Yovich & Co. Market Update - 18 December 2019
Dec 19, 2019 | Commentary
This year the team has grown; Nathanael achieved his AFA qualification and now joins Walter and Jarrod at offering personalised advice along with focusing on advice regarding KiwiSaver. Amy has joined MaryRose, Jill and Tracey in the hard-working admin team, and in the year ahead Tracey will be experiencing the Canadian way of life for 8 months. From all of us at Yovich & Co we wish you a Merry Christmas and a prosperous New Year. The office will be closed from 12.00pm Tuesday 24 December and will reopen 6 January. Below is a summary of the year in review:
New Zealand Equities
Since 3 January 2019, the NZX50 is up against its other trading partners except the NASDAQ (28.57%, 29.62% respectively). New Zealand Reserve Bank surprised everybody, lowering the OCR 50 basis points on 7 August 2019. The lowering of the OCR this year has resulted in investors searching for high income producing equities, resulting in the NZ50G breaking though the 11200 level for the first time in early September.
As an example if an investor purchased $500 of the SmartShares NZ Top 50 ETF (FNZ) on 3 January 2019 ($2.49), it would be worth $614 as of 17 December 2019, that is a 22.8% capital return (excluding dividend payments).
The NZD vs AUD has fluctuated between 0.9755 and 0.9204 throughout the year. Appreciation over the last month has seen the NZD back up to levels as at the beginning of the year, which is good timing for New Zealanders heading across the ditch for Christmas and the New Year.
New Listings this year
Cannasouth listed 19 June 2019 at an IPO price of 50 cents per share, this was followed by a roller coaster ride for investors regarding share price. Share price dropped to 29 cents in July and reached a high of 76 cents in October and levelled out at the 60-65 cent range.
Napier Port listed 20 August at an IPO price of $2.60 per share and has never looked back. Share price is currently $3.49, providing investors an outstanding 34.23% increase. Its first AGM as a listed company will be held on 20 Friday December 2019.
This year has seen a lower number of takeover announcements.
- Abano Healthcare released information that Bidco will acquire 100% of the fully paid shares in Abano Healthcare Group Limited for $5.70 per share, by way of a scheme of arrangement. Shareholder approval is required along with other regulatory bodies approval. Further information will be known in the first quarter of 2020.
- Metlifecare received a highly conditional, non-binding preliminary expression of interest from a credible third party NBIO to acquire the company. Metlifecare share price reacted positively as share price moved from $5 to over $5.70.
Stock picks as mentioned in the 07/01/2019 Yovich & Co Newsletter vs current value
Trade Wars: Trade discussions between USA and China are still in discussion, a phase one trade deal was announced Friday 13 between China and the US—news that the US markets had been waiting with bated breath for. Expectations are that Donald Trump will have the deal done before the US election in November 2020.
Brexit: Boris Johnson has reconfirmed his leadership as the UK Prime minister winning the election held on 12 December 2019. Brexit is expected to be completed by January 31, 2020, “with a new trade deal with the European Union by the end of 2020” said cabinet office minister Michael Gove (NewsHub). The uncertainty in Europe has also affected the NZ market and is reflected in Gentrack’s current share price.
Hong Kong: The protests in Hong Kong have not been at the forefront of media lately. The unrest began in March with a mass movement in June when hundreds of thousands of people marched against the Hong Kong extradition bill. Travel agencies warned travellers of the potential danger and airports became protest sites, trade and tourism has been affected.
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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