NZ EQUITIES

Infratil: Taking the Longroad to Conviction — FY18 Result

We review Infratil's FY18 result, which included strong performances from the two businesses that have had difficulties in recent times

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Morning News Summary

US Indices Notch Weekly Losses 

US indices finished the week mixed as trade negotiations, rising bond yields and broad losses dampened investor sentiment. Europe moved into the light red on the back of political uncertainty in Italy and losses from auto stocks, while the UK was practically flat as investors assessed unfavourable earnings and news. Asian indices rebounded into the green.

US indices ended mixed as news, technology and healthcare losses weigh

US indices finished the week mixed as investors remained sceptical about trade negotiations between the US and China, while rising bond yields, healthcare and tech stock losses also weighed. The Nasdaq Composite Index and the S&P 500 lost -0.4% and -0.3% respectively, while the Dow Jones Industrial Average finished flat.
Nordstrom tumbled -10.9% after reporting weaker than expected same store sales growth. Tesla fell -2.8% after analysts released reports outlining why it may need to refinance and potentially cut its near and long term margins. Tech stocks Intel (-2.4%), and Alphabet (-1.1%) extended the previous session’s losses. Walgreens Boots Alliance slumped -2.5%. Healthcare stocks Celgene (-2.0%), McKesson Corp (-1.4%) and Allergan (-1.1%) moved lower as the sector remained mostly red for another session. Among financials, Bank of America (-1.8%), Intercontinental Exchange (-1.2%) and Wells Fargo (-1.0%) all notched losses. On the other side, Deere & Co shares rallied +5.8% after reporting strong earnings. PayPal rose +2.0% after announcing the takeover of European small business payments company iZettle.

European and UK indices retraced gains and returned to the light red

European equities fell as investors reacted to auto losses and uncertainty about Italian politics. The Stoxx Europe 600 slipped -0.3% lower. BMW shares dropped -5.1% after issuing a recall of approximately 300,000 cars in the UK because of a fire risk. Ferrari lost -0.9% as it named a new CFO.

The UK’s FTSE 100 (-0.1%) moved marginally lower as investors assessed AstraZeneca’s earnings and mining companies’ losses. Glencore declined -4.4% on reports it faces a bribery investigation over dealings with a notoriously corrupt Israeli businessman in the Congo. Anglo American (-1.2%) and BHP Billiton (-0.7%) also declined. AstraZeneca fell -2.0% after it reported earnings that missed forecasts. Rolls Royce shed -2.0%. National Grid lifted +2.1% after reporting strong earnings.

Asian indices finished the week in the green as trade talks continued

Asian benchmark indices finished the week in positive territory as the US and China continued trade negotiations. A deal was struck on Sunday in which both countries will put their tariff plans on hold. The Shanghai Composite Index (+1.2%), the HSCEI (+0.6%), South Korea’s Kospi (+0.5%), Japan’s Topix (+0.4%) and the Hang Seng Index (+0.3%) all rebounded into the green. The ASX 200 finished the week in the light red, down -0.1%.

Crude records a modest loss, gold crawls up while iron ore remains flat

WTI crude fell -0.3% to US$71.28, while gold inched up +0.1% to US$1,292.60. Meanwhile, iron ore remained unchanged at US$67.50/MT.

Today’s events

  • Stats NZ: International travel & migration - April 2018
  • RBNZ: Credit card debt - April 2018
  • KPG FY18 result
  • PFI ex interim div 1.80 cps
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