Global markets were mixed overnight as the US market traded in a tight range, a return to relative calm after a few hectic sessions.
Corporate profits across Australia and NZ will remain a focus locally, and early signs are that earnings are generally supporting both the ASX & NZX.
Stock in Focus: ANZ Bank (ANZ.AX / ANZ.NZ)
Shares in Australia and New Zealand Banking Group were higher yesterday as the bank revealed a cash profit of $1.79 billion for the 3rd quarter of the financial year.
Cash profit was up 5.3% or 0.3% before provisions for bad debts, with total revenues for the quarter down 0.3%. ANZ’s important net interest margin remained flat, with customer deposit growth up 2.3% and net lending growth of 2%.
The group’s chief executive is continuing to restructure the business via operational divestments in Asia and across its capital-intensive life insurance business. Elsewhere cost cutting is being implemented as the bank attempts to lead the way in adjusting to the digital future of banking.
Overall, we saw the announcement as a solid result, and continue to rate ANZ as an attractive investment particularly given the prospect of potential return of capital to shareholders and a heathy dividend yield of over 5%.
We are currently BUY rated on ANZ, and it remains our most preferred of the Big 4 Aussie Banks. Members should look out for our full report on ANZ to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market was higher on Tuesday (ASX 200 index +0.47%) as global sentiment improved and ANZ’s result helped lift the market. The big news yesterday was Domino’s Pizza, which saw its share plunge -18% as its full year profit figures came well below expectations.
The New Zealand market continued to rally on Tuesday (NZX 50 index +0.67%) led by Contact Energy for a second day as upbeat earnings bolstered the power company, while Summerset Group's result boosted demand for its shares. Summerset, New Zealand's second-largest retirement village developer posted a 45 percent gain in first-half underlying earnings to $35.7 million and reiterated that full-year profit may increase by a third as it ramps up development.
3 Things Markets Will be Watching this Week
1. Corporate profits will be in focus as earnings season continues across Australia, NZ and the US.
2. The geopolitical situation as tensions remain high between the US and North Korea.
3. The Reserve Bank of Australia release minutes from its last meeting n Monday.
Have a Great Day,
Team