Global markets were lower overnight as geopolitics once again impacted on investor sentiment. Possible US military action against Syria stoked investor concerns about geopolitical risks and minutes from the Federal Open Market Committee sparked worries about a more hawkish view on interest-rate increases.
US President Donald Trump tweeted that Russia needed to "get ready" for missiles hailing down on Syria. Oil surged to the highest since 2014, and gold futures also rose. Clearly markets are volatile right now, but as pointed out recently by JP Morgan CEO Jamie Dimon, “a geopolitical event can – but rarely does – upset the global economy”.
Overnight the US Federal Reserve released the minutes from its March meeting, which reconfirmed that the world's most important central bank is tilting towards accelerating its pace of interest rate increases.
A stock in the news yesterday was Pushpay – we had the CFO of Pushpay attend our recent investor workshop day, check out the video of the day by clicking HERE
Members can also see the full presentations online.
Stock in Focus: Pushpay (PPH:NZ / PPH:AX)
Shares in payments software company Pushpay (PPH) were lower yesterday following the release of its year end financial results.
Pushpay said said annualised committed monthly revenue fell 19% to US$86.4 million in the March quarter, coming off a high during the Christmas giving period. While this may have concerned the market, we are not so concerned as the company had previously flagged seasonality in payments given the tax year end in America. Revenue for the year doubled to US$70 million in the year ended March 31, which was in line with our expectations and those set previously by management.
While PPH’s customer growth may of disappointed some, this is also as the company has moved away from adding small churches in the year. While larger churches are harder to onboard, they should be more “sticky” clients, in our view. Overall while the result did not blow us away, we saw it as in line with our expectations.
We currently have a BUY recommendation on PPH.
Members should look out for a full update on PPH to be released in next week’s weekly report.
Australia & New Zealand Market Movers
The Australian share market sold off yesterday (ASX 200 index -0.48%) as investors sold out of a banking sector already under pressure after weeks of royal commission hearings. The sector has been under fire in recent weeks from a royal commission probe into business practices in the sector, which has contributed to the sector being down -5.6% for the year, significantly worse than the broader Australian market. In stock news, QBE Insurance will appoint Matt Mansour as its new group chief information officer, as new QBE CEO Pat Regan overhauls his senior leadership team.
The New Zealand market retraced on Wednesday (NZX 50 index -0.19%) led by Pushpay Holdings after the mobile app payments developer posted its first dip in quarterly revenue, while blue-chip stocks a2 Milk Co, Fletcher Building and Fisher & Paykel Healthcare declined. Infratil gained on upbeat earnings guidance. The infrastructure investor said 2018 earnings were at the top end of guidance at its investor day briefing, and that it is considering paying special dividends when it realises gains from its development investments to supplement ordinary returns. Infratil-controlled Trustpower and Tilt Renewables also advanced.
3 Things Markets Will be Watching this Week
1. Global politics remain in focus with tensions rising between the US and China as they impose trade tariffs on each other.
2. Earnings season begins in the US again later this week, with the major banks being first to announce quarterly profits.
3. Important US inflation (CPI) data is released on Thursday.
Have a Great Day,
Team