Yovich & Co. Market Update - 04 December 2019

Dec 4, 2019 | Commentary

Market News

 

 

In summary, last week saw the NZX50G with 9 companies on the downside, 38 companies on the upside and 3 unchanged. The NZX50G had a bumper week up 3.38%, this being the greatest weekly gain so far this year. The previous week influences were Ryman increasing 4.57% to $15.10 trading at a high of $15.22, along with the power gentailers who have started to see a share price recovery since the talks between Energy Minister Megan Woods and Rio Tinto executives. On a rolling monthly, quarterly and yearly return the index has increased 4.88%, 5.20% and 28.25% respectively. On Thursday 5 December the new capital requirements for NZ banks will be released by the RBNZ, the same day the Commerce Commission is due to release the final Fuel Study Report. On the housing front NZ housing prices are expected to rise 5% in 2019 and 4.5% in 2020 (Jarden).   

Investment News

New Zealand Equities

Westpac Bank

Is all through the media with regards to the Australian Transaction Reports and Analysis Centre (Austrac). On 19 November the Austrac released a statement that it is seeking a civil penalty order against Westpac to the sum of A$1billion, due to the bank not complying with Anti-Money Laundering and Counter-Terrorism Financing Act. This also comes at a time when Westpac has a Share Purchase Plan offer available to current shareholders.  The share price has fallen from a one year high of $32.30 to currently trading at NZ$25.54. Yovich & Co believe that this presents an entry level or accumulate opportunity. Current: PE Ratio; 11.93, Share price; $25.25, Gross yield; 7.45%.

Gentrack

Provides vital software for essential services, pairing powerful platforms with deep market knowledge to help utilities and airports lower service costs, foster innovation and confidently navigate market reform. Gentrack serves over 200 utility and airport sites globally with its Veovo software platform. Veovo is Gentrack’s world-class solution for airports, enabling them to unlock operational, revenue, concession and passenger insights across the airport ecosystem. Gentrack is currently trading at its lowest levels since March 2017. The third profit warning announced 22 November, and the turmoil in the UK electricity sector, has seen the share price slip 27.18% from $5.15 to $3.75. Once profit, positive news and share price start to show a turnaround then this could be a Buy opportunity. Current: Share price; $3.68, Gross yield; 3.02%.

Synlait Milk

Has announced an unsecured subordinated fixed rate bond. The $150m bond issue (with the right for $50m in oversubscriptions) is to pay down debt and provide diversification of funding sources to support Synlait’s growth strategy. The fixed interest rate will be set at the sum of the Swap Rate plus the Issue Margin of between 2.50% to 2.70%, but will be no less than the Minimum Interest Rate of 3.70%, and will be announced via the NZX on 6 December being the Rate Set Date. Current: PE Ratio; 20.03, Share price; $9.19.

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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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