Australia and New Zealand Market Movers is provided by: Australasian Trading Management.
The Australian share market was higher on Tuesday (ASX 200 index +0.54%) with the market index finishing above 6000 points for the first time since late February. The major banks led the market higher, and even a scathing report from APRA was not enough to turn investors away from Commonwealth Bank which also made gains. In other news, software as a service company WiseTech Global saw its shares price jump 5% after it upgraded its full-year revenue guidance. Management upgraded its 2018 full year revenue guidance to the range of $210m to $220, subject to currency movements, which represents year-on-year growth of between 37% and 43%.
The New Zealand market dipped on Tuesday (NZX 50 index -0.09%) despite a gain in energy stocks and ANZ Bank New Zealand rising on its first-half earnings. SkyCity Entertainment saw its shares dip as it announced its $703m New Zealand International Convention Centre and Hobson Street hotel project, which is being built by Fletcher Building, will be delayed a further six months. They are now expected to be completed in December 2019. Fletcher Building shares were also lower.
The Reserve Bank of Australia (RBA) kept the cash rate on hold at 1.5% for the 19th consecutive meeting. The market is now pricing a probability of a rate hike this year at 32%, compared to 91% just six months ago.
The Australian dollar fell back down to 75 cents versus the US dollar, surrendering to a rally in the greenback as well as signs that local interest rates won’t be rising anytime soon (The NZ dollar has also fallen below 70 cents versus the US dollar for the first time this year). As we touched on earlier this week, one of our long standing medium-term views is that the Aussie dollar and Kiwi will continue to weaken versus the US dollar.
Stock in Focus: ANZ Bank (ANZ:AX / ANZ:NZ)
ANZ released its half-yearly report, revealing a mixed start to 2018 from the bank. The report warned that revenues would tighten in the future as regulation increased. Despite this, shares were up 2%, as the banking sector has been hit hard of late by negative sentiment from the official inquiry into unethical practices across the sector. As we touched on yesterday, there are indications to us that the sector is now oversold, as concerns around the recent royal commission into the industry become overplayed.
Looking at the result itself, ANZ Bank achieved a 4.1% increase in underlying cash profit to $3.49 billion for the six months ending March 31. While this was ahead of the market’s expectations, its 80 cents per share interim dividend was in line with forecasts. In relation to the royal commission into financial services, chief executive Shayne Elliott said the bank will learn from this inquiry and continue to take real action to restore trust within the community.
For a detailed analysis of ANZ’s Balance Sheet click here
Global markets were in positive territory overnight with shares of Intel, Apple and Microsoft bolstering major market indices. Shares in Apple were higher after hours as it reported quarterly earnings and revenue that beat expectations but sold fewer iPhones than expected.
3 Things Markets Will be Watching this Week
1. Corporate earnings season continues in the US this week.
2. The Reserve Bank of Australia makes an interest rate decision Tuesday.
3. The US Federal Reserve holds its latest monetary policy meeting mid-week.
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.
For further independent and high quality stock research for investors and traders click here.