Global markets were slightly higher overnight Wall Street rose to fresh record highs, bolstered by a rally in Wal-Mart shares.
Software as a service companies have been in the headlines in recent times, with companies such as Xero (XRO:NZ) and Wise Tech Global (WTC:AX) experiencing strong share price runs. see this as an interesting space to look for potential investments, and yesterday our analysts went to check out the Auckland office of recently listed 9 Spokes International (9SP:ASX) to get a better on the ground understanding and feel for the company.
9 Spokes is a software as a service company which is developing a digital platform for small businesses through to large enterprises. Our analysts are currently assessing the company investment case, and investors should watch out for potential research coverage on the stock going forward.
Stock in Focus: Select Harvests (SHV.AX)
As we touched on yesterday, Almond company Select Harvests announced it had received a takeover offer from Mubadala Investment Company PJSC had offered to acquire the company for $5.85 per share via a scheme of arrangement that was “non-binding, indicative and highly conditional”.
Given the key terms of the proposed deal and a thorough review of its operations, the Select Harvest board concluded: “These and other factors, taken together from a Select Harvests shareholder perspective, persuaded the Board not to engage in the Indicative Proposal at its headline value.” The timing of the takeover is interesting to say the least, given it comes after an institutional capital raise of $65m in order to strengthen the company’s balance sheet.
While SHV shares have been under pressure due to adverse prices and operational risks, we see SHV as a relatively attractive play on the continual growth in demand for health foods.
Members should look out for our full update on SHV to be released in today’s weekly report.
Australia & New Zealand Market Movers
The Australian share market was a touch lower on Tuesday (ASX 200 index -0.02%) as it was heading for a 3-session winning streak, dragged lower by the big miners.
The New Zealand market made new record highs (NZX 50 index +0.34%) as investors latched on to companies with strong growth outlooks including A2 Milk Co, Xero and Fisher & Paykel Healthcare, which are also exposed to currency moves. On the flipside Z Energy and Fletcher Building fell. The market capitalisation of A2 Milk has now surpassed that of Fletcher Building.
3 Things Markets Will be Watching this Week
1. The NZ political situation and negotiations as a coalition government is formed now that all the special votes have been counted.
2. While markets have largely brushed off the geopolitical situation with North Korea, risks remain.
3. Minutes from the last US Federal Reserve Meeting are released on Thursday.
Have a Great Day,
Team