Jarden Brief: Vista CEO increases stake in company stock

Keeping you up to date with the latest market moves, in association with Investment firm Jarden

New Zealand

The NZX 50 fell 0.8 per cent yesterday.

The energy sector was the top performer up 2.6 per cent. Consumer cyclicals and consumer-non cyclicals were the two next best performers up 0.3 and 0.2 per cent, respectively.

The worst performing sector was healthcare down 2.7 per cent after poor performances from Fisher and Paykel Healthcare (-4.2 per cent) as well as Vital Healthcare (-2.3 per cent). This was followed by industrials down 0.6 per cent and real estate down 0.5 per cent.

Dairy company Synlait Milk was the top performer of yesterday’s session, rising 4.0 per cent following last week’s drop upon release of a financial year 2021 guidance update. EBOS Group, who market, distribute and wholesale medical, healthcare and pharmaceutical products, gained 3.2 per cent as the third best performer.

Meanwhile, the gentailer space continued to be volatile after further speculation that US funds manager Blackrock will need to sell a large number of shares in Contact Energy and Meridian to meet the new index composition for the iShares Clean Energy ETF. Meridian Energy fell 3 per cent in response, while Contact Energy dipped 0.5 per cent.

On the other hand, industry competitor Mercury rose 3.3 per cent yesterday despite the increasing improbability of being included in the Clean Energy ETF.

Mercury made an announcement that they are considering offering up to $200 million of 5.5-year unsecured fixed rate Green Bonds with $50 million in oversubscription capacity, although this is unlikely to have been a material reason for the stock price movement.

This funding will go towards financing and refinancing projects that meet Mercury’s August 2020 Green Financing Framework. The announcement outlined that the bonds can be expected to have Mercury’s credit rating of BBB+ and that full details will be released in the week of the 15 March.

Vista Group International CEO Leon Newnham disclosed his substantial purchases in his own company’s stock over the last week, bringing his shareholding in the company from 522,160 to 749,785 shares. Vista Group International develop and sell software for the firm industry, and has traded down since the pandemic forced closures of cinemas worldwide. This significant increase in shareholding from the CEO is often thought to signify underlying management confidence in the business, and some analysts take this as a signal that the stock is undervalued.

Aged care operator Oceania Health Care announced yesterday that the Chief Executive, Earl Gasparich, has suddenly resigned to replace Glen Sowry as CEO of formerly NZX-listed Metlifecare. Brent Pattison, the current Chief Financial Officer, has been appointed as Acting CEO effective immediately.

In a Government announcement yesterday Prime Minister Jacinda Ardern announced that New Zealand has secured 8.5 million more doses of the Pfizer vaccine on top of the 1.5 million already secured. With two vaccinations required per person this news means that all New Zealander’s can be fully vaccinated against Covid-19. Widespread rollout of the vaccine would be “from the middle of the year”.

INTERNATIONAL
US Markets:

A mixed bag across US equities this morning with the S&P500 and Dow Jones up 0.5 and 1.9 per cent, and the Nasdaq down 0.9 per cent at the time of writing.

Optimism of future growth continues after the proposed US$1.9 Trillion stimulus package passed through the Senate over the weekend and is expected to be written into law later this week. Economists have now taken the stimulus’ effects into account and are now forecasting a record 5.5 per cent gain in gross domestic product (GDP) this year, which would be the highest yearly growth since 1984.

As the market continues to react to news about the stimulus, the best performing sectors today are Materials and Financials, each up 2.2 per cent. In the red, Information Technology and Communication Services were the worst performers trading down 1.0 per cent and 0.4 per cent respectively.

For more colour on the stimulus package – households earning under USD$155,000 can expect a payment of around USD$1-6 thousand dollars, depending on circumstance. USD$1.9 trillion will also be spent on aid for schools, employment assistance, vaccine testing programmes, and aid for youth homelessness among other areas.

The single stock gainer today was clothing company HanesBrands Inc, rising 8.0 percent. Following HanesBrands was United Airlines up 6.6 per cent as the airline industry benefits from an increasingly optimistic view that travel will be back to normal sooner rather than later. The worst performers were semiconductor manufacturer KLA Corp down 3.8 per cent and hardware designer NVIDIA Corp, also down 3.8 per cent.

Asian markets:

Among the Asian indices. The Hang Seng is currently down 1.9 percent, the Shanghai Composite and Nikkei also following suit down 2.3 and 0.4 per cent respectively.

Commodities:

In commodities today Gold was down at US$1,676.10 per ounce. Cryptocurrencies continued momentum with Bitcoin up 1.5 per cent to US$50,684 while Ethereum was up 5.0 per cent to US$1,729.20 at the time of writing. WTI Crude oil has climbed to US$65 per barrel (its highest in almost a year) following a drone strike on one of the Saudi Aramco facilities threatening to disrupt supply lines. US 10-year treasury yields remain continue to rise, currenting sitting at 1.60 per cent.

Australia

The ASX 200 was up 0.4 per cent after yesterday’s trading session.

The best performing sectors were Materials and Consumer Staples, respectively up 1.7 and 0.7 per cent. The worst performing sectors were Information Technology (down 1.1 per cent) and Health Care (down 0.8 per cent).

The stock with the greatest outperformance was wine-making company Treasury Wine Estates, which advanced 6.4 per cent to A$10.97 after news about a potential takeover hit the street. It is said that Pernod Ricard, a French spirits and wine producer, may want to buy out the Australian firm in a deal valued at approximately A$9 billion. The French company is valued at around A$64 billion and owns brands like Jacob’s Creek and Absolut Vodka. According to media, Treasury Wine Estates has received an offer at A$15.67 per share however both companies have been unwilling to comment.

Gold mining company Silver Lake Resources and global asset managers Janus Henderson Group rounded out the second and third best performers, which rose 6.0 and 5.2 per cent, respectively.

The worst performer on the day was financial technology company Zip Co Ltd, which lost 6.7 per cent, down to A$8.92. The worst performers’ complement was rounded out by consumer electronics company Kogan.com and employee management service provider Smartgroup which lost 5.0 and 4.6 per cent, respectively.

Dexus, an Australian Real Estate Investment Trust, is capitalizing on increasing demand for warehousing space by acquiring more than A$150 million worth of industrial assets in prime locations. Once the development is completed, the value of those properties is estimated to surpass A$300 million. Dexus’ property portfolio is valued at A$32 billion and, with the newest acquisitions increasing its industrial pipeline to A$1.5 billion.

Meanwhile, Xpansive, the leading market for ESG-inclusive commodities, and Trovio, the developer of a platform digitizing gold and other precious metals, have combined forces to introduce the first net-zero carbon emissions gold ETF to the ASX. This offering would be aimed at ESG-conscious investors that look for a product that offers the value attached to gold in uncertain times.

• For more information on the latest market moves, get in touch with Jarden.

Disclaimer: This Morning Brief has been prepared in good faith and reflects opinions and views at the time of publication, using external sources, systems and other data and information we believe to be accurate, complete and reliable at the time of preparation.We make no representation or warranty as to the accuracy, correctness and completeness of that information, and will not be liable or responsible for any error or omission.This Morning Brief is not to be relied upon as a basis for making any investment decision. Please seek specific investment advice before making any investment decision. Jarden Securities Limited is an NZX Firm, a broker disclosure statement is available free of charge at www.jarden.co.nz. Jarden is not a registered bank in New Zealand. Full disclaimer available at: https://www.jarden.co.nz/limitations-and-disclaimer

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