Global markets experienced another session in positive territory overnight with shares of technology and industrial companies pushing Wall Street’s main indexes higher, after Trump said he would delay a planned hike in tariffs on Chinese imports.
Closer to home, corporate earnings announcements across Australasia remain the focus for local investors, and we touch on some of the key results from yesterday below (with full reports on companies under our coverage to be released in our weekly report).
Stock in Focus: BetaShares Global Cyberseurity ETF (HACK:ASX)
The spectacular growth in online activity and information technology in recent years has, unfortunately, also seen equally strong growth in cybercrime. We have recently initiated research coverage on the HACK cybersecurity ETF (listed on the ASX).
Global cybersecurity is a growing industry driven by technological trends such as cloud networks, mobility, social interactions, and big data & analytics. Global spending on cybersecurity has increased at an annual rate of around 8% since 2011, and is estimated to be $US96 billion at the end of 2018. The area is an interesting high risk/reward investment space, and is aligned somewhat with our “explosion of data” investment theme. While not a “new idea”, we believe there will be multi-year tailwinds behind the sector over the medium-term.
Rather than try and pick stocks in the Cyber Security sector, an approach to benefit from the cybersecurity trends above is to invest into an industry ETF such as HACK.
We begin initiation on HACK with a BUY, but with a High-Risk caveat given recent Tech sector volatility, and recommend investors stage their purchases over time.
Australia & New Zealand Market Movers
The Australian share market was higher on Monday (ASX 200 index +0.31%) as earnings season is in full-swing. Among stocks to report was QBE Insurance, with its shares jumping as it posted a full-year net profit of $US390 million ($547 million) after shedding some of its overseas businesses and a reduction in the number of natural catastrophe claims. G8 Education shares fell heavily (although this is in the context of a strong run of late) after the childcare centre operator reported a weak full-year net profit result. The company cited lower first-half occupancy levels amid an increase in construction activity as the key reason behind the fall.
The New Zealand market started the week on a positive note (NZX 50 index +0.38%) as earnings season continues. Freightways shares were up after the courier and information management firm lifted first-half profit 6 percent. The company said the New Zealand and Australian markets remained positive, however, it was keeping close tabs on domestic economic activity for signs of a downturn. Meanwhile, Chorus reported a 3.3 percent decline in underlying earnings as copper-line customers converted to fibre products on other local fibre companies. Metlifecare dropped after the retirement village operator reporting a smaller gain in the value of its property portfolio, which led to a decline in first-half profit. Delegat Group gained after the winemaker once again reported record operating earnings.
3 Things Markets Will be Watching this Week
- US-China trade deal related new-flow remains a focus for investors.
- Local earnings season continues across NZ and Australia this week.
- US Federal Reserve chairman Jerome Powell will give two days of testimony to US lawmakers on Wednesday.
Have a Great Day,