Global markets were higher overnight, as shares on Wall Street rose on the back of strong earnings from Netflix and Morgan Stanley, with the prospect of Britain making a last-minute deal with the European Union adding to the upbeat mood.
This week's podcast is: Spark versus Sky TV sport battle – to listen CLICK HERE.
Stock in Focus: Wisetech Global (WTC:ASX)
WTC shares were placed into a trading halt as the high flying tech stock came under attack from a short seller.
Research house J Capital alleged WTC is overstating its profit and revenue, saying "WiseTech is using uniquely confusing accounting strategies to exaggerate growth and income," said analyst Anne Stevenson-Yang in a report titled The Illusion of Success. She said the $10.6 billion company could have overstated its profits by 178%, cumulatively, since the 2016 financial year.
WTC has yet to make a formal response and we will await the announcment from the company. We would also note that short seller reports should be taken with a grain of salt, as the writers make money when the share price falls.
We currently have a HOLD rating on WTC.
Australia & New Zealand Market Movers
The Australian market sold off yesterday (ASX 200 Index -0.77%), breaking a recent winning streak amid weak production updates from the resources sector. BHP said the production of petroleum, copper, iron ore, metallurgical coal, energy coal, and nickel were all down on the previous period. Woodside Petroleum said its third-quarter revenue was flat as weak LNG prices offset higher output from its Pluto and Greater Enfield liquefied natural gas projects.
For the 12 months ended August 31, Bank of Queensland posted cash earnings after tax of $320 million. This was a 14% decline on the prior corresponding period and has fallen short of expectations. The result showed the challenges for smaller players given a mounting regulatory cost burden without the scale to spread the pain.
The New Zealand market was lower yesterday (NZX 50 Index -0.33%) with index heavyweights such as Fisher & Paykel Healthcare giving back some of its recent gains. Sky Network Television's annual meeting was the major focus, with shareholders signing off on plans to secure New Zealand Rugby's broadcasting rights and allowing the equity component of the up to US$40 million RugbyPass acquisition. CEO Martin Stewart told shareholders at yesterday’s AGM that SkyTV bid 50% higher than its current deal for the domestic cricket rights, but still lost out to Spark.
3 Things Markets Will be Watching this Week
- US earnings season for the 3rd quarter kicks off this week, with the major US Banks the first to report quarterly profits.
- Minutes from the last RBA meeting are released on Tuesday
- A host of Chinese economic figures are published on Monday.
Have a Great Day,