Global markets continued to climb higher overnight, extending the bull run with the Nasdaq (Technology Index) up +1.1%, breaking into fresh record highs. There has been no fresh news to break the rally, as investors become increasingly optimistic about an economic recovery as covid-19 related restrictions start to ease across the states and around the globe. The rallying is also continuing after monthly jobs data on Friday showed an unexpected fall in unemployment rate, bolstering views that the worst of the economic damage from the virus outbreak is over.
Closer to home, New Zealand prime minister Jacinda Arden announced New Zealand will be entering into level 1, meaning a shift back to normal business operations opening the local economy fully allowing bars cafes and clubs to operate normally and large gatherings like weddings and funerals would be allowed with no restrictions including large public gatherings like public transport, live sporting and concerts. International travel being the only restriction still in place, with a trans-tasman bubble possibly delayed (initially expected to be possible by July) given Australia still have transmission occurring.
Metlifecare (MET:NZX)
Retirement village operator Metlifecare (MET) shares were up +6.5% yesterday after issuing out a notice of meeting to ask shareholders to back its litigation against buyout suiter EQT. MET believe they have a strong case against EQT. EQT initially offered a $7 per share takeover bid, but have backed out executing their right to terminate as covid-19 is a "material adverse change". MET added that they remain on track to for their underlying net profit to be about $88m (for the 12 months ended 30 June 2020), which is down marginally from $90.5m in the previous year.
We remain BUY rated on MET as it still trades well below it's (Net tangible Asset) NTA of $6.97 per share.
Australia & New Zealand Market Movers
The Australian market was closed on Monday to as they celebrated Queens Birthday holiday.
The New Zealand market surged higher on Monday (NZX 50 Index +3.2%) on the back of positive US employment data as well as announcement of easing covid-19 restrictions, which saw the most beat company companies recovering the most, with Kathmandu leading the market up +11.5%.
Air NZ continued to climb higher as investors welcomed the 800 day plan, as the airline anticipated to operate at around 70% of its pre-covid-19 levels by 2022. Air NZ announced they would operate all domestic routes, and at the same time Jetstar announced it will recommence domestic in New Zealand travel from 1st July.
3 Things Markets Will be Watching this Week
- Once again, US-China trade tensions and covid-19 news-flow will remain top of mind.
- A decision by the US Federal Reserve will be made this week.
- Closer to home, Ryman Healthcare will release its full earnings on Friday while an AGM will be held by Stockland.
Have a Great Day,