Australia and New Zealand Market Movers is provided by: Australasian Trading Management.
The Australian share market was slightly lower yesterday (ASX 200 index -0.03%) as the mining heavyweights were hit by falls in iron ore prices, while the Australian dollar hit a one-year low. Pharma giant CSL was a bright spot as its shares surged to a new record high. In other news, the federal government has chosen Vocus to roll out a new undersea cable that will connect Solomon Islands and Papua New Guinea with Australia. Insurance Australia Group (IAG) shares rose after it announced it is selling off 3 of its Asian operations for more than $525m (interests in Thailand, Indonesia, and Vietnam).
The New Zealand market sold off on Monday (NZX 50 index -1.24%) with broad based losses led by Pushpay, with Mercury and Fletcher Building shares also coming under pressure. In other news, the New Zealand dollar extended gains against its trans-Tasman counterpart on concerns that a trade war between the world’s two biggest economies would weigh more heavily on the Australian economy, potentially keeping interest rates lower for longer.
Global markets sold off overnight, although recovered during the trading session paring earlier losses. Once again, a potential trade war between the US and China dominated headlines and investor attention.
Trump has proposed tariffs on a further $US200 billion worth of Chinese goods as Trump said his move followed China’s decision to raise tariffs on $50 billion in US goods, which came after U.S. announced similar tariffs on Chinese goods on Friday. Asian markets such as China’s Shanghai composite were sharply lower yesterday as the ongoing news continues to shake investor sentiment. A trade war is generally seen as a significant risk to the outlook for global economic growth and we are watching developments closely.
While the stock market was lower the US dollar continues to strengthen, versus both the Aussie and Kiwi Dollar which were lower on the back of trade concerns and a fall in commodity prices. The Aussie dollar hit a 1-year low, as it is seen as more exposed to China if a trade war was to escalate.
Stock in Focus: Pushpay (PPH:NZ / PPH:AX)
Shares in Pushpay dropped yesterday after the mobile payment app company completed a $100 million bookbuild to let executive director Eliot Crowther exit the firm he co-founded, selling 24.8 million shares at $4.04 a share.
The bookbuild was oversubscribed, with bids subject to scaling, and got offers from 19 institutional investors across New Zealand, Australia and the US, Pushpay said. The share sell-down has been attributed to personal reasons.
Within yesterday’s announcement Pushpay also said it has dropped plans to list in the US this year, as it has “largely achieved” the main goals of doing so with Crowther’s exit improving liquidity without the cost of a market listing. We have previously been critical as to the additional benefits of listing on the US market and view the decision positively.
3 Things Markets Will be Watching this Week
1. Investors will be watching the widening trade dispute between the US and China.
2. Minutes from the last Reserve Bank of Australia meeting are released on Tuesday, while NZ economic growth (GDP) data is published on Thursday.
3. OPEC and its oil allies meet in Vienna this Friday and Saturday to review their production agreement..
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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