RBNZ Policy Talk Hits NZD | Woodside Petroleum

24 July 2019

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Global markets continued to rally overnight, lifted by upbeat quarterly reports from Coca-Cola and United Technologies, while a debt ceiling and budget deal between President Donald Trump and Congress also buoyed sentiment.
 
In other news, the NZ dollar took has taken a hit after the Reserve Bank of NZ (RBNZ) yesterday in response to an article confirmed they “…have begun scoping a project to refresh our unconventional monetary policy strategy and implementation. This is at a very early stage”. In the current environment of record low interest rates around the world, it looks as if the RBNZ is now also considering unconventional monetary policy strategy and implementation.
 

Stock in Focus: Woodside Petroleum (WPL:ASX)

​​​​​​​​​​​​​​​​Shares in WPL fell after releasing a weak second quarter result for the 2019 financial year.
 
Revenue for the quarter was $738m, down -32% from last year due major maintenance work at its Pluto LNG plant took longer than expected. This lowered production by -22%, and WPL also experienced weaker LNG pricing due to pricing lag. Accordingly, WPL guided 2019 full year production to be on the lower end of its previous guidance range of 88MMboe to 94MMboe. At the same time WPL has made good progress on a number of developments including the near completion and within budget of its Greater Enfield Project as well as being awarded a joint venture Senegal drilling contract.

WPL remains our preferred energy sector pick, with most of its exposure in LNG which is expected to see increased demand that will create a supply shortfall in 2020.
 
We currently have a BUY recommendation on WPL.
Members should look out for a full update on WPL to be released in our weekly report.

 

 
Australia & New Zealand Market Movers

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​The Australian share market rallied on Tuesday (ASX 200 index +0.50%) with information technology stocks in particular rising ahead of some key tech earnings in the US later this week.  Bellamy's Australia and A2 Milk were also among the market's best performers as Bloomberg reports noted that the decision by Chinese regulatory agencies to enforce the country's new e-commerce laws had shown little impact on daigou operations. Computershare was lower its said its chief financial officer Mark Davis would step down after almost seven years in the role. The company also reaffirmed its earnings guidance.
 
 
The New Zealand market continued to power higher yesterday (NZX 50 index +0.39%) as Mainfreight and A2 Milk hit highs on strong demand for the export-focused stocks that have reliably outperformed expectations. Electricity generator-retailer shares were largely unmoved by the Electricity Authority's new transmission pricing methodology, which aims to charge consumers based on the benefit they receive from transmission projects.

 

3 Things Markets Will be Watching this Week

  1. ​​​​​​​​ US Corporate earnings season​ continues this week with tech names Amazon, Alphabet, and Facebook among those to report.
  2. The latest US economic growth (GDP) figures are published at the end of the week.
  3. Reserve Bank of Australia governor Lowe makes a speech on Thursday.
     

Have a Great Day,
 

Team

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Global markets continued to rally overnight, lifted by upbeat quarterly reports from Coca-Cola and United Technologies.

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