Australia and New Zealand Market Movers is provided by: Australasian Trading Management.
The Australian share market was lower on Friday (ASX 200 index -0.20%) but recorded its first weekly gain in 4 weeks. Xero shares hit an all-time price high as a broker note predicted that the accounting software company would soon become the dominant player in the market and that competitor MYOB’s market share would fall. Sandfire Resources also hit an all-time high this week on the back of a surging copper price. On the flipside, the bad news continues for Retail Food Group which has dropped out of the S&P/ASX 200 market index.
The New Zealand market was in positive territory on Friday (NZX 50 index +0.44%) as the NZX 50 notched an impressive +3.5% gain for the week. Gains on Friday were led by retailer Kathmandu and NZ Refining. In stock news, Precinct Properties was slightly higher as it released a quarterly update, however the update did not include any new information about its Commercial Bay development in central Auckland (which is being managed by Fletcher Building).
Global markets were higher on Friday as Wall Street pulled off its third-straight week of gains despite ongoing tensions between the US and its key G7 partners over trade.
There is a sense of uncertainty around global politics with a war of words between US President Donald Trump and his G7 allies that saw the leaders’ summit over the weekend end in disarray. Trump retracted his endorsement of the G7 communique in response to Canada’s opposition to US tariffs, accusing Prime Minister Justin Trudeau of engaging in “bad faith diplomacy” after G7 leaders had put on a show of unity to play down divisions on trade. Investors had low expectations for the summit and we find it quite remarkable that Trump is taking such a harsh stance with its G7 allies.
This week investors will also be watching Trump’s upcoming meeting with North Korean leader Kim Jong Un to see if meaningful steps towards denuclearisation can help ease tensions. Donald Trump has said Kim Jong-un has one shot at peace ahead of the Singapore summit.
Later in the week the US Federal Reserve makes an important interest rate decision Thursday morning (AU/NZ time)
Stock in Focus: Spark (SPK:NZ / SPK:AX)
Spark shares have been on the rise of late as the Telco released a well-received update.
Spark said it expects annual earnings to fall by as much as 2.5% this year as it brings forward restructuring costs and accelerates its ‘Quantum Programme’ to transform the company into the operator with the lowest costs. Spark anticipates operating earnings of between $971 million and $991 million in the year ending June 30 as it doubles this year’s restructuring costs to $50 million-to-$55 million. The end goal is to fatten operating earnings (ebitda) margins to more than 30%, which were 25.4% in its first-half result.
3 Things Markets Will be Watching this Week
1. Geopolitics as US President Trump meets with North Korean Leader Kim Jong-un on Tuesday.
2. The US Federal Reserve makes an interest rate decision Thursday morning (AU/NZ time)
3. Trade tensions with the US remain in focus following the G7 summit over the weekend.
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