Auckland Property & NZX Stock Market Tips with MaximSherstobitov.NZ

Cyber Attacks on the NZ stock exchange, why NZX 50 hit an all-time high, my 3 company losers and 1 winner over the last week. You will learn all that and other top news digest.

The exchange has been hit 4 days in a row with DDoS attacks since Tuesday which have shut down trading.

The attack landed in the biggest week of earnings season, pulling attention away from the 10 companies in the top 50 reporting earnings.

NZX Ltd share price did not suffer much. It dropped only 1% after a week of cyber-attacks.

They’ll be doing a lot of soul searching and figuring out where they need to spend more money to make the system solid. We can’t have this going on.

Neither cyber attacks nor the Covid disruption could stop this. Against all odds, the New Zealand sharemarket hit a new all-time high. It passed the previous record of 12,070 set on February 21 this year.

When the index hit a low of 8500 points on March 23, just before the nationwide Covid lockdown, few if any would have foreseen it reaching new heights within 5 months as economic uncertainty became the new normal.

While businesses closed, job losses mounted, and the government kept pumping in new financial support, the sharemarket was unshaken, rising an unexpected 37%.

It was fuelled by the low interest rates and a rush of new investors – online trading platform Sharesies took on 95,000 extra customers during the lockdown – looking to place their money elsewhere than in the low deposit rates of the banks.

ANZ announced that they predict the RBNZ will cut the official cash rate to -0.25% in the first half of next year. One thing negative interest rates will drive upward the stock prices, with investors seeking growth, return and yield.

Cannasouth which announced its six months result, showing revenue of $58,000 and a loss of $1.5m compared with a loss of $820,000 for the previous corresponding period. The medicinal cannabis company has cash on hand of $11m, and its share plunged 37% from an all-time high.

Investors are speculating on the outcome of the cannabis referendum now that medicinal cannabis is already legal, and a lot of volume is coming into the share trading.

Vista Group. The share price surged by 19% after its first half result, reporting revenue of $45 million, down -34% from the same time last year, as well as EBITDA of -$6.5 million. Despite the loss, the market had anticipated a more negative result. Investors may have liked a comment from management that the company is seeing 'early indications' of reasonable demand once new content is available.

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The market was heartened by Prime Minister Jacinda Ardern's update in the battle against the virus outbreak. 

*** Medicinal cannabis stock Cannasouth jumped 50% over the last week.

This was despite getting a ‘’please explain’’ from the NZX for the rapid rise this week, to which the company stated it had not breached disclosure rules.

The stock has been rising in anticipation of the recreational cannabis referendum and a growing medicinal cannabis industry.

Do you think now is a good time to  invest in Cannasouth or should we stay away? Let me know in the comments below.

*** a2 Milk For the year ending June, the company reported a 34% increase in net profit to $385m on revenue of $1.7 billion, up 33%. 

a2 Milk doubled sales in China to $337m and expanded distribution to 19,000 stores. The China label now makes up a quarter of a2 Milk's global infant formula business.

The share price declined 3.3% because the numbers were in line with the middle of the company’s guidance range, but the expectation had been for the result to be at the top of the range.

When you are priced for perfection anything less is going to see your share price come back.

However, the stock recovered a bit after announcing it was looking to buy 75% of Mataura Valley Milk for approximately $270 million to add in-house manufacturing capability.

China Animal Husbandry Group will retain the remaining 25% shareholding.

*** Hallenstein Glasson. On the flipside, people expected the worst with Hallenstein Glasson and it wasn't. It coped well, paying a good dividend and we see a lift in their share price.

It jumped 31% after the clothing retailer said online channels helped to keep annual sales stable through the pandemic lockdowns. Online sales grew 80%.

Overall sales increased 0.1% despite the interruption from pandemic lockdowns, profit declined just 6% to 27m and the retailer declared an interim dividend of 15 cents per share.

It is an example of retail business rolling with the punches and finding new ways to reach their customers. In a yield-starved market that dividend starts to look pretty attractive.

*** Metro Performance Glass shares jumped 19% after the company said its Australian business was profitable in the four months through July.

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AFT reported a strong lift in revenue and earnings following sales growth and cost control in its diversified Australasian medicines business and growing sales of its Maxigesic drug.

Revenue for the year to 31 March 2020 increased 24% to $105.6 million from $85.1 million in the prior financial year, with revenue growing strongly in Australia (up 22%), New Zealand (up 12%) and Asia (up 130%). The international business, which is focused primarily on the commercialisation of Maxigesic was up 55%.

Net profit after tax rose to $12.7 million from a loss of $2.4 million in the same period a year ago, demonstrating the operating leverage present in our business

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Planning for your financial future while everything about work and life has changed drastically is causing you to wonder: How do you create & manage wealth in this new world? 

If you want to enjoy financial freedom then you have to understand how the stock market works, how to structure your portfolio, and how to handle different types of risks.

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The new restrictions cast a shadow over the NZ market as the NZ Prime Minister Jacinda Ardern announced that alert level 3 in Auckland would be extended for 12 days. 

She said there is nothing to suggest a move to alert level 4 was required.

The market was down 2.5% in early trading - its biggest fall in two months - but went up as investors processed the impacts of the lockdown and the Reserve Bank announced further stimulus which will support financial markets.

The shutdown will have a limited effect, at this stage, as it is not nationwide, and many companies have rebuilt their balance sheets to be more resilient.

