Yovich & Co. Market Update - 5 November 2018

Nov 5, 2018 | Commentary

Weekly update 2018 11 05




New Zealand Equities

Biggest movers for the week were Z Energy -12.46%, Sanford -2.13%, Meridian -1.59%, Ebos -1.38% and Stride -1.05% on the downside, with Air  NZ +11.65%, Gentrack +9.38%, Kathmandu +8.85%, Ryman +6.75% and a2 Milk +7.62% on the upside.

The market has been volatile over the previous 4 weeks with markets falling from the height of this year’s peak of 9375.96 on 21 September to 8568.40 as of 26 October. This has seen an 8.6% drop in the market while still being up  5.2% from 12 months ago, it takes a 10% drop before it is called a correction. The last time that the market was a correction was between 9  September 2016 and 4 November 2016, with a 10.1% drop over an 8 week period.


















As in 2016, this drop has seen great buying opportunities for astute investors looking at holding long-term stocks, such as Banks, telecommunications, infrastructure stocks and utilities companies.

Australia and New Zealand Banking Group

Tax paid profit for the year ending September is A$6,400m down from A$6,406 last year.

Currently, ANZ is up 2.73% for the week while it is still down 10.73% on a rolling year.

Dividend of 96.76c that includes a 10c New Zealand imputation credit is payable 18 December. At the current share price of $28.28, the gross yield is 6.84%.

National Australia Bank

Tax paid profit for the year ending September is up 5.1% at A$5.55 billion from A$5.29 billion the previous year.

A dividend of A$0.99 per share is payable 14 December. This brings the gross yield to 7.77% with the current share price at A$25.46. The dividend payment of A$0.99c has been steady for five years running.

Currently National Australia Bank is up 1.95% for the week while trading 12.61% down for the rolling year.

Westpac Banking Corporation

Tax paid profit for the year ending September is up 1% at $8,095m. There is a final dividend of $1.01 to be paid 20 December. This brings the total gross dividend yield to 7.50% at the current share price of $29.10.

Currently, Westpac Bank is 1.41% up for the week and down 14.25% for the rolling year.

Fortescue  Metals Group

Shipments of 40.2 million metric tons for the three months through September. Fortescue’s average price realisation is US$45/dry ton, up 12.5% on-quarter.

Sales of its new 60.1% iron grade product, West Pilbara Fines, are expected to begin in December, with Fortescue looking to capture rising demand for higher grade ore from Chinese steelmakers. It forecast exports of 5-10 million tons of that product during the second half of its fiscal year. 

With the current share price at A$4.20  and a 12-month target price of $5.50 AUD First NZ Capital have an outperform rating.


A strong start to the financial year with first quarter NPAT up 0.2% from $15,051m to $15,075m. There has been strong growth in the Information Management division which has seen an increase in operating revenue of 8.5% for the same period as last year. The new acquisitions of Shred-X with its newly-acquired medical waste businesses, are the main drivers for this increase.

With a current share price of $7.31 the expected gross dividend yield is 5.65%. 


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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Nathanael McDonald

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