Yovich & Co. Weekly Update - 20 October 2014
Oct 20, 2014 | Commentary Offers
This Week’s Themes
The market correction picked up pace last week as investors weighed up data and commentary showing that global growth was slowing.
Despite the fall in the broader market, the high yielding stocks in the defensive sectors held up relatively well. The theme of hunting for reliable yield in the low interest rate environment continues.
The Aussie market bounced back after falling by over 8% since September. Institutional Investors piled back into the large caps at recent lows.
The U.S. Bond market volatility is an indication of the fickle mind-set that U.S. investors have as nervousness rose as a result of figures showing a global economic slowdown and lower than expected inflation.
Central to the increased volatility in markets is the uncertainty around how successful the continued various Quantitative Easing programs have been by the Central Governments of the world’s largest economies. The main concern since the Global Financial Crises has been if these large economies can avoid going into a sustained period of deflation which can destroy wealth and economic confidence. So far, Quantitative Easing has helped stimulate these economies and keep the wheels greased, but how long is it going to be needed for and are further measures required to avoid deflation? At this point it appears that the status quo will remain and that if required QE4 will be implemented in the U.S.
The New Zealand Dollar rebounded against the USD and Aussie with investors looking at the carry trade between the relatively high rates of interest in New Zealand versus the lower rates in both the U.S. and Australia.
Orion Health Intention to List – Initial Indications
Orion Health Group Limited (“Orion Health”), a global provider of healthcare software solutions, is considering an Initial Public Offer of ordinary shares to clients of retail brokers in New Zealand and Institutional investors.
Orion Health is looking to raise between $120 and $150 million in the offer and an entity associated with CEO Ian McCrae is looking to sell up to $5 million of shares in the offer. The new capital raised would be used by Orion Health to:
Accelerate its Research and Development capacity for new opportunities while maintaining its investment in its long established global business.
Improve its implementation and delivery capability for its growing customer base.
Provide additional financial liquidity.
It is expected that a Prospectus and Investment Statement will be available in late October with the shares to be quoted on the NZX Main Board and ASX in late November.
No money is currently being sought and no applications for shares will be accepted or money received unless the subscriber has received an Investment Statement. Indications of interest will not involve an obligation or commitment of any kind.
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