US markets (S&P 500 Index -0.2%) edged lower for a third day in a row as nervous investors await the Fed’s guidance on Friday in terms of the interest rate hiking track.
There wasn’t much fresh news to drive markets, but weaker US data (services and housing) overnight got the market’s attention, causing some choppy trading conditions
Most sectors were lower except for energy and materials. Supply issues continue to push commodity prices higher, as Saudi Arabia threatened to cut production.
European markets (Stoxx 600 Index -0.5%) were lower after digesting higher oil prices and weaker economic data from the eurozone. Purchasing managers index (PMI) data out of eurozone contracted for the second month in a row.
Summerset (SUM:NZ)
Retirement village operator Summerset rose +0.4% yesterday after releasing its half year result for the 2022 financial year. It was another strong result with underlying net profit after tax rising +9.2% from last year to $82.5m, slightly ahead of expectations on higher sales volume.
Despite a challenging environment for pricing gains as the housing market starts to slow, resale margins held up while development margins expanded.
In regards to the housing market, management said that they are not seeing excess stock or changes in demand, enquiry levels remain high, waitlists are strong and they are not seeing any increase in days to sell or to settle.
Summerset announced 3 new sites were acquired to expand their land bank, and net tangible asset per share rose +56 cents over the 6-month period to $8.91. Reported (which includes unrealised revaluation gains) net profit after tax came in at $134.6m, reporting a softer revaluation gain of $136m versus $260m in the same period last year as housing market cools.
We are BUY rated on Summerset as our preferred retirement sector pick amongst the big names, due to its cheaper valuation and better growth outlook versus Ryman.
Australia & New Zealand Market Movers
The Australian market (ASX 200 Index, -1.2%) fell yesterday, on a day filled with weak earnings and weak sentiment globally, impacting local markets.
Endeavour Group, the local drinks business which separated from Woolworths slumped -12.3% despite reporting higher profit, as margins were flat as rising operating costs spooked investors.
Kogan.com fell -6.6% after the online retailer said it would not pay a final dividend, and that it would reduce staff headcount costs.
The New Zealand market (NZX 50 Index, -1.0%) was down on Tuesday, following the global sell-off.
Heartland Bank shares were flat, after posting a $95.1m profit. The bank also announcing it would undertake a $200m equity raise to pay down debt that was used for its recent Australian acquisition StockCo and to fund other growth initiatives within the business.
Things Markets will be Watching this Week
Monday
Australia: Earnings from Ampol, Cooper Energy, OoH! Media, and Star Entertainment.
New Zealand: Earnings from Freightways, Steel & Tube, and Property for Industry.
Tuesday
Global: US new home sales
Australia: Earnings from Ansell, Boral, Endeavour Group, Kogan, Scentre Group
New Zealand: Earnings from Heartland group, and Summerset.
Wednesday
Global: US Pending homes sales data, and Eurozone consumer confidence.
Australia: Earnings from Coles, Domino’s Pizza, G8 Education, Qantas, Tabcorp, and WiseTech Global.
New Zealand: Annual shareholder meeting by Fisher and Paykel Healthcare and earnings from Meridian Energy, Ebos and Spark.
Thursday
Global: US second quarter GDP and initial jobs claim data.
Australia: Earnings from Appen, Ardent Leisure, Blackmores, Costa Group, Flight Centre, and Pilbara Minerals
New Zealand: Retail sales data, and earnings from Air NZ, Sky City, and Sky TV.
Friday
Global: Japan CPI (inflation) data.
Australia: Earnings from Next DC, Ramsay Healthcare, and Wesfarmers
New Zealand: ANZ consumer confidence report, Earnings from Port of Tauranga, Tourism Holdings, and Delegat Group.
