Australia (ASX) & New Zealand (NZX) Market Movers – 4th May

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

The Australian share market rallied on Thursday (ASX 200 index +0.8%) notching the 5th straight day of gains, as the ASX closed at a 3-month high. The major Australian miners rose following a lift in overnight iron ore, nickel and aluminium prices.

Seven West Media and Nine Entertainment rose after the Australian Competition and Consumer Commission decided not to oppose the companies acquiring Network Ten’s stake in the TX Australia (TXA) joint venture. Shares in National Australia Bank (NAB) Bank’s Balance Sheet Analysis fell after the bank released its half-yearly results which revealed cash earnings in the first half of 2018 fell by 16% to $2.8bn from the first half of 2017. Early education provider G8 Education shares were higher as it said at a conference that it predicts changes to government subsidy of child care set to start in the second half of the year will help increase its profits.  G8 Education Face Growth Headwinds

The New Zealand market continued to notch gains yesterday (NZX 50 index +0.6%) led by Z Energy following its annual results, with Chorus and Genesis also rising. In other news, Auckland electricity and gas distributor Vector has asked the Auckland High Court for an injunction against media organisation Stuff over Vector customer data given to Stuff by a hacker, to stop Vector “failing its customers again”.

Global markets were slightly lower overnight, although the US market did trim losses over the session after a sharp drop early saw the S&P 500 (key US market Index) briefly fall below its 200-day moving average (a key technical indicator level).

There are a number of factors currently driving global markets and investor sentiment. investors appear torn between solid company profit figures versus the prospect of higher interest rates, while political risks, namely a trade war between the US and China are also a feature in news headlines.

Stock in Focus: Z Energy (ZEL:NZ / ZEL:AX)

Z Energy (ZEL) led the NZ market index higher yesterday (up 3%) as it delivered annual earnings within its lowered guidance, with profits rising as the government looks more closely at pricing strategy in the fuel sector.

Looking at some of the detail, revenue surged 18% to $4.57 billion, and net profit rose 8% to $263 million for the financial year. ZEL’s preferred measure of operating earnings increased by 13% to $449 million, within the guidance update it gave in January (which was previously lowered by about $20 million due to the shutdown of the New Zealand Refining fuel pipeline to Auckland and the rising price of crude oil). The result saw ZEL declared a full-year dividend of 21.9 cents, up from 19.9 cents in 2017, bringing total dividends for 2018 to 32.3 cents. ZEL expects to pay a 2019 dividend of between 50 cents and 55 cents if it hits the midpoint of its earnings guidance.

The solid dividend likely saw buying support for the stock, although as we have previously discussed we believe ZEL faces massive medium-term uncertainties given the rise of electric vehicles.  

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.

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Categories: Australian Stocks, New Zealand Stocks

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