Yovich & Co. Weekly Update - 1 July 2013
Jul 1, 2013 | Commentary
This Week’s Themes
- Western markets bounced back this week, marking the end of the six week long downward trend.
- The ANZ Business Outlook reported that Business Confidence is close to record highs, levels which it hasn’t reached since the late 1990’s. The strongest sentiment is in the construction sector on the back of the Christchurch Rebuild and the requirement for more homes to be built in Auckland.
- The positive feeling flowed through to the market where the NZX outperformed the other markets I follow.
- Kevin Rudd finally, after several failed attempts, took control of the Australian parliament with the intention of righting the ship before the next election. The rally on the ASX was modest given how hard it has been hit over the past 2 months.
- Positive U.S economic data helped markets bounce off recent lows, despite the threat of a tapering off in stimulus.
- NZD fell further against the USD as the carry trade continued to be unwound.
Preferred Property Investments
The correction in the market has brought prices in the property stocks back to a level where we see value in them again. We are still positive on the property sector because of the high yields, demand for property and high business confidence. Below is a list of our Preferred Property Investments and their yield.
Argosy Property Limited (ARG.nz) - Renounceable Rights Issue
ARG intends to raise a maximum of $86.9 million of equity, via a 1 for 7 renounceable rights issue. The capital raised will be used to fund the recent acquisitions of the Mangere Distribution Centre and the Vector Centre. The rights have been set at $0.89 per share and are offered at an 8.25% discount to the current share price of $0.97. ARG has outlined the following as the rationale behind the acquisitions; portfolio diversification, greater weighting to Auckland, enhanced exposure to the Industrial Sector and highlights the quality of the assets. The Record Date is 15 July so there is the chance for new shareholders to participate if they buy shares before July 11.
Shares Commentary Investments Weekly Update Market Argosy Property Limited ARG.nz KIP.nz Kiwi Income Property Trust GMT.nz Goodman Property Trust