New Zealand Market Movers
The New Zealand market (NZX 50 Index, -0.2%) edged down on Monday on very light trading. Serko (+8.7%) jumped after upgrading its revenue guidance for the 2023 financial year. Total income is now expected to be in the range of $42 million to $47 million, up from 2022’s $18.9 million. Genesis Energy (+1.3%) advanced after announcing that customer numbers had increased by 2.5% compared to this time last year, to 481,000.
Australia Market Movers
The Australian market (ASX 200 Index, +0.1%) edged up slightly on gains in tech (+1.3%) offsetting losses in Utilities (-0.5%) and Healthcare (-0.2%).
According to UBS, food prices at Australian supermarkets Woolworths and Coles rose an average +9.2% in October-December 2022 year-over-year up from the +8.2% recorded in the previous three months.
Europe Market Movers
European markets (Stoxx 600 Index, +0.5%) advanced to start the week with tech stocks (+2.2%) leading gains.
Economists surveyed by Consensus Economics are now predicting the Euro Area will avoid recession this year, and forecasts growth of +0.1% in 2023.
US Market Movers
US markets (S&P 500 Index +1.2%) rose as markets anticipate a less aggressive rate hikes by the Fed.
Semiconductor stocks were a winner on the day, Advanced Micro Devices (+9.2%), Qualcomm (+6.6%), and Nvidia (+7.6%) up strongly, as well as Tesla (+7.7%) and Apple (+2.4%) register healthy gains on the day on hopes China reopening would boost business operations.
Stock in Focus: De.Mem (DEM.ASX)
Wastewater treatment company De.mem shares jumped +25% yesterday after revealing their fourth quarter operations. Cash receipts came in at $6.7m for the quarter, and $22.9m for the year, both at record highs with 15 consecutive quarters of cash receipt growth. Recurring revenue growth was also strong for the year up +41% from the previous year to $19.5m (on the top end of guidance) and representing 85% of total cash receipts at higher margins.
This resulted in operating cashflow earnings of $203,000, looking ahead the company expects to maintain strong top line revenue growth and now increase its focus on profitability.
We still maintain a favourable view on De.mem over the medium to long-term earnings, and this result of profitability has helped build some confidence for investors. We are confident De.mem can continue top line growth at a healthy double-digit level and for that reason we remain BUY rated.
What Markets will be Watching this Week (UTC +13)
Monday
NZ Westpac Consumer Confidence DEC
Tuesday
NZ Balance of Trade NOV
NZ ANZ Business Confidence DEC
AU RBA Minutes of Dec Policy Meeting
Earnings From Microsoft. Johnson & Johnson,
Auckland International Airport Monthly Traffic Update
Wednesday
EU Consumer Confidence DEC
CPI (Inflation) data for Australia and New Zealand
Earnings from Tesla
Quarterly updates from Fortescue, Woodside Energy and Mineral Resources
Thursday
GB GDP Growth Rate YoY Final Q3
Bank of Canada Interest rate decision
Earnings from Visa, LMVH, Mastercard
Friday
US Chicago Fed National Activity Index NOV
US fourth Quarter GDP
Earnings from ResMed
Saturday
US Durable Goods Orders MoM NOV