Global markets were mixed on Friday as the Nasdaq (US Technology Index) posted its first weekly gain in three weeks, while energy shares rebounded as oil prices rose. The Financial sector weighed on Wall Street even after they passed their annual stress test as some results were weaker than expected. In terms of the week ahead it is an unusually quiet week in terms of key events and economic data.
Closer to home, Ardent Leisure (AAD.AX) was once again in the headlines for the wrong reasons.
Stock in Focus: Ardent Leisure (AAD.AX)
AAD shares were down sharply on Friday after the company cut its final dividend following the release of its full-year guidance that operating earnings are now expected to be in the range of $73m and $75m for the 2017 financial year.
The main driver of the downgrade looks to be weaker than expected growth within its key US bowling centres business, with 4th quarter sales growth slipping into negative territory. As a result, AAD announced a second-half dividend of one cent per stapled security, taking full-year distributions to three cents – down from 12.5 cents in 2015/16.
This was another disappointing update from AAD, although as we have noted previously a significant amount of negativity is being reflected in AAD’s share price. We are currently HOLD rated on AAD.
Members should lookout for our full update on AAD to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market was higher on Friday (ASX 200 index +0.17%) although a new round of selling in the big four banks after the South Australian government unveiled its own state-based version of the federal bank levy kept the market suppressed, holding back the market's recovery after a heavy mid-week sell-off. Shares in TPG Telecom jumped likely due to the news that government legislation will exempt NBN internet service providers from a charge designed to help to fund regional broadband.
The New Zealand market was slightly lower on Friday (NZX 50 index -0.13%) with Contact Energy and Trustpower falling, while Tegel and Restaurant Brands rose. The market generally remains in wait and see mode, with no significant catalysts to drive stocks higher or lower. The power generators have generally seen profit taking on continued drought concerns in the South Island effecting hydro lakes.
3 Things Markets Will be Watching this Week
1. Whether the Oil price stabilises after falling for 5 straight weeks
2. US Fed Chair Janet Yellen speaks in London on Tuesday.
3. NZ trade data is released Tuesday.
Have a Great Day,
Team