Let’s review about the troubled stock AMP climbed 12% after reporting a special dividend and a $200 million share buyback programme after the sale of its life insurance division.

Sometimes, such an approach may indicate a company sees few opportunities to actually invest cash back into the business. 

Let’s talk about Heartland Group Holdings, a regional bank that may be exposed to mortgage defaults, fell 7%. However, ANZ and Westpac climbed 7% and 9% respectively.

That’s because they had dividend party in Australia! Westpac and ANZ led the rise in financials, after Commonwealth Bank of Australia reported their full year earnings, with a solid dividend. Despite their full-year cash profit falling, a robust balance sheet and the bank paying the maximum dividend allowed in this environment, the result is generally a positive sign for the sector. 

Next is Retail property investor Kiwi Property Group which declined 6%. Sylvia Park is a massive part of the company’s assets, so lockdown will have a big impact that investors are trying to price in. 

However, were you surprised by the traffic jams during Level 1 and Level 2? Not all people are working from home. We still go to offices and shops. Therefore, investors realise this virus will go away and commercial property will enjoy some demand. Yes, it won’t be 99% occupancy but still high enough to offer good return on investment.

Let’s talk about aged-care providers. Arvida and Oceania who saw some losses as investors were concerned about exposure to elderly communities which are at higher risk to covid-19. Arvida and Oceania had the sector’s biggest loss, falling 7%. However, the swift tightening of companies’ protocols who can enter the retirement village and other health & safety rules cushioned the stock falls.

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It is harder to borrow money for a rental property than for your own home. NZ Banks will follow certain guidelines to work out what you can afford to repay when we're borrowing money.

This webinar is presented by John Bolton from Squirrel mortgage brokers.

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The energy sector led the market lower after the mining company Rio Tinto shot down rumours it was planning to restart an aluminium production line closed earlier this year.

It was reported the line may be restarted as soon as September, prompting speculation the Tiwai Point aluminium smelter may remain open beyond its planned closure in August 2021.

Contact Energy is up nearly 4.5%

Just Life Group, which supplies water coolers, announced an increase in unaudited profit before tax of $3.9m for the year ending June 30, compared with $2.6m last year. Its share price increased by  10%. They used to sell mainly water but now it also does home ventilation and skylights. 

What are your thoughts about this company?

Turners & Growers Global Fresh produce exporter & importer Turners & Growers Global (T&G) posted strong growth figures in its first half of 2020. The stock price closed up 7.7% after a hefty amount of market reaction. Revenue was up by nearly 20% to $671 million, and net profit after tax was $9.5 million, more than double the previous first half's figure.

The positive result from T&G is interesting to compare to Scales, who operates in a very similar fashion and had far less positive results out this week.

T&G credits its success to a decision to ship apples early in the season to Europe and the UK, bypassing the logistical issues present during the Covid-19.

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IMPORTANT:

- The information does not constitute financial, accounting or legal advice and we cannot be held liable for any acts or omissions that arise from your use.

- Everything on this channel is for educational purposes only. It does not take into account your investment objectives, financial situation and personal needs.

- Past performance is not a guarantee of future returns. Before making any financial decisions, you should seek independent financial advice.

Although global unemployment has risen to alarming levels, household incomes have remained largely intact owing to substantial government response measures.

Global central banks are supporting government spending by keeping interest rates extremely low, buying financial assets (quantitative easing) and thereby facilitating increased government borrowing.

Consumers initially saved, but very quickly the income support from governments prompted spending. Unsurprisingly, much of this spending was online – US online sales have surged 30% compared to a year ago. 

Changes in consumer spending patterns have benefitted a small handful of high-profile stocks, for example Amazon, Apple and Google. 

Growth starved investors have bought these company shares, pushing prices to all-time highs. 

Quarterly profits announced by the four tech giants (Microsoft, Apple, Alphabet and Amazon) in July exceeded even optimistic investors’ expectations, demonstrating their dominance in this environment. 

The NZ share market was negatively impacted in July by the announcement of the closure of the Tiwai aluminium smelter, sending utility company shares lower. 

The Australian share market underperformed last month, likely due to the resurgence of COVID-19 cases in Victoria, tensions with China and a strong Australian dollar making shares look expensive to offshore investors. 

Looking ahead, there are several catalysts on the horizon. Company earnings will be released in Australia and NZ in August, revealing how well local companies have fared recently, and view their outlook over the next period of economic disruption.

Upcoming elections will come into focus in NZ and a couple of months later in the US. Given the significant role government policy has played in supporting the global economy, these elections will complicate the medium-term transition from government life support to an economy that can get back on its own two feet. 

Markets have outperformed our expectations over the past few months, but uncertainty remains high. 

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- Everything on this channel is for educational purposes only. It does not take into account your investment objectives, financial situation and personal needs.

- Past performance is not a guarantee of future returns. Before making any financial decisions, you should seek independent financial advice.

In the midst of a recession, country-wide lockdowns and with the growing pandemic, there's no reason for the markets to be performing as well as they have been in recent months. 

Are we heading toward a bursting asset bubble? Business Editor Liam Dann talks to Pie Funds CEO Mike Taylor.

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IMPORTANT:

- The information does not constitute financial, accounting or legal advice and we cannot be held liable for any acts or omissions that arise from your use.

- Everything on this channel is for educational purposes only. It does not take into account your investment objectives, financial situation and personal needs.

- Past performance is not a guarantee of future returns. Before making any financial decisions, you should seek independent financial advice.