June Market Surge | Tourism Holdings Raise

1 July 2019

Global markets​ rallied on Friday, as shares on Wall Street advanced with the S&P 500 and the Dow closing the book on their best June in generations, ahead of much-anticipated trade talks at the G20 summit in Japan. Closer to home, both the Aussie and Kiwi stock markets also had a strong June, up +3.5% and +3.8% for the month respectively. 

Markets will likely be bolstered by the weekend US-China trade truce news. Presidents Donald Trump and Xi Jinping agreed to renew efforts to resolve the trade dispute between their two nations during a meeting at the G20 in Japan. Trump said US companies would be allowed to sell their equipment to Huawei, and opened the door to further concessions later.
 

Stock in Focus: Tourism Holdings (THL:NZX)

​​​​​​​​​​​​​​​​​​​​​THL ​shares remain under pressure after it announced an $80m equity issue designed to provide Balance Sheet headroom and flexibility, and simultaneously has updated profit guidance for 2019 to be between $25m–27m (previous guidance was $25-28m),

​There has been a $30m placement​ to Citic Capital who will now get a seat on the THL board, and a $50m rights issue. This is designed to provide Balance Sheet strength and help fund TH2 opportunities. ​ Given current difficulties faced by THL in the US market, the raise seems to make sense. 

We currently have a BUY recommendation on ​THL​.
Members should look out for a full update on THL to be released in our weekly report. 

 
Australia & New Zealand Market Movers

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​The Australian share market ​experienced losses on Friday (ASX 200 index ​-​0.71%) but the ASX still managed to end the month with a+3.5% gain. Australian shares are poised to open higher to start the new fiscal year, bolstered by the weekend US-China trade truce and with investors positioning for a rate cut as soon as tomorrow.

 
The New Zealand market ​rallied on Friday (NZX 50 index +0.​67​%)​ as the NZX Index rounded out a​ +3.8%​ gain in the June, with demand for infrastructure, utilities, and property firms driving the benchmark to another record.​ Interestingly, the Reserve Bank’s May lending figures are out and they show that, for the first time ever, first homes buyers borrowed more than investors did.

 

3 Things Markets Will be Watching this Week

  1. ​​​​​​​Trade related news flow is likely to remain in the headlines.​
  2. The Reserve Bank of Australia makes an interest rate decision on Tuesday.
  3. ​F​riday​'​s US nonfarm payrolls​ (employment figures) will be​ the key even​t in terms of economic data​.
     

Have a Great Day,
 

Team

Wall Street advanced with the S&P 500 and the Dow closing the book on their best June in generations, ahead of much-anticipated trade talks at the G20 summit in Japan.

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