Australian dollar hovered at a four-month low and inflation remained below the Reserve Bank’s target range.
AMP shares continue to experience heavy selling as the wealth manager has come under fire over revelations about its conduct made at a Royal Commission public inquiry into misconduct within the banking and finance industries. Chief executive Craig Meller has quit over the scandals, and AMP could face three shareholder class actions after it admitted to cheating customers and lying to the corporate regulator. Law firms Shine Lawyers, Slater and Gordon and Quinn Emanuel Urquhart & Sullivan are investigating class actions against AMP on behalf of shareholders.
The New Zealand market was lower on Tuesday (NZX 50 index -0.18%) in light trading ahead of the ANZAC day public holiday, with A2 Milk and Synlait Milk continuing to weaken while Fisher and Paykel Healthcare rebounded and Fletcher Building extended gains. Fisher & Paykel has been under some pressure, which was likely relieved by the strengthening US dollar – as the company generates most of its revenue from the US (an increase in the currency improves returns in NZ dollar terms).
Stock in Focus: Bank of Queensland (BOQ:AX)
Bank of Queensland reported a 4% lift in cash earnings to $182m for the 1sthalf of 2018 and an 8% increase in statutory net profit after tax to $174m. Its net interest margin (NIM) increased 1 basis point to 1.97%.
This was not a bad set of numbers, however several market commentators are noting the bank faces challenges in terms of competition from micro banks and non-bank financial institutions and the need to remain competitive in a rapidly evolving competitive landscape. Given the recent bad press around the Royal Commission into the practices of the financial sector this has also increased uncertainty around the stock.
3 Things Markets Will be Watching this Week
1. Corporate earnings season in the US will gather pace this week with about one-third of the S&P 500’s members scheduled to report in the next five days.
2. Investors will continue to watch fallout from the Hayne royal commission into the financial sector in Australia.
3. The latest Australian inflation data is published on Tuesday.