Global markets were higher overnight, with US Markets (S&P 500 Index +0.8%) ending the session up on light news-flow, as investor sentiment continues to improve.
Markets were generally mixed, with technology shares leading gains. In stock news, Twitter surged +27%, following news Elon Musk had acquired 9.2% passive stake after criticising the companies’ rules on censorship and freedom of speech. Tesla was another strong performer up +5.6% following its strong quarterly electric vehicle delivery numbers, with positive sentiment spreading across most tech stocks. Starbucks fell -3.7% after the coffee chain suspended its share buyback program.
European markets (Stoxx 600, +0.9%) were also higher as a boost in tech stocks outweighed concerns about the economic impact of potential new sanctions on Russia.
Fletcher Building (FBU:NZX / FBU:ASX)
Fletcher Building was down -2.7% yesterday after a government enquiry into the price of concrete and plasterboard. While regulatory uncertainty is a negative it is hard to see how this will develop further, given government enquiry into fuel prices (pre-covid) and supermarkets in the past have yet to eventuate, and the current enquiry is believed to be a minor risk in our opinion as it affects only a part of Fletcher’s diversified business.
In other news, Winstone Wallboards, which controls 94% of Gib board, and partly owned by Fletcher announced plans to increased production and resolve supply chain issues with a new factory due to open mid-2023 – which could ease supply shortfall and lower regulatory risks.
At current levels we are comfortable with our BUY rating on Fletcher Building
Australia & New Zealand Market Movers
The Australian market was higher yesterday (ASX200 index, +0.3%), as utilities and material stocks lead gains.
Lithium and other EV related miners were strongest amongst the bunch as demand for EV related resources continue to rise, while the major iron ore miners edged higher.
Financials were lower as the big four banks ended the day in red. However, fund manager Pendal surged +18.1% after receiving an A$2.27 billion takeover offer from Perpetual, Fund manager peers like Magellan Financial (+9.7%) rose on the back of the news.
The New Zealand market edged lower on Monday (NZX 50 index, -0.3%).
Air NZ slumped as it traded ex-rights to purchase fresh $0.53 shares, but then recovered from its heavy loss to trade at 90.5 cents down only -22.2%, about Air NZ’s quoted theoretical ex-rights price of 81 cents.
It was a mixed bag for the rest of the market, Pushpay which has performed well recently gave back some gains down -4.3%. Oceania rose +4.7% and Pacific Edge lifted +4% as investors believe the stocks had been oversold recently.
3 Things Markets will be Watching this Week
- Geopolitical risks remain extremely elevated with the Russia/Ukraine conflict.
- The economic calendar in the week ahead is very light – minutes from the March US Fed meeting are released and a number of Fed speakers will be on the wires.
- Locally, in Australia the RBA policy decision tomorrow is a non-event, with no change in policy expected ahead of the May Federal election, but another incremental shift to more hawkish commentary wouldn’t look out of line.
