Global markets were mixed overnight, with US market (S&P 500 index +0.2%) trading higher with gain across most of the market, apart from the tech sector.
Investors looked to take profits from their high flying technology shares, with tech the worst performing sector for another session as US interest rates continued to grind higher. Zoom shares plunged -18.4% as revenue growth slowed post lock-downs and a return to normal business in most of the globe. Bank stocks were higher again, benefiting from rising bond yields, and Energy stocks led gains rebounding as the US, UK and major Asian economies confirmed they will release oil from their strategic reserves in an attempt to reduce petrol prices.
European Markets (Stoxx 600 index -1.1%) fell experiencing a similar tech sell-off, while fresh waves of covid-19 infections and restrictions across Europe also weighed down on market sentiment.
Locally, all eyes will be on this afternoon's Reserve Bank of New Zealand rate announcement.
Argosy Property (ARG:NZX)
Argosy shares were up +1% yesterday after delivering solid result for the first half of the 2022 financial year.
AFFO (Adjusted Funds From Operations) came in at $25.5m, lower than last year but ahead of expectations due to lower rental abatement and repair work at their 7WQ property. Argosy guided that their 2022 full year dividend will be 6.55 cents per share – representing a 4.4% dividend. ARG's net tangible asset per share rose +7.2% from last year to $1.64, helped by a +$91.7m revaluation gain..
While a promising result, we anticipate further share price pressure from upcoming rate hikes on property stocks, and for that reason we remain HOLD rated at current valuation.
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Australia & New Zealand Market Movers
The Australian market was up yesterday (ASX 200 index +0.8%) rebounding from Monday’s sell off, helped by a jump in commodity prices.
Energy and Material stocks surged higher, with the price of iron ore jumping +4.3%. The gain was attributed to prospects of more stimulatory policy settings in China, with iron ore miners rise BHP (+4%), Rio Tinto (+3.6%), and Fortescue Metal (+9.8%) all jumping after a period of weakness.
Woodside Petroleum shares jumped +3.5% after finalizing the merger of BHP’s energy assets, to make WPL a global top 10 independent energy company by production and the largest energy company listed on the ASX.
Following a weak lead from Wall street, Aussie tech shares were also weaker with heavy falls for Wisetech (-5.6%), EML Payments (-5.6%), Afterpay (-5.4%) and Next DC (-5.2%).
The New Zealand market was up on Tuesday (NZX 50 index +0.4%) partially offsetting Monday’s rate hike induced sell off.
Retirement village operator Arvida rose +1% after delivering a modest result which was flagged earlier, due to lockdown concerns restricting growth.
3 Things Markets will be Watching this Week
- Key events this week in Japan and the US who will reportedly make a joint announcement on the release of oil reserves as soon as this week.
- Locally, RBNZ will may an OCR review on Wednesday and latest retail sales print in Australia.
- Earnings release from Kiwi Property Group, Metro Performance Glass, Webjet and Fisher & Paykel Healthcare.
