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Australia (ASX) & New Zealand (NZX) Market Movers – 7th June – Stock in Focus: New Zealand King Salmon

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

The Australian share market was higher on Wednesday (ASX 200 index +0.50%) as a rally in base metals helped lift mining stocks, despite losses experienced by the four major banks. In other news, economic growth (GDP) data showed that Australia’s economy was performing ahead of expectation, growing 1% for the March quarter and taking the annual growth rate to 3.1%. The result helped the Australian dollar advance 0.6% but did little to impact the share market.

The New Zealand market continued to rally yesterday (NZX 50 index +0.64%) as the NZX 50 hit a new all-time record high. Fisher & Paykel Healthcare extended its gains and investors picked up stocks that are carrying a dividend payment including Ryman Healthcare, Mainfreight and Arvida Group. In stock news, shares in NZX fell even after the market operator’s monthly metrics showed share trading continued to rise in May. Year-to-date the total number of trades is up 79% to 1.3 million and the total value traded is up 5.3% to $17 billion.

Global markets were higher overnight with gains on Wall Street being broad based. Interestingly, US Technology stocks (measured by the Nasdaq Index) are back at all-time highs, as well as the Russell 2000 US small-cap index which has powered to fresh record highs over the last few weeks. Closer to home, the NZ market (NZX 50) is also trading at a fresh all-time high.   

As we touched on yesterday, stocks appear to be trading in a range as investors digest macroeconomic news from Italian elections to trade tariffs, while the fundamentals around the economy and company profits remain solid.  On the trade front, Canada’s Justin Trudeau will be hosting a Group of 7 leaders summit this week in Quebec. A focus of the agenda is likely to be trade and in particular the Trump administration’s protectionist policies. Trump is expected to not back down from the tough line he has taken on trade, the White House’s top economic adviser said on Wednesday.

Stock in Focus: New Zealand King Salmon (NZK:NZ / NZK:AX)

Shares in New Zealand King Salmon (NZK) were higher yesterday after it announced full-year earnings are likely to be “at the upper end or slightly above” guidance.

NZK gave an operating earnings (EBITDA) forecast for the 2019 year of $25 million to $28.5 million, assuming a harvest of about 8,000 tonnes, a lower mortality rate than in 2018, and continuation of the current rate of capital spending for the next three years. As highlighted previously, a hot summer has curbed expectations for volumes available for sale in both 2018 and 2019. The 2018 year has seen sales volumes of about 7,750 tonnes from a harvest of about 8,000 tonnes, as while prices have risen, the past summer “has significantly impacted survival rates”.

The company reiterated that it is in talks with the government about plans to relocate farms to cooler, deeper waters within the Marlborough Sounds. Risks such as water temperature are inherent and should be kept in mind when investing in agri-businesses such as NZK.
3 Things Markets Will be Watching this Week

1. The price of oil as it continues to retrace from recent highs.

2. The Reserve Bank of Australia makes an interest rate decision on Tuesday.

3.  Australian economic growth (GDP) data is published on Wednesday.

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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