Global markets were mixed overnight as markets generally traded in a tight range. Wall Street did manage to inch up to new highs as gains in Wal-Mart and Johnson & Johnson nudged the Dow Jones Industrial Average index to another record level.
Overnight minutes from the last US Federal Reserve meeting were released and a prolonged debate about the prospects of a pickup in inflation remained the key talking point. The market reaction was muted, and a December interest rate hike is very likely in the US. The Fed is also going to begin to reduce its large bond portfolio this month, which was mostly amassed following the global financial crisis.
Stock in Focus: Pushpay Holdings (PPH:NZ / PPH:AX)
Yesterday we touched on the fact that several software as a service companies have been in the headlines in recent times and that we see this as an interesting space to look for potential investments. Notably Xero has been on an amazing run, up +88% year to date. Not to be left behind is mobile commerce and electronic payments company Pushpay Holdings, which saw its shares jump +8% yesterday.
The mobile payments app company said annualised committed monthly revenue (ACMR) has jumped 96.8% and reiterated its target to break even on a monthly cash-flow basis before the end of 2018.
As we touched on last month, we are most interested to see if PPH is able to expand its operations outside of charities and churches to maintain its high levels of growth. The next logical progression would be sports clubs and organisations, in our view. Time as always will tell, but for now the share price performance has been impressive.
We do not currently have full research coverage on Pushpay.
Australia & New Zealand Market Movers
The Australian share market rallied on Wednesday (ASX 200 index +0.59%) to close at the highest level in nearly two months, as buying in the big four banks helped to lift the index. Another record night on Wall Street increased general global optimism for equities and that filtered down to the local level in Australia, with the ASX climbing back to a level it hasn't traded at since the middle of August.
The New Zealand market rose again yesterday (NZX 50 index +0.29%) hitting fresh highs as the export-orientated growth stocks A2 Milk and Xero once again extended recent gains, with the stocks up 88% and 257% year to date, ahead of the benchmark index's gain of 17%.
At the same insurer CBL Corp declined. CBL has made a technical adjustment to its minimum solvency capital, lifting it to $121 million from $107 million. Biotech firm Pacific Edge dropped -20% as it announced it wants to raise $21.3 million at 32 cents apiece in a deeply discounted rights issue.
3 Things Markets Will be Watching this Week
1. The NZ political situation and negotiations as a coalition government is formed now that all the special votes have been counted.
2. While markets have largely brushed off the geopolitical situation with North Korea, risks remain.
3. Minutes from the last US Federal Reserve Meeting are released on Thursday.
Have a Great Day,
Team