Global markets were mixed overnight as European markets were slightly lower while the US market added to gains over the day. Technology, Financials, and Mining sector stocks lifted the market overnight as central bankers in Europe, England and Canada expressed optimism about the economic outlook. The price of iron ore made strong gains for the second day and has now rebounded +10% this week which is supporting the mining sector.
Closer to home, the NZ market was little changed yesterday while the Australian market rallied higher as a rebound across the miners offset weak global sentiment.
Stock in Focus: SkyCity Entertainment (SKC.NZ / SKC.AX)
SkyCity shares fell sharply yesterday as it announced that Chairman Chris Moller will retire from the casino board at the end of this year after nine years as a director, to be replaced by its new director Rob Campbell.
Moller said that "By the time I retire, I will have been a director of the company for nine years and chairman for five years and I consider this to be an appropriate time in the case of SkyCity to invite the board to refresh its leadership". do not see this as necessarily a negative announcement.
It seems the fall in SKC shares was driven by a large trade of over 35m shares, which put downward pressure on the stock price yesterday. Overall our investment case around SKC remains very much intact as we see the company as a beneficiary of our tourism boom investment theme.
We are currently BUY rated on SKC as a beneficiary of the Australasian Tourism Boom.
Australia & New Zealand Market Movers
The Australian share market rallied on Wednesday (ASX 200 index +0.73%) led by a strong jump across the miners which offset weak global sentiment. In terms of news flow a S&P Global Rating credit analyst said the outlook for miners in the Asia-Pacific region had improved, while the price of iron ore continued to recover. While the likes of BHP, Rio Tinto & Fortescue moved higher, share in the gold miners such as Newcrest Mining were sold-off. The Banks were also higher, while Insurer IAG jumped to an all-time high after it upgraded its profit margin guidance.
The New Zealand market was more or less flat on Wednesday (NZX 50 index -0.02%) with most bigger name stocks in the market rising with the exception of SkyCity. Retirement village Summerset led the index as it announced a profit guidance upgrade. Tegel Group was also significantly higher a day after reporting its annual result, and there was also news out of Australia that there has been some consolidation in the price war between Inghams and Tegel.
3 Things Markets Will be Watching this Week
1. Whether the Oil price stabilises after falling for 5 straight weeks
2. US Fed Chair Janet Yellen speaks in London on Tuesday.
3. NZ trade data is released Tuesday.
Have a Great Day,
Team