Global markets remained mixed overnight amid conflicting reports on the prospect of a trade truce being reached this weekend at the G20 meeting in Japan between the US and China.
In today's podcast, Jeremy discusses a number of NZX stocks which have updated recently: NZ King Salmon, Greencross Health, Fletcher Building, Mainfreight and TIL Logistics.
To listen to the full episode CLICK HERE
Stock in Focus: Fletcher Building (FBU:NZX / FBU:ASX)
As we touched on yesterday, Fletcher Building held an investor briefing in which it confirmed a capital return and noted Australian trading conditions remain tough.
The company unveiled plans to buy back as much as $300 million of stock, affirmed its annual earnings and dividend, and said it doesn't expect to lift its provisioning for the troubled Building + Interiors (commercial construction) division that experienced a cost blow-out in recent years. However, the composition of earnings seems to be a concern for investors, with weaker margins than expected in the Australian business and extra costs in the New Zealand arm.
Our view remains largely unchanged, in that FBU look like a multi-year turnaround play, although there are still considerable execution risks given the slowdown in Australian construction activity and major unfinished projects such as Commercial Bay.
We currently have a BUY (High-Risk) recommendation on FBU.
Members should look out for a full update on FBU to be released in our weekly report
Australia & New Zealand Market Movers
The Australian share market was higher yesterday (ASX 200 index +0.39%) with iron ore miners lifting the market. Bubs Australia shares jumped after penning a strategic partnership with China's number one baby store chain Kidswant. The partnership will make Bubs products available in 275 Kidswant stores with sales of $6 million expected within the first fiscal year.
The New Zealand market was in positive territory on Thursday (NZX 50 index +0.22%) as companies offering reliable dividends remain attractive in the persistently low interest rate environment. Genesis Energy and Auckland International Airport hit records. Outside the benchmark index, TIL Logistics fell after trimming annual earnings guidance due to earlier relocation costs than expected.
3 Things Markets Will be Watching this Week
- The G20 Meeting takes place on Friday & Saturday.
- The Reserve Bank of New Zealand makes an interest rate decision on Wednesday.
- There is an OPEC meeting on Tuesday.
Have a Great Day,