Yovich & Co Market Update - 15 December 2025.

The NZX 50 declined by 0.57% over the week to close at 13,406.91, consolidating after a strong late-November rally.

Australia’s All Ordinaries Index gained about 0.64% for the week to 8,983.30, with most of the advance driven by a strong session on Friday. Resource names, particularly gold miners, and the major banks outperformed after Wall Street set fresh record highs following the Federal Reserve’s latest rate cut. From a broader macro perspective, AMP’s weekly commentary noted that Australia’s positive performance was underpinned by a supportive global backdrop, even as the RBA maintained a hawkish hold at 3.6%, keeping interest rates and their impact on rate-sensitive sectors firmly in focus.

The Shanghai Composite finished the week at 3,889.35, down around 0.34%. While Friday’s session was modestly stronger, it was insufficient to offset earlier weakness. Investor sentiment remains caught between optimism around ongoing policy support and lingering concerns about the durability of the growth recovery. Recent commentary from Trading Economics highlighted pledges by policymakers to deploy more proactive fiscal measures to support consumption and investment and to stabilise the property sector, with expectations for only gradual monetary easing next year.

The FTSE 100 eased by 0.19% over the week to 9,649.03, with Friday’s 0.56% decline reflecting a more cautious, risk-off tone. Interest rates remain a key driver into mid-December. According to the Financial Times, markets widely expect the Bank of England to cut by 25bp to 3.75% on Thursday, putting added emphasis on guidance regarding the scope and pace of further easing.

In the United States, Friday’s trading session saw notable divergence beneath the headline indices: the Dow Jones Industrial Average rose 0.5% on the day to close at 48,458.05, while the Nasdaq fell 1.7% to 23,195.17 as mega-cap and AI-linked technology names came under pressure. For the week, the Dow gained 1.0%, and the Nasdaq declined 1.62%. Both the Dow and S&P 500 nonetheless reached new record highs after the Federal Reserve delivered a further interest rate cut, although sentiment was tempered by weaker-than-hoped updates from Oracle and, later, semiconductor giant Broadcom. Reuters linked the late-week sell-off in technology to renewed concerns about an “AI bubble” following Broadcom’s outlook, which triggered a broader pullback across semiconductor and AI-related names, even as the Dow proved relatively resilient. On the macro front, AMP highlighted that the Fed’s additional 25bp cut, bringing the policy rate to a 4.5%-4.75% range, was generally interpreted as supportive for risk assets, though markets are increasingly focused on the potential speed and extent of further easing from here.

Source: Iress

Investment News

Comvita Limited (CVT.NZ)

Comvita, the New Zealand Mānuka honey and natural health products company, has reached a new agreement with its lending syndicate to buy time for a major recapitalisation (balance-sheet repair involving new capital and revised bank terms) after the proposed takeover by Florenz failed to proceed. The deal extends bank facilities that were due in January and March out to 30 April 2026, grants covenant waivers (temporary relaxation of loan conditions) for the 31 March 2026 testing date and adds a new requirement for Comvita to deliver a minimum level of underlying profit for the six months to December. Management has signalled that at least $25m of fresh capital will be needed to “position the company appropriately,” and says it is in early, constructive talks with potential investors, which could include existing shareholders or new strategic partners. Bulls take comfort that lenders are still supportive, maturities have been pushed out, and the company now has a clearer runway to reset the balance sheet and refocus on its core Mānuka honey brand. Bears see the move as a clear sign of financial stress, with meaningful dilution risk for existing shareholders and a reminder that the underlying business still needs to demonstrate consistent profitability and cash generation. Share Price Reaction: Comvita’s shares ticked higher following the announcement, trading around $0.52–$0.53 (up roughly 4–5% on the day), as the market welcomed the breathing space provided by the banks. However, the stock remains down about one-third over the past year, reflecting ongoing concern about leverage, recapitalisation risk, and the time it may take to restore investor confidence.

Current Share Price: $0.50, Consensus Target Price: $0.80.

