Yovich & Co. Weekly Update - 18 February 2013

Feb 18, 2013 | Commentary

This Weeks Themes

• The NZ market was for the second week in a row slightly weaker as reporting season kicks off.

• The Aussie market is on a 6 week winning streak, rallying 6.6% since the second week of the year. CBA reported well ahead of expectations and spurred the market higher.

• U.S. markets were little changed with a batch of US economic indicators broadly in line with market expectations.

• The NZD hit a post float high on a trade weighted basis as traders look favourably on economic growth and the possibility of interest rate rises sooner than has been previously assumed.

Investment News

Steel & Tube (STU.NZ) – First Half 2013 Result:

The result was slightly improved compared to the second half of 2012 with earnings of $11 million. Management gave guidance that they expect the second half of 2013 to be ahead of this result on volume benefits from the Christchurch rebuild. Quote activity throughout New Zealand has picked up in the construction sector but manufacturing and rural sectors remain flat. A final dividend of 6.5 cents per share was declared, in line with the previous dividend in September 2012. First NZ Capital has assigned the stock an outperform recommendation and 12 month price target of $2.95, current price is $2.66.

ANZ Bank (ANZ.NZ) – Trading Update:

ANZ reported first quarter earnings of AUD1.53 billion, up 6.2% on the previous corresponding quarter. Revenue growth was constrained but there was reasonable volume growth from the Asian business. Balance growth was also reasonable with market share gains in Australian mortgages and deposits with good momentum in the commercial space. Overall, the result was positive with Credit Suisse increasing the 12 month Price Target to $30.50 from $28.00 with an outperform rating.

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Jarrod Goodall



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