Pavan Sharma

The New Zealand market (NZX 50 Index, -0.9%) fell on Wednesday after the Reserve Bank of New Zealand decided on a 75-basis-points rate hike (touting the possibility of a 100-point hike) taking the Official Cash Rate (OCR) to 4.25%. Further, the Reserve Bank now expects the OCR to peak at 5.5%, much higher than the 4.1% peak they had signalled 3 months ago.  

Technical Analysis: Auckland International Airport Shares have rebounded strongly on the back of a recovery in international travel. While not quite at pre-covid highs of $9.85, at levels of above $7.80 is still elevated and does not consider the higher interest rate environment meaning it will be harder to justify pre-covid valuations even if Interntional travel had recovered fully (which is still some time away)

The New Zealand market (NZX 50 Index, -0.2%) fell slightly on Tuesday, with Ryman Healthcare (-7.1%) dragging the index lower. As noted in an earlier report, The company is experiencing cashflow issues arising from a less liquid housing market meant net debt rose +$400m over the half to $3 billion.

Ebos shares have climbed higher recently following its entry into the MSCI Word Index seeing large amounts of passive buying. EBOS remains our most preferred healthcare stock in NZ, the stock has now broke over $40 a share again and we think it is an opportune time for investors to take ‘some’ profit given its ‘fair valuation’ and heightened volatility in the markets it is unlikely to hold up for so long like it has done so in the past. 

Technical Analysis: EBOS shares have been range bound the last year, following a strong multiyear run. We see the stock peak at $44.30, and break past $40.00 a share and can be viewed as an opportune time to take some profit. Given the fundamentals of the business remain strong, we feel comfortable Buying at or below $38.20, as it is viewed as a table support level.

The New Zealand market (NZX 50 Index, +0.5%) advanced on Monday, with Financials (+2.6%) far outperforming other sectors. The catalyst for the sectors performance is of course the Reserve Bank of New Zealand delivering another interest rate hike this Wednesday at 2.00pm. Markets are expecting a 75-basis-points hike, taking the Official Cash Rate to 4.25%, although a 50-basis-points hike is entirely possible. 

TJX reported EPS of 91 cents vs. analyst estimates of 80 cents, whilst revenue slid -2.9% to $12.17B. We reiterate our buy rating for the company – its differentiated cut-price business model and strong stock-handling policy makes it a durable business as we enter a quarter with mixed retail data. Also evident on its performance around GFC and stronger bounce back after.