Global markets were higher overnight in quiet trade with the US market closed for Presidents Day.
In Europe, equities advanced to their highest levels in almost 12 months as miners jumped driven by higher copper pricing and energy stocks gained on a buoyant oil price.
This was coupled with optimism around progress in Covid-19 vaccinations. UK PM Johnson said that the will detail his roadmap for ending the current lockdown next Monday, with a priority to try and reopen schools from 8 March. This follows news that the country has made good progress with its vaccination programme, providing shots to the most vulnerable 15 million people and caregivers and now opening up the programme to younger people. New daily cases of COVID19 have dropped to their lowest level in four months, a similar trend seen in the US.
Kathmandu (KMD:NZX)
Outdoor clothing and equipment retailer Kathmandu (KMD) released a solid trading update for the first half of the 2021 financial year (6-months to 31 January 2021).
Total group sales are expected to be up +12% from last year which includes a full year contribution from Rip Curl. Same store sales fell -10.3% (after adjusting for lockdowns) across segments were mixed with Rip Curl up +21% buffering the flagship Kathmandu -30% brand – which is becoming affected by travel related weakness. Online sales now representing 13% of direct to consumer sales, were up from 8.9% last year.
KMD operating earnings (EBITDA) are expected to be in the range of $47m to $49m which is up 18.5% from last year's $40.5m, although looks to be largely expected by the market given the muted share price reaction.
Consumer spend data remains remarkably strong across Australia and NZ, supported by the lack of travel spend. We currently have a HOLD rating on KMD and will release a full report in our weekly report.
Australia & New Zealand Market Movers
The Australian market was up yesterday (ASX 200 index +0.9%) as Banks and miners made strong gains with BHP up +2.3% and National Australia Banks up +1.4%.
Buy now pay later (BNPL) companies also had a strong session with Zip up +16.9%, Afterpay up +1.6% and Sezzle up +7.3%.
JB Hi Fi shares rose +3.1% after the electronics retailer announced it will pay out 5% of its interim profit declaring a $1.80 per share dividend. Coca-Cola European Partners upped its takeover bid for Coca-Cola Amatil from $12.75 to $13.50 per share declaring it its best and final offer.
The New Zealand market fell on Monday (NZX 50 index -0.6%) again weighed down by energy stocks pulling back from its recent run.
Contact energy was placed in a trading halt as it announced it will seek to raise $325m in fresh capital for a major geothermal project as its transitions to be a 100% renewable generator.
The new restrictive measures in New Zealand, and Auckland in level 3 lock down again saw usual suspects fall Vista Group International declining -2%, Auckland International Airport fell -1.6% , SkyCity Entertainment was down -1% percent to $2.94, and Air New Zealand slipped -0.3%. While Tourism Holdings bucking the trend ending the day flat.
Argosy Property – announced the sale of its largest non-core asset the Albany Life Style Centre for $87.5m which is in line with book value and represents a 7.1% yield on passing rent. ARG has been divesting non-core assets to lower its gearing which was towards the top end of managements target range.
3 Things Markets will be Watching this Week
- Local COVID news-flow – a reminder that COVID news is still relevant on both sides of the Tasman, with both Victoria and Auckland entering fresh lockdowns.
- The week ahead is dominated by corporate earnings. In NZ & Aussie. Contact Energy, Fletcher Building, EBOS, SkyCity and Auckland Airport are all scheduled to report. In Australia, key results include BHP, Treasury Wine, Rio Tinto, Wesfarmers, Fortescue, CSL, Crown, Woodside, and QBE. In addition, NAB hands in its quarterly report on Tues, with Westpac on Wed, and ANZ on Thu.
- In Australia, the latest employment data is due along with retail sales and minutes from last month’s RBA meeting.
Team
