Yovich & Co. Market Update - 16 April 2020
Apr 15, 2020 | Commentary
16 April 2020
New Zealand Equities
In summary, last week the NZ50G saw 13 companies on the downside and 37 on the upside. The NZX’s performance has bettered a number of major global indices, only reaching lows -27% off 2020 peaks vs the S&P500 (-31.3%), FTSE (-34.5%), and ASX200 (-32.5%). However, the performance has been materially driven by FPH (17.7% weighting in the index) and ATM (12.9% weighting), (Jarden). The economic effect from COVID-19 has not yet presented itself to the economy. The Prime Minister will announce if NZ is to stay in level 4 or transition out Monday next week. It is important to note that the levels 2 & 3 in the lead up to level 4 may not be the same on the way out of level 4. Governments around the globe are doing their best with economic stimulus package deals; with the view of borrow now payback later. USA earning season starts this week, this will be the first earnings report since COVID-19 with mixed results expected. As expected capital raising has started; KMD.nz and AIA.nz last week, so far this week Cannasouth was first out the gate. Yovich & Co are advising that if clients’ goals and time frame have not changed then to stay the investment course. If at all concerned please contact your adviser.
Auckland International Airport
Investors as at 3 April 2020 have been issued their Share Purchase Plan (SPP) Offer Booklet. Please complete this either online or by filling out the hard copy Application form, and ensure that the share registry has the application before 7.00pm NZ time. If you have any questions please contact you adviser. The SPP offer price is set at the lowest of either the recent placement being $4.66 per share, or a 2.5% discount to the five day VWAP during the last five trading days of the SPP offer period. Allotment date for new shares is 1 May 2020. Current Share Price: $5.99, PE Ratio: 13.84, Price/NTA: 1.20.
New Zealand’s first and only listed medicinal cannabis company, is pleased to announce the opening of a $3 million share purchase plan ("SPP"). Eligible New Zealand shareholders as 14 April will be able to purchase up to $50,000 of new shares at $0.38 per share The issue price comprises a 20.65 % discount on the five day volume weighted average price of CBD shares traded on the NZX during the last five trading days prior to the date of this announcement. Download the offer document or complete the online acceptance form below. Current Share Price: $0.47, Price/NTA: 4.32.
New Zealand Oil Refinery
Has announced it is planning a significant business overhaul as it struggles against bigger offshore refineries and high local costs. The new chief executive has started a strategic review to decide how to improve returns to shareholders while maintaining a secure fuel supply for New Zealand. Options under consideration include separating refinery and non-refining infrastructure assets and shifting to a fuel-import business model. The company said infrastructure such as land, jetties, storage and pipelines have value that is not reflected in its share price. An update on the review is expected by June. The company said new and expanded refineries in China, South Korea, Singapore and India produce large volumes of low cost fuel that has pressured regional refinery margins. In New Zealand, high electricity costs have added to pressure on profits. Current Share Price: $1.08, Price/NTA: 0.42 PE Ratio: 74.44, Target Price: $1.71.
Released trade volume data for the half-year to 31 March 2020 showing growth in container traffic across its wharves from the earlier repositioning of empty containers ahead of the peak primary export season and containerised exports from Hawke’s Bay being in-line with the prior year. Bulk cargos fell compared to the same half-year period a year ago with a decrease in log exports arising from COVID-19 pandemic disruptions and adverse Chinese market conditions. Cruise Services have reduced from the planned 87 vessels booked to 76, this is still a half year rise by 10 vessels. Current Share Price: $6.05, PE Ratio: 33.89.
Disclaimer: This publication has been prepared for your general information. While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken for any errors or omissions. This publication does not constitute financial or insurance product advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. No part of this publication may be reproduced without prior written permission from our company. Disclosure statements relating to the financial advisers associated with this newsletter are available on request and free of charge.
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