Global markets were mixed on Friday, US Markets (S&P 500 Index, +0.01%) ending a volatile session flat after briefly touching bear market territory to rebound earlier losses – to note the S&P500 continues its slide lower now reporting its 7th weekly loss in a row.
Tech shares continue their descend the NASDAQ down -0.3% and well into bear territory down -30% from its high. Consumer staples was the worst performing sector given a wave of weak earnings from major retailers as they struggle with costs inflation and weakening demand outlook highlighting consumer strength is weakening.
European markets (Stoxx 600 index, +0.5%) closed higher, as travel and leisure shares lead gains with most sectors trading higher. UK retail sales for the month of April rose +1.4% over the previous month, helped prompting some positivity for investors.
Closer to home, the RBNZ will make its monetary policy decision on Wednesday, market anticipating a 50 basis point rate increase in the OCR lifting it to 2.00% as bringing down inflation becomes the primary focus for central banks around the globe.
Ryman Healthcare (RYM:NZX)
Ryman Healthcare shares jumped +7.8% after its result wasn’t as bad as feared, given the stock had sold heavily recently. Underling net profit rose +13.6% from last year to $255m – which excludes unrealised revaluation gains. Total assets rose from $9.17 billion to $10.97 billion, achieving a revaluation gain of $467.1m (doubling the gain in the previous year) and resulted in a reported net profit of $692.9m.
Net tangible assets rose $7.11 per share, and due to higher asset base gearing slipped down to 42% but we believe this is still a high level of debt (which restricts their ability to fuel future growth).
We are HOLD rated on Ryman, considering it trades at the highest premium compared to its peers 1.39x above its net tangible asset per share and with high level of debt, we believe have the lowest growth opportunity ahead.
Australia & New Zealand Market Movers
The Australian market was up on Friday (ASX200 index, +1.2%) to report its first weekly gain since April.
Australian markets getting some support from its recent sell-off from news in China who cut its key interest rate to help support its troubled property market which saw Australian mining stocks perform well.
All sectors traded higher except for energy and real estate, with tech shares staging a strong recovery rally.
The New Zealand market (NZX 50 index, +0.5%) was up on Friday, helped by strong earnings setting a more positive tone for investors.
My Food Bag jumped +7.6%, after delivering an inline result. Oceania healthcare was up +1% on its result, reporting a +16.2% increase in operating earnings (EBITDA), and net asset per share of $1.28, up +$0.10 from last year.
Infratil rose another +0.6%, following its upbeat result, and strong asset revaluation.
3 Things Markets will be Watching this Week
- Geopolitical risks remain elevated given the Russia/Ukraine conflict.
- RNBZ monetary policy decision
- Local earnings from Kiwi Property Group, Arvida, Fisher & Paykel Healthcare, Pacific Edge, Mainfreight, Tower Insurance, Elders, and Select Harvest.