Global markets were lower on Friday after further White House turmoil, as investors continue to be concerned around the Trump Administration’s ability to pursue its pro-growth agenda.
In the latest shakeup, the White House said Trump on Friday fired chief strategist Steve Bannon, known as an economic nationalist and an advocate of "America First" policies. Critics have accused him of harbouring anti-Semitic and white nationalist sentiments.
Earnings season continues across Australia and NZ this week and corporate profits will likely remain a focus. While it is early days, the ASX ended the week marginally higher as investors digested mixed earnings announcements, while the NZX is trading at all-time highs.
Stock in Focus: Spark (SPK.NX / SPK.AX)
Unlike its Australian counterpart Telstra which we discussed last week, shares in Telecommunications company Spark were flat on Friday following the release of a solid full year result.
Spark boosted annual profit 13 percent to $418 million as it eked out small sales growth and continued its focus on stripping out costs, while signalling a changing of the guard with chairman Mark Verbiest planning to stand down in November.
We are pleased with Spark’s latest result and have remained positive on the company as it undertakes its transformation into a digital services company. This should continue to support growth while Spark’s dividend yield remains attractive, in our view.
We are currently BUY rated on Spark.
Members should look out for our full report on Spark to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market sold off on Friday (ASX 200 index -0.56%) following global moves, but managed to end the week marginally higher. The focus is expected to shift to the miners this week as BHP, Fortescue and South32 report profits. A vast improvement in BHP's results for fiscal 2017 compared to the previous year is expected to be among the highlights of a frenetic few days of reporting season this week.
The New Zealand market was more or less flat on Friday (NZX 50 index +0.04%) defying global market trends, with Tourism Holdings and Fletcher Building gaining while CBL Corp plunged. CBL said first-half operating earnings fell 36 percent, largely due to a $16.5 million increase in CBL Insurance's reserves to cover future claims, although revenue growth was still strong.
3 Things Markets Will be Watching this Week
1. Corporate profits will be in focus as earnings season continues across Australia and NZ.
2. The geopolitical situation as tensions remain high between the US and North Korea.
3. US politics as investors are concerned around the Trump Administration’s ability to pursue its pro-growth agenda.
Have a Great Day,
Team