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Australia (ASX) & New Zealand (NZX) Market Movers – 21st May – Stock in Focus CSL (ASX: CSL)

Australia and New Zealand Market Movers is provided by: Australasian Trading Management.

The Australian share market was lower on Friday (ASX 200 index -0.11%) as mining and banking stocks lost ground, despite the energy sector and vaccines giant CSL providing support for the market index. In stock news, AMP dipped as the wealth management giant appeared in court for the first time to defend a class action brought on behalf of shareholders who lost money after damaging revelations at the banks royal commission.

The New Zealand market was higher on Friday (NZX 50 index +0.63%) as Goodman Property Trust rose as its joint venture with Singapore sovereign wealth fund GIC sold seven Auckland CBD buildings to US private equity firm Blackstone for $635 million. Retirement village major Ryman Healthcare released another record profit as it lifted annual underlying earnings 14% to $203.5 million and said it anticipates more growth with 16 villages in the pipeline. Heartland Bank shares were also higher as the lender said it expects annual earnings to be at the top of guidance after its third-quarter profit rose 11% on continued lending growth. On the flipside, A2 Milk dropped another -4%, rounding out a -13% slump for the week.

Global markets were generally lower on Friday after another choppy trading session as bank and chipmaker stocks weighed on the index and investors grappled with US – China trade talks.

Now that the very solid corporate earnings season has ended in the US, the focus of investors appears to have shifted back to geopolitical issues. Back in the limelight is the potential of a trade-war between the US and China, and investors assessed conflicting signals on trade talks between the world’s two largest economies over the weekend.

Politics in peripheral Europe are also back in the spotlight after Italy’s populist leaders sealed a coalition agreement and a plan for reforms seen as a challenge to the European Union establishment.

A number of major ASX & NZX company’s released profit updates on Friday including CSL, Heartland Bank, and Ryman Healthcare. This week also sees a number of updates which we will be watching closely.

Stock in Focus: CSL Limited (CSL:AX)

Shares in pharma giant CSL hit a new all time high, leading the Australian market higher on Friday with a +4% surge as the stock has been one of the best performers on the market. We have had a BUY on CSL for some time now, and earlier this year highlighted there were no signs that CSL was slowing down.

 

CSL delivered again on Friday, providing the market with a upgraded profit outlook for the 2018 financial year. CSL now expects net profit after tax for 2018 to be in the range of approximately US$1,680 to US$1,710 million in constant currency (compared to the previous guidance range of US$1,550 to US$1,600 million). The lift in guidance by management of 6% to 8% was driven by a number of positive outcomes, including a positive product and geographic sales mix shift.

In addition to this, CSL pointed to a strong performance from its Seqirus influenza business following a severe northern hemisphere influenza season and the phasing of investments in clinical trials having a positive financial impact. We are pleased to see that the Seqirus flu business is finally reaping benefits after initially being a loss-making acquisition/merger.

We think the latest update once again highlights why CSL is seen as one of the highest quality defensive healthcare exposures on the Australian market.

3 Things Markets Will be Watching this Week

  1. The development of trade talks between the US & China.
  2. US Federal Reserve Chairman Powell makes a speech on Friday, following the release of the latest Fed meeting minutes on Wednesday.
  3. This week also sees a number of profit updates from ASX/NZX company’s which we will be watching closely

Australia and New Zealand Market Movers is provided by Australasian Trading Management. ATM is an independent research house covering stock analysis across major markets including the ASX, NZX and US markets. We make our research easy to understand and concise, taking complex issues and simplifying them so that you can make informed and accurate decisions. We have no conflicts of interest and our only goal is to generate positive returns for our members. We run transparent model portfolios to track performance and invest where we see the most value, in companies of all sizes across all industries, and often in smaller companies.

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Categories: Australian Stocks, New Zealand Stocks

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