Week Ahead | Schrole Update

28 March 2022

Global markets edged higher in Friday, with US Markets (S&P 500 Index +0.5%) closing off the week in the green as investors weigh up the war in Ukraine and upcoming interest rate hikes.

In contrast to stocks, the global bond sell-off picked up pace on Friday with the market ramping up expectations of Fed tightening after Citi Bank called for consecutive 0.50% hikes at the next four meetings. The US 10-year yield hit 2.50% for the first time since mid-2019.  Equities remain surprisingly resilient to the carnage in the bond market.
Accordingly, financials were stronger, while most tech shares were generally weaker offsetting a generally positive session across most of the market. Energy stocks were a strong performer on the session, as traders react to European Union striking a deal with US to lower their dependence on Russia.  

European Markets edged higher (Stoxx 600, +0.1%) reversing earlier losses as gains across oil and gas stocks were offset by losses from banks stocks. 

Schrole Group (SCL:ASX)

Schrole (SCL) shares have been rangebound recently, as the HR software company announced it achieved its first two sales from its new Engage product which was released a month ago. The two school’s being existing Schrole connect customers showing the ease and value of up-sell and cross sell and help increase average contract value per customer by offering additional products.

Schrole also earlier announced the successful completion of its first Schrole Events first international recruitment season. Feedback so far has been encouraging and a strong marketing push and product evolution is underway for the 2022-2023 recruitment season.

We remain BUY rated on Schrole with a High-Risk rating, and expect its relatively ‘cheap’ valuation versus other technology names at ~2x revenue has helped create some immunity to the current market volatility. Keeping in mind is a micro-cap and with lack of liquidity means the shares can be quite volatile.

Australia & New Zealand Market Movers

The Australian market was up on Friday (ASX200 index, +0.3%) for a fourth consecutive day.

Material and Energy stocks continue to help lift the market higher, while technology stocks continue to be under pressure, and financials took a breather traded lower for a day.

The New Zealand market was up on Friday (NZX 50 index, +0.3%) on another mixed day. 

NZME jumped +7.9% after saying they are working on a deal with Google for the advertising giant to make payments for its news content.

Mainfreight rose +4.7% as it recovers from its 8-month low and news earlier in the week its co-founder purchased $1m shares.  

Tourism Holdings rose +2.8% after the commerce commission signed off its sales of Mighway and ShareACamper business.

Z Energy climbed 0.3% after its shareholders voted in favour of Ampol’s takeover bid at $3.76 per share- the deal is still now subject to Commerce Commission approval.

3 Things Markets will be Watching this Week

  1. Geopolitical risks remain extremely elevated with the Russia/Ukraine conflict.
  2. Highlights this week include US Non-Farm Payroll e,ployment data and China PMI report 
  3. Locally, Australia will release their fiscal budget, and Synliat Milk reports its result.
Global markets edged higher in Friday, with US Markets (S&P 500 Index +0.5%) closing off the week in the green as investors weigh up the war in Ukraine and upcoming interest rate hikes.

Do You Want Daily Market Insights?

If you’re interested in staying up-to-date with the latest news and analysis on stocks, be sure to sign up to BlackBull Research.

1 Month Free Trial

Access our expert stock market research Free of charge with no obligation

Free 1 Month Free Trial

Unlock this article & access our expert stock market research

ASX, NZX & USD Stock Buy, Hold, Sell recommendations. Model Portfolios. Daily news and more

[pmpro_checkout]