Week Ahead | Ryman Result

21 November 2022

New Zealand Market Movers 

The New Zealand market (NZX 50 Index, +0.8%) rose on Friday on the back of gains by Energy generators, including Mercury (+4.1%), Contact (+3.1%), and Meridian (+2.2%). 

My Food Bag (-15.5%) cratered after revealing its half-year results that showed the squeeze that rising food prices have had on its net profit, which is down -37% on a -4% drop in revenue. 

Fonterra Shareholders’ Fund Units (+4%) climbed after announcing it is at the end of its divestment process for its Chilean business (Soprole) for NZ$1.1 billion. At the same time, the company notes that “The Fonterra Board intends to make a final decision on the amount and timing of any capital return once the sale agreement is unconditional…”. 

Australia Market Movers 

The Australian market (ASX 200 Index, +0.2%) inched higher on Friday. 

OZ Minerals (+4.0%) advanced after its board agreed to a BHP Group’s (+0.3%) takeover bid of $28.25 per share. The acquisition is expected to give BHP a greater exposure to copper and nickel, which should help the company now run its smelters at full capacity. The deal is conditional on BHP’s due diligence and OZ Mineral’s shareholder approval.  

Europe Market Movers  

European markets (Stoxx 600 Index, +1.1%) closed higher on Friday, helping the market pare losses from the previous two sessions. Automobiles (+2.2%) and Retail (+2.1%) reversed their earlier losses and almost all sectors ended the session in the green. 

US Market Movers 

US markets (S&P 500 Index +0.5%) advanced despite US Federal Reserve officials reiterating the banks stance on inflation, with St. Louis Federal Reserve President James Bullard noting that the “the policy rate is not yet in a zone that may be considered sufficiently restrictive”. Three other Federal Reserve Presidents will make public addresses this coming Wednesday morning, while the Federal Open Market Committee (FOMC) release its Meeting Minutes pertaining to its last interest rate decision on Thursday. 

Grindr (+213.8%), the LGBTQ+ dating app, soared on its first day on the New York Stock Exchange, at one point hitting $71.51, before closing at $36.50. Compatriots in the dating-app space Bumble (-1.6%) and Match Group (-1.3%) fell slightly on the day. 

Stock In Focus:  Ryman Healthcare (RYM.ASX) 

Ryman Healthcare fell -4.6% after delivering its 2023 half year result. Cashflow issues arising from a less liquid housing market meant net debt rose +$400m over the half to $3 billion. Net profit after tax fell –31% from last year to $193.9m, after reporting a much lower gain on its investment portfolio.

Net tangible asset per share rose +5% over the half to $7.135 per share, helped by assets values increasing faster than debt, mainly due to additions as well as revaluation gains. We anticipate net tangible asset per share would come under pressure over the near-term affecting all retirement village operators as well as other property companies as property asset values come under pressure following the aggressive rate hiking by central banks. 

We are HOLD rated on Ryman as we prefer Oceania and Summerset due to their better growth and value proposition. 

What Markets will be Watching this Week (UTC +13) 

Monday 
EA ECB President Lagarde Speech 

Tuesday 
Argosy Property earnings 

AU RBA Govenor Philip Lowe Speech   

Wednesday 
Oceania Healthcare earnings 

Tower earnings 

NZ RBNZ Interest Rate Decision  

Thursday 
Rakon earnings 

Pacific Edge earnings 

US Durable Goods Orders MoM OCT  

US FOMC Meeting Minutes 

Friday 
US Thanksgiving Holiday (US markets close) 

Saturday 

The New Zealand market (NZX 50 Index, +0.8%) rose on Friday on the back of gains by Energy generators, including Mercury (+4.1%), Contact (+3.1%), and Meridian (+2.2%). 

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