Global markets were higher overnight as stronger-than-expected US economic growth data outweighed concerns around escalating tensions between the US and North Korea.
Wall Street advanced on signs the US economic expansion is gathering momentum with the latest reading on US growth setting a 3% annual pace in the June quarter, creating renewed optimism around the outlook. In addition, President Donald Trump has put forward a renewed case for lower taxes, holding fast to his objective of lowering the US corporate tax rate to 15%.
It was a full-on week last week in terms of earnings announcements across Australia and New Zealand. Profit announcements have continued this week at a slower pace as we are moving into the tail-end of earnings season.
Stock in Focus: Delegat’s (DGL.NZ)
New Zealand's largest listed winemaker Delegat’s, was one of the company’s which reported solid profits this week reporting a 6% gain in operating profit to a record and said it expects to achieve at least as much in the 2018 year, subject to foreign exchange movements.
Looking at some of the details, operating profit was $38.5 million in the 12 months ended June 30, meeting its July 17 guidance and up from $36.2 million a year earlier. Sales rose 3% to $247.7 million as the volume of sales increased 10 percent and the value fell 7%. Of the drop in value, 4% related to foreign exchange movements and 3% to the company's underlying price/product mix.
Overall we saw it as another solid result from the company as it looks to build a leading global super premium wine company and leverages its key brands including Oyster Bay.
We are currently BUY rated on Delegat’s.
Members should look out for our full update on Delegat’s to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market was flat on Wednesday (ASX 200 index +0.01%) as shares wobbled between gains and losses and the ASX failed to join in on a region-wide rebound, weighed down by a sharp fall in Telstra as it traded ex-dividend and more selling in the big banks. Telstra weighed the heaviest on the benchmark as the stock traded without the right to its final dividend and shareholders can now look forward to lower pay-outs, as flagged by the giant telco's management last week. In other stock new, investors were unimpressed with the annual earnings release from hospital operator Ramsay Healthcare.
The New Zealand market rebounded yesterday (NZX 50 index +0.48%) with Metro Performance Glass leading the index up while Contact Energy dropped. In terms of other stock news, Spark shares were higher following a broadband announcement, as its joint bid with Vodafone and 2degrees was awarded the $150 million tender to extend rural broadband and provide mobile coverage for black spots in locations favoured by tourists and along the state highway network.
3 Things Markets Will be Watching this Week
1. Corporate profits will be in focus as earnings season continues across Australia and NZ.
2. US politics as investors are concerned around the Trump Administration’s ability to pursue its pro-growth agenda.
3. Closely watched monthly US employment and manufacturing data is released at the end of the week.
Have a Great Day,
Team