US investors continued Friday’s late buying action, leaving Wall Street's benchmarks well in the green, while European investors also went bargain hunting as German business confidence data suggested the economy remained resilient, backed by strength in the services sector. Asian indices were mixed as Beijing and Tianjin tightened COVID restrictions.
US investors returned to equities
In the US financials stocks (+3.4%) lead the gains, while shares in Consumer Discretionary (-0.2%) bucked the upward trend. During his trip to Japan, President Biden said he was considering cutting Chinese tariffs and is also weighing a new trade deal in Asia. US 2-year Treasury bond yields bounced +4bp to 2.62% and 10-years rebounded +6bp to 2.85%. The Dow Jones jumped +1.7%, the S&P 500 gained +1.3% and the Nasdaq progressed +0.9%. JPMorgan Chase surged +7.2% after raising its FY22 net interest income outlook. Other banks such as Citigroup (+7.1%) and Goldman Sachs (+3.9%) gained as a result. VMWare soared +19.8% on reports that Broadcom (-4.2%) was in talks to buy the cloud services provider. Shareholders of China’s Didi Global (-0.3%) voted to delist from the New York Stock Exchange. Starbucks (+0.6%) is exiting Russia, having shut its stores in March.
European shares rose on positive data, while Siemens saw some action
The Stoxx Europe 600 recovered +1.3%. An Ifo Institute survey showed German business morale unexpectedly rose in May. Siemens Gamesa leaped +6.2% after Siemens Energy (-0.7%) launched a €4.05b cash tender offer for the 32.9% of the wind turbine maker that it doesn't already own. Siemens (+1.4%) also gained. Deutsche Euroshop rocketed +40.1% after a consortium of bidders offered to buy the German shopping centre investor for €1.4b. London’s FTSE 100 rose +1.7%. Home improvement retailer Kingfisher (+2.2%) had a strong result and maintained its full-year outlook. Software company Kainos (+19.3%) also benefitted from a strong annual result. Private equity firm Sycamore has reportedly withdrawn from the sale process for fashion retailer Ted Baker (-0.8%) but it has received several more revised takeover offers. Online gift seller Moonpig (+11.2%) agreed to buy experienced gift seller Smartbox.
Asian benchmarks were mixed as Beijing COVID restrictions continue
China’s CSI 300 fell -0.6% and its Shanghai Composite (+0.0%) was flat as Beijing extended work-from-home for some of the city's residents and Tianjin reportedly tightened rules, while Shanghai reopened some public transport. Hong Kong’s Hang Seng lost -1.2%, South Korea’s Kospi progressed +0.3% and Japan’s Nikkei 225 gained +1.0%. The ASX 200 (+0.0%) was unchanged after the Coalition's loss in the weekend election in which the Labor party came out on top. Rural services group Elders (+9.8%) posted a strong result, which saw an +80% rise in first half operating profit. Mining tech manufacturer Codan (+14.5%) projected a 2H22 result as good as its record breaking first half. A broker reckoned A2 Milk (+3.5%) and Bubs (+3.5%) could benefit from the current shortage of infant formula in the US. The NZX 50 inched +0.4% higher, with EROAD +5.6% seeing further recovery and Skellerup rising +3.6%.
Oil and industrial metals mixed, precious metals and iron ore flat
WTI crude lost -0.3% to US$110.00/bbl, gold gained +0.4% to US$1,849.70/oz and iron ore was flat at US$133.66/MT.
AFT Pharmaceuticals (AFT) delivered double digit growth across all regions in FY22.
NZX-listed Kiwi Property’s (KPG) underlying profit grew +12.3% in the 2022 financial year, and it plans to focus on picking up its share price in 2023.
My Food Bag (MFB) is looking at expanding into food manufacturing and offering products other than food to its customers, as it eyes M&A opportunities this year.
Auckland shopping mall Sylvia Park, owned by Kiwi Property (KPG), is set to be powered by the country’s largest rooftop solar array later this year.
Tourism Holdings (THL) expects to report a statutory net loss after tax for the financial year ending June 30 of between NZ$2m and NZ$4m, with an underlying net loss in the range of NZ$4.7m to NZ$6.7m. The difference includes gains on the sale of Mighway, ShareACamper, and Togo, as well as NZ$5.1m of transactions costs relating to its potential acquisition of Apollo Tourism & Leisure (ATL).
- Arvida Group (ARV) FY22 Result
- Napier Port Holdings (NPH) FY22 Result