Global markets were higher overnight as mining shares paced gains in London while a rebound in the tech sector helped power Wall Street higher as concerns about the political chaos in Washington and tensions between the US and North Korea eased.
It was a full-on day yesterday in terms of earnings announcements across Australia and New Zealand. Included in companies that reported on Tuesday which are under research coverage were BHP Billiton, Sydney Airport, Tourism Holdings, Genesis Energy and Sky TV. Tourism facing stocks Tourism Holdings and Sydney Airport were standouts in terms of performers, further supporting our tourism boom investment theme.
Stock in Focus: Tourism Holdings (THL.NZ)
Tourism Holdings shares were higher yesterday as it exceeded guidance, posting a record 2017 profit and said it aims to boost earnings to $50 million by 2020. We are pleased with the result, and THL continues to be one of our best performing stocks since we recommended it as a buy in April 2016.
Looking at some of the details, net profit rose 24 percent to $30.2 million in the year ended June 30, with revenue rising to $340.8 million from $278.9 million. That was ahead of the upgraded guidance the company gave in June, when it said profit would be about $29.5 million.
We are currently BUY rated on Tourism Holdings.
Members should look out for our full report on Tourism Holdings to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market was higher on Tuesday (ASX 200 index +0.42%) as strong support for mining stocks helped the market snap a three-day un of losses, as BHP reported bumper profits and iron ore and metals prices pushed higher. Mining giant BHP Billiton saw its shares make gains as the mining giant tripled its dividend payment and said it would sell its shale oil asset in the United States.
Sydney Airport saw its share price jump as the company's management said they had "increased confidence" in the outlook and raised their dividend guidance as part of its half-year earnings release.
The New Zealand market was flat yesterday (NZX 50 index -0.01%) with Comvita rallying on positive earnings while Sky Network Television hit an 8-and-a-half year low. The day was dominated by earnings announcements which as mentioned included a -21% decline in profit from Sky TV as content costs increased while revenue and subscriber numbers fell.
Genesis Energy delivered steady full-year earnings, reflecting both positive and negative effects from swiftly changing South Island hydro-generation conditions in the last half of the year. Operating earnings were $335 million in the 12 months to June 30, a 1% fall on the previous year but ahead of previously announced guidance.
3 Things Markets Will be Watching this Week
1. Corporate profits will be in focus as earnings season continues across Australia and NZ.
2. The geopolitical situation as tensions remain high between the US and North Korea.
3. US politics as investors are concerned around the Trump Administration’s ability to pursue its pro-growth agenda.
Have a Great Day,
Team