Pavan Sharma

The New Zealand market (NZX 50 Index, -0.4%) fell on Tuesday without much market news to digest. WasteCo Group (-15.8%) tanked to $0.08 on its first day on the NZX. Black Pearl Group (-39.2%) fell dramatically for the third day in a row, and now trades at less than half of its listing price. Summerset (-0.1%) announced that director Anne Urlwin will retire from its board in February 2023 to join the board at Infratil (-1.0%). 

Macquarie Group have recovered strongly since bottoming out to fresh 12-month lows in October, and have continued to trade higher after reporting an interim half-year net profit of $2.3 billion, which is a -13% decline on its previous half-year period, but +13% percent higher than the half-year profit it reported this time last year – benefits of its diversified source of earnings helping a lot within a challenging environment. Looking forward, Macquarie Chief Shemara Wikramanayake said the company would maintain “a conservative approach” but was on the lookout for investment opportunities for its $30 billion in “dry powder”.

US markets (S&P 500 Index -1.8%) declined on Monday, while 10Y Treasury Bond Yields (+0.1%) advanced above 3.6%, as investors consider the recent 2 weeks of gains in equity markets as overdone given risks awaiting 2023. 

The New Zealand market (NZX 50 Index, -0.1%) fell marginally on Friday, but finished the week up +2.5%. The weekly advance is largely thanks to Fisher & Paykel Healthcare’s (-1.1%) weekly gain of +16.8%, although the stock fell on Friday on the back of better-than-expected result. Gentrack (+1.2%) continued its advance, bringing its weekly gain to +46.8%.  

We initiate coverage of Home Depot with a HOLD rating. The company is engaged in selling home building, hardware and DIY supplies to both professionals and retail consumers. The company maintains +2,300 stores (vs. +1,700 for its largest competitor, Lowes) and is mainly domiciled in the U.S. 45% of sales come from professional trades vs. 55% from retail consumers.

The New Zealand market (NZX 50 Index, +0.9%) rose on optimism that the US central bank can start to slow the pace of rate hikes. The New Zealand dollar also found support and is now trading at a three-month high against the US dollar ($0.6363) and an eight-month high against the Australian dollar ($0.93.58).  

Pacific Edge shares fell –3% on its half year result which provided little surprises and reiterating business as usual with strong growth in the business continuing. Operating revenue rose +62% from last year to $8.7m, while increased investment into growth meant net loss rose from -$9m to -$10.6m, implying a cash burn of around $2m per month, with cash and cash equivalents of $93.5m plenty of reserves for continued investment into growth. 

The New Zealand market (NZX 50 Index, +1.4%) climbed on Wednesday on heavy end-of-month turnover. Ebos (+1.9%) was the most traded stock on the day as it entered the MSCI Small Cap index. Gentrack (+19.0%) soared for a second day on its report that revenue rose +19.3% for the 12 months ended September 30. Fisher & Paykel Healthcare (+3.5%) also advanced for a second day after positive market news.