Yovich & Co. Market Update - 13 June 2016

Jun 13, 2016 | Commentary

Changes in Market

 

Market Themes

  • Although markets have softened over the past week due to rising concerns that Britain will leave the European Union, most markets are still up over the last month.

  • Sky TV was up 9% last week with the market reacting positively to news that they were looking at merging with Vodafone. The merged entity would be expected to be in a better position to compete against new competition from streaming and internet based content providers.

  • The RBNZ left the OCR at 2.25% last week with Governor Graeme Wheeler identifying a reduction in global financial market volatility, a modest recovery in commodity prices over recent months, and the domestic economy continuing to be supported by strong net migration, construction and tourism as reasons to remain stable with monetary policy.

  • The prolonged rally in Oil prices continues to help the S&P 500 higher and within striking distance of a new all time high. The West Texas Intermediate price for Oil traded above $50 last week for the first time in six months.

  • The less dovish tone from Graeme Wheeler gave traders a reason to buy the Kiwi this week. The Kiwi finished the week above 70 cents US and 95 cents Aussie.

Investment News

Fisher & Paykel Healthcare – Full Year Result

Fisher & Paykel Healthcare reported a full year profit of $143.4m, an increase of 27% on last year.  It is continuing to benefit from strong demand for medical devices that help to treat conditions such as sleep apnoea.  The operating revenue was up 21% to $815.5m.  The final dividend is up 25% to 10 cents.  At current exchange rates the 2017 operating revenue is expected to be approximately  $900m and tax paid profit approximately $165m.

Investment News







Stride Property – Full Year Result

Stride Property (formerly DNZ Property) reported a tax paid profit of $92.4m up 34% on last year.  Portfolio value is $1.274 billion up from $872.4m last year.  In October 2015 Stride established Investor Property Ltd as a subsidiary to invest in large format retail property.  It has 39 properties with a total value of $641.4m.  Stride is distributing to its Shareholders one share in Investor Property ltd for every four shares in Stride.

It will also make an initial public offering to its shareholders and other investors at an indicative price range of $1.37 - $1.49.  The implied cash dividend yield for is 5.1% - 5.3% and gross yield is 7.6% - 8%.

 

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Jarrod Goodall



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