Global markets were mixed on Friday in a mostly tame finish to a week of strong gains. Tensions remain high amid mounting signs Trump will make his tough-on-China stance a key element of his re-election bid and as US unemployment figures showed another 2.44m seek benefits with ongoing uncertainty about the pace of economic recovery from the coronavirus.
Further, the US Commerce Department said it was adding 33 Chinese companies and other institutions to an economic blacklist for enabling human rights violations. China also declined to set a GDP growth target for the first time since 1990 at its annual week-long meeting of the National Peoples' Congress in Beijing which began on Friday. The Chinese economy experienced its first decline in decades in the first quarter, contracting 6.8% from a year earlier, as the covid-19 pandemic derailed the world’s second-biggest economy.
Covid-19 and US-China trade tensions are likely to once again dominate headlines again this week.e.
Sky Network Television (SKT:NZX / SKT:ASX)
Sky Network Television announced plans last week to raise $157 million through an underwritten and deeply discounted share offer to shore up its balance sheet while national and international sporting events are restricted, and to prepare a new broadband product.
The capital raising is priced at 12 cents a share, 63% below the last closing price of 33 cents. The stock has emerged from trading halt this morning and is currently trading at 20 cents per share.
The institutional rights offer ($110m) has been completed, as well as a placement ($9m).
Retail investors will have a chance to participate with the offer opening on Wednesday and we will release an update in our weekly report.
We currently have a SELL rating on SKT.
Australia & New Zealand Market Movers
The Australian market fell on Friday (ASX 200 Index -0.9%) as ratings agency Fitch has downgraded its outlook for Australia's AAA credit rating. The big banks were lower, with the healthcare and energy sectors the worst performers. Wesfarmers revealed half its Target stores could shut or be converted to Kmart stores, putting as many as 1,300 jobs on the line.
Rare earths group Lynas Corp has received a setback to its expansion plans after warning the US Department of Defense contract it was awarded last month may be on hold while the political debate heats up on whether the country should source its rare earths onshore.
The New Zealand market sold off on Friday (NZX 50 -0.6%) with Infratil making solid gains while Freightways led the local market lower. The logistics company is sensitive to the amount of activity in the domestic economy.
New Zealand Refining dropped as it said it is stopping production at its Marsden Point oil refinery for several weeks from late July to help clear surplus fuel stocks which have built up during the national lockdown. Outside the NZX 50 index, Eftpos provider Smartpay Holdings climbed as the company raised A$13 million from institutional investors in an over-subscribed offer to support its growth in Australia and New Zealand.
3 Things Markets Will be Watching this Week
- Covid-19 and US-China trade tensions are likely to once again dominate headlines.
- 1st quarter GDP, Consumer confidence and housing data (new and pending home sales) in the US dominates the data flow this week.
- Locally, earnings are due from Mainfreight, Goodman Property, Sanford, Infratil, Gentrack, Tilt Renewables and Napier Port.
Have a Great Day,
