News

The New Zealand market (NZX 50 Index, +0.6%) lifted on Tuesday despite annual inflation coming in at 7.2% for the September quarter, when the market expected a figure closer to 6.5%. Markets are now beginning to price in the possibility of a 75-basis-points rate hike from the Reserve Bank of New Zealand in November, with a 50-basis-points hike or more almost certain. 

Costa Group shares plunged lower, after the fruit and vegetable grower released a disappointing update, saying 2022 full year earnings would come in only a touch higher than the previous year – a big downgrade from earlier which implied strong growth on top of a challenging year in 2021. This implies a weak second half, driven by adverse weather conditions, lowering citrus crop quality and pack out rates, given the recent acquisition and the citrus business making up a larger portion of Costa’s earnings.

The New Zealand market (NZX 50 Index -0.8%) fell in the lead up to the release of the country’s inflation data, due today at 10:45 am NZDT.  Tower (+5.7%) surged after announcing its annual underlying profit was about NZ$40m in the year ended Sept 30, beating forecasts by ~30%, and improving on last year’s underlying profit of NZ$30.8m. 

The New Zealand market (NZX 50 Index, +0.5%) rose on Friday, following the US markets’ Thursday rally. Fonterra (+1.7%, Shareholders’ Fund Units) trimmed its milk collection forecast by -1.0% to 1,480 million kilograms of milk solids due to “variable weather conditions…contributing to lower collections through September and early October”. A2 Milk (-2.5%) and Synlait Milk (-0.6%) moved in the opposite direction on Friday. 

We initiate coverage of Estée Lauder Companies (NYSE: EL) with a BUY (underweight) rating. The company is engaged in creating and selling high quality cosmetics, skincare, and perfumes. We think the company is best-in-class in its industry and acts as a compliment to a portfolio which is exposed to the rise of luxury and consumer disc. purchases.

The New Zealand market (NZX 50 Index, -0.5%) fell in the lead up to US CPI data. Napier Port (-1.4%) fell after reporting it had approved an on-market share buyback programme over 12 months, beginning next week, for up to 5% or 125,000 of its ordinary shares. Additionally, the port operator reported its second highest annual total cargo movement volume, although this represents a decline of -7.9% for the year ending September. 

The New Zealand market (NZX 50 Index, -0.8%) fell on Wednesday but not without a few bright spots occurring in the market. NZX (+2.6%) reaped gains on a market update that Westpac (+2.9%) director Rob Hamilton will become its new chair beginning April 2023 and Datacom’s current CFO will join the board. 

We initiate coverage of Mastercard Inc (NYSE: MA) with a BUY rating. The company offers a payment network which is accepted globally by +40 million merchants. Together with Visa (NYSE: V) the two form a payment network duopoly. We see the primary drivers for Mastercard’s success as rising global incomes and a continued shift to a cashless society.