Global Markets were lower overnight, taking a breather from the recent rally with major markets dragged down by technology heavyweights. Japan reported two deaths and South Korea confirmed its first fatality, causing further concern around the impact of coronavirus. Another report suggested the virus was spreading in Beijing.
Stock in Focus: EBOS Group (EBO:NZX / EBO:ASX)
Ebos led the NZ market higher yesterday, rising 3.4% as the pharmaceuticals distributor reported a first-half profit of $81.7 million, up from $67 million a year earlier, as the impact of winning the Chemist Warehouse Group contract kicked in from July. It lifted its interim dividend 8.7 percent to 37.5 cents per share.
The result was pleasing for us and better than the market had had anticipated, impressing with a strong outlook.
We currently have a BUY rating on EBOS.
Members should look out for a full update on EBOS to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian market added to gains on Thursday (ASX 200 Index +0.25%) with equities pushing higher on increased expectations of another rate cut from the Reserve Bank of Australia following soft employment numbers.
Coca Cola Amatil shares jumped +8% as it provided 2020 earnings guidance along with the release of its 2019 full-year results. The beverage giant said it expects mid-single digit earnings per share growth this year after reporting a net profit after tax of $374.4 million for calendar 2019, up by 34% per cent on the prior year. Qantas released results along with warning of a hit to earnings because of the outbreak of the Covid-19 virus. Its shares closed up 5%, however, after the company reported first-half underlying profit before tax of $771 million. Shares in Wisetech continued to plummet, putting pressure on the technology sector.
The New Zealand market rallied to a fresh all-time high yesterday (NZX50 +0.62%) as the NZX 50 index broke through 12,000 for the first time after Ebos Group and Auckland International Airport reported strong half-year earnings. Auckland International Airport rose after it reported a 2.2% lift in first-half underlying profit and trimmed full-year guidance by $5 million due to the covid-19 virus. Given fears around the impact of Cornoavirus on the Airport, the announcement saw a relief rally. Qantas Airways said it will reduce flights across Asia – including to New Zealand – due to covid-19 raising speculation Air New Zealand could pick up some slack.
3 Things Markets Will be Watching this Week
- Local earnings season continues across Australia & New Zealand this week.
- Minutes from the last US Federal Reserve meeting are released.
- US housing data and the latest employment picture in Australia.
Have a Great Day,