Global markets were higher overnight, helped by upbeat earnings from Walmart and Cisco and easing trade worries after the United States and China said they would hold talks later this month.
Closer to home, major stock moves were driven by company profit announcements across Australia & NZ. It was a mixed bag yesterday for stocks under our research coverage such as Treasury Wine Estates, Invocare, Telstra, and QBE which we touch on below. We will release full updates on the results in our weekly report.
Stock on Focus: QBE Insurance (QBE:AX)
Shares in QBE were among one of the many big movers on the ASX yesterday, jumping +6.7% on a better than expected result.
QBE Insurance's profit came in better than expected on the back of premium growth, rate increases and fewer weather catastrophes (which was a welcome relief after a challenging period). Net profit rose 4% to $US370 million ($511.2 million) for the six months ended June 30, bettering expectations of a $US310 million profit.
We have a positive view on QBE as a turnaround story. We believe QBE is relatively cheaply priced, especially given the backdrop of a weaker Aussie dollar and rising interest rates (which should improve QBE’s investment income).
We currently have a BUY recommendation on QBE.
Members should look out for a full update on QBE to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market was a touch lower on Thursday (ASX 200 index -0.01%) shaking off a global commodity plunge which hit the miners, with continued uncertainty in emerging markets.
It was another busy day in terms of company profit announcements. Invocare closed sharply lower after it cut its interim dividend and forecast softer market conditions in the future as death rates fell below normal trend levels. Telstra's results gave the companies share price a significant boost. Despite reporting a slump in profits and flagging continued pressure on earnings in the year to come, the bar was not set high and investors appear to have taken positives from the telco's strong customer growth and guidance forecast. Treasury Wine Estates shares jumped as it continued to forecast strong growth for the company, saying it expects profits to rise by around 25% in the next financial year.
The New Zealand market made another small gain yesterday (NZX 50 index +0.13%) with company news flow dominating headlines. Skellerup shares led the market higher as the rubber goods maker boosted annual profit 23% to a record $27.3 million and raised its dividend. Precinct Properties shares also gained after the real estate investor forecast a higher dividend and increased earnings in the 2019 financial year. Interestingly, Precinct said the Commercial Bay project in downtown Auckland which is being contracted to Fletcher Building will be completed a little later than scheduled.
3 Things Markets Will be Watching this Week
1. US corporate earnings season moves into its latter stages.
2. Locally, investors in Australia and NZ will have a number of profit announcements to focus on as earnings season gets into full-swing.
3. Geopolitics, with the Turkey economic situation hitting headlines over the weekend.
Have a Great Day,
Team