Oracle Corporation (ORCL.NYS)

Oracle’s Q2 FY26 result delivered solid growth but a harsh market reaction, as investors focused more on how much it is spending on AI data centres than on the headline numbers. Quarterly revenue grew about 14% to US$16.1b, with cloud revenue up 34% to US$8.0b and infrastructure cloud growing even faster, and remaining performance obligations (RPO – contracted future revenue not yet recognised) jumping over 400% year-on-year to US$523b, helped by large AI-related deals with major tech customers. However, revenue was slightly below Wall Street expectations, and Oracle sharply lifted its capital expenditure (capex, long-term investment in data centres and hardware) plan to around US$50b for FY26, funded in part by higher debt, which has raised worries about negative free cash flow (cash left after all investment) and balance-sheet risk. Bulls argue that Oracle is locking in a huge long-term AI workload pipeline, backed by a large backlog and multi-year contracts and that heavy upfront investment is the price of securing a durable position in cloud and AI infrastructure. Bears worry that the company is spending ahead of proven returns, with a growing debt load, thin near-term cash flow, and a risk that the current AI enthusiasm does not translate into the earnings needed to justify this capex.

Share Price Reaction: The market’s verdict was swift: Oracle’s shares fell roughly 11–15% in a single session, dropping from around US$223 to just under US$200, at one point trading as low as the mid-US$180s. The move wiped tens of billions off Oracle’s market value and triggered a broader wobble in AI-linked stocks, signalling that investors have become more sensitive to AI spending stories that are big on capex but light on near-term free cash flow.

Current Share Price: $189.97, Consensus Target Price: $293.00, Forecasted Gross Dividend Yield: 0.98%

GE Vernova Inc. (GEV.NYS)

GE Vernova, the energy-technology spin-off from General Electric, delivered a very upbeat 2025 Investor Update, raising its multi-year financial outlook and stepping up capital returns (dividends and buybacks). The company now expects revenue of US$41–42b in 2026 and around US$52b by 2028, with an adjusted EBITDA margin (a profit margin before interest, tax, depreciation and amortisation) target of 20% by 2028, up from an 8–9% range in 2025. GE Vernova plans to lift its total order backlog (signed contracts not yet delivered) from US$135b to about US$200b by 2028 and to generate at least US$22b of cumulative free cash flow between 2025 and 2028, even after roughly US$10b of capex and R&D over that period. Reflecting growing confidence, the Board doubled the quarterly dividend to US$0.50 per share and expanded the share buyback authorisation from US$6b to US$10b. Management highlighted strong demand for gas turbines, grids and electrification equipment, particularly from data centres and AI-driven power demand, as key drivers of this upgraded trajectory. Bulls see GE Vernova as a prime beneficiary of the energy transition plus AI power needs, combining visible multi-year growth, improving margins and generous shareholder returns. Bears caution that large power and grid projects are capital-intensive and politically exposed, leaving the story sensitive to changes in energy policy, permitting delays and the broader economic cycle. Share Price Reaction: GE Vernova’s shares surged around 15–16% on the update to a record high near US$720, marking one of its biggest one-day gains since listing. The sharp move higher suggests investors had not fully priced in the stronger 2026–2028 outlook and now see the stock as a core way to play fast-growing electricity demand from AI data centres and the wider energy transition, albeit with the usual project-execution and policy risks in mind.

Current Share Price: $671.71, Consensus Target Price: $731.69, Forecasted Gross Dividend Yield: 0.15%.

Ryman Healthcare (RYM.NZ / RYM.AX)

Ryman CEO Naomi James has increased her personal stake in the company, buying 86,977 shares on-market at $2.87 per share (around $250k) on 9 December, lifting her holding from 177,500 to 264,477 shares. At the same time, recent broker updates have nudged the 12-month consensus target price higher, to $3.23, implying upside from the recent share price of $2.90.

Current Share Price: $2.94, Consensus Target Price: $3.23.

Upcoming Dividends: 16th December to 16th January.

Source: Iress

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