Global markets were mixed once again overnight, with Wall Street erasing most of its decline in afternoon trade as Banks and insurers had weighed on the market as hurricane Irma threatened to bring catastrophic damage to the Miami area.
In other news, Treasury Secretary Steven Mnuchin and House of Representatives Speaker Paul Ryan expressed confidence on that Congress will pass an overhaul of the US tax code by the end of this year, a major but elusive goal for President Donald Trump and his fellow Republicans.
Stock in Focus: Tegel Group (TGH.NZ / TGH.AX)
Tegel New Zealand's biggest poultry producer, yesterday reiterated that it expects this year's underlying earnings to be ahead of last year's as it benefits from population growth and protein competition that still favours poultry.
"Domestic volume and market growth is underpinned by increased poultry consumption of around 5 percent since 1990. We see those trends continuing and they will impact favourably on our business," said chief executive Phil Hand in speech notes published ahead of the annual general meeting. Tegel currently has a 52 percent domestic market share and it expects to retain that position in the current financial year. It says chicken is a much "more affordable option for consumers" than beef and lamb and now commands 53 percent of 'share of plate', double what it was 16 years ago.
Recent data has shown the chicken supply glut in NZ is easing and Tegel shares have recovered from their lows while also paying an attractive dividend. We have remained positive on the Tegel investment case as a medium term agricultural play.
Members should look out for a full update on Tegel to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market was flat on Thursday (ASX 200 index 0.00%) as solid early gains evaporated along with fresh developments around North Korea and Hurricane Irma. Shares in Telstra rebounded yesterday after what has been a significant share price fall in recent times. What appears to have caused the move higher was an upgrade to buy rating by a broker on valuation grounds – the broker community is now evenly split on the stock with six buys, six holds and six sells.
The New Zealand market was slightly higher yesterday (NZX 50 index +0.2%) with Sky Network Television continuing yesterday's rebound while Air New Zealand and Trade Me Group declined after giving up dividend rights. The upcoming election appears to be creating uncertainty for investors, with the latest polls showing Labour is ahead of the National party pointing to a potential change in government.
3 Things Markets Will be Watching this Week
1. The Reserve Bank of Australia makes an interest rate decision on Tuesday.
2. Australian economic growth (GDP) data is set to be released on Wednesday.
3. US politics as investors are concerned around the Trump Administration’s ability to pursue its pro-growth agenda.
Have a Great Day,
Team