Global markets were up overnight, with US markets (S&P 500 +2.3%) partially offsetting yesterday's losses.
The uptick was led by the technology and energy sector, as oil prices lifted a bit after hitting record lows, and Congress looks to be on course to approve nearly $500 billion of additional aid to help small businesses.
US Treasury Secretary Steven Mnuchin announced he anticipates most of the economy will restart the end of August, which may be optimistic.
Spark New Zealand Limited (SPK:NZX / SPK:ASX)
Spark (SPK) shares were the best performing NZ stock yesterday up +4.7%, with the broader market selling off.
The Telco provider reaffirmed its operating earnings (EBITDAI) for the 2020 financial year to be between $1,100m and $1,120m and the dividend would remain unchanged at 25 cents per share for the full year.
Spark's core business remains unchanged, while broadband and phone usage have increased significantly, customers are generally on fixed fee plans (and customers will not be charged for over usage fees during this troubling period). A minor downside is loss of roaming charges, which represents about 5% of revenue.
We continue to remain BUY rated on Spark which continues to pay an attractive dividend yield
Australia & New Zealand Market Movers
The Australian market (ASX 200 -0.1%) initially fell heavily on Wednesday due to the oil price crash but managed to claw back higher, ending the day flat.
Logistics software company WiseTech shares surged +16%, after reaffirming its previous revenue and earnings guidance. Qantas shares were lower, on fears that the airline could possibly have to raise capital, due to concerns over future fuel contracts may require margin calls – which may have put additional cost pressure on Virgin to go into voluntary administration.
The NZ market (NZX 50 -1.1%) fell yesterday, continuing a marketwide sell off due to heightened concerns about the global economy.
A2 Milk shares were one of the few that were up, after announcing a positive trading update, with revenue for the third quarter above expectation driven by strong demand and changes in purchasing behaviour arising from covid-19, lifting their 2020 full year revenue and earnings guidance with margins improving as Chinese based sales are denoted in a stronger USD.
Air NZ shares were under pressure, possibly like Qantas due to concerns with margin calls on future fuel hedges.
3 Things Markets Will be Watching this Week
- Coronavirus related news-flow remains key in terms of market moves.
- US corporate earnings will be in focus with some big names reporting in the US, including Amazon and Netflix.
- Capital raising announcements by companies are growing as companies ask for cash from investors in this uncertain period.
Have a Great Day,