New Zealand Market Movers
The New Zealand market (NZX 50 Index, -0.3%) declined on Friday and was closed for trading Yesterday in observance of Labour Day.
Serko (-3.65) and Oceania Healthcare (-3.5%) led the top 50 lower on Friday. Mainfreight (+3.1%), on the other hand, spiked after announcing that it now expects its 2023 first-half revenue to be $3.01 billion, a 32.5% improvement on its previous forecast. Additionally, its profit before tax is expected to now be $301.7 million, up by 65.8% on its previous estimate. Mainfreight releases its earnings report on Thursday, 10 November 2022.
Australia Market Movers
The Australian market (ASX 200 Index, +1.5%) advanced on Monday in a broad-based rally. All sectors closed in positive territory with Materials (+2.5%) and IT (+2.3%) leading the gains.
The Australian market was buoyed by the release of China’s annual gross domestic product (GDP) report for the September quarter (+3.9%), which came in higher than the +3.4% expected. The GDP data was originally due on October 18 but was delayed until after the conclusion of 20th National Congress of the Chinese Communist Party, where President Xi Jinping secured a historic third term as the nation’s leader.
Europe Market Movers
European markets (Stoxx 600 Index, +1.4%) advanced on leads in Utilities lead gains. In other news, Rishi Sunak is set to become the new Prime Minister of the UK after rivals for the top job drop out of the race (Penny Mordaunt) or fail to through their hat in the ring (Boris Johnson). Sunak is expected to be appointed by King Charles in the next few days.
US Market Movers
US markets (S&P 500 Index +1.2%) got off to a shaky start but eventually added to gains made last week on Monday.
US-listed Chinese tech stocks were hit hard again on Monday. Pinduoduo (24.6%), Nio (-15.7%), and Alibaba (-12.5%) are all concerns for investors after President Xi Jinping’s tightened his grip on power.
Investors will turn their attention to the earnings from mega-caps this week including Microsoft, Alphabet, Visa, Coca-Cola, Meta Platforms, Boeing, Apple, Amazon, McDonalds, Starbucks, and Exxon Mobil. There are several potentially market-moving events offshore this week. Besides the Bank of Japan meeting (no change in policy expected), the Bank of Canada and ECB are expected to raise rates by 75bps, to 4% and 1.5% respectively. In Australia, the market is looking for another strong CPI release, with headline inflation expected to increase to 7% year on year. Please see our economic calendar below for exact dates of release. US GDP data is also due at the end of this week.
Adveritas (AV1.ASX)
Adveritas shares jumped +19% yesterday following the end of its trading halt, as the company announced it had completed a $3m placement. The funds were raised at $0.10 per share, a +25% premium to Adveritas last closing share price.
The placement was supported by several existing top shareholders and new shareholders who are attracted to the company’s technology and rapid growth. We view the capital raise positively with the cash used to accelerate growth (which has been positive so far this year). More importantly, with the raise at a large premium to the last traded price to not overly dilute existing shareholders it reiterates the major shareholders also see the medium term value of the business.
We remain Buy rated on Adveritas.
What Markets will be Watching this Week (UTC +13)
Monday
CN GDP Growth Rate Year-on-Year Quarter 3
Tuesday
US Microsoft earnings
Alphabet earnings
Visa Earnings
Coca-Cola earnings
Wednesday
AU Inflation Rate YoY Q3
Meta Platforms earnings
Boeing Earnings
Thursday
CA BoC Interest Rate Decision
Apple earnings
Amazon earnings
Mcdonalds earnings
Starbucks earnings
Friday
EA ECB Interest Rate Decision
US GDP Growth Rate Quarter-on-Quarter
Exxon Mobil earnings