Market News
| NZX 50G | All Ords | Shanghai | FTSE | Dow | NASDAQ | NZDAUD | NZDUSD | OCR | |
| Previous Week 7th February | 12902.19 | 8780.28 | 3303.67 | 8700.53 | 44303.40 | 19523.40 | 0.9039 | 0.5660 | 4.25% |
| Week Close 14th February | 12989.18 | 8825.09 | 3346.72 | 8732.46 | 44546.08 | 20026.77 | 0.9021 | 0.5731 | 4.25% |
| Change | 0.67% | 0.51% | 1.30% | 0.37% | 0.55% | 2.58% | -0.20% | 1.26% | 0.00% |
The NZX 50 Index climbed 0.67% over the past week, closing at 12,989.18. This was primarily driven by expectations of a 0.50% cut to the Official Cash Rate on Wednesday, which would bring the Official Cash rate to 3.75%. Economists widely feel this will be the case and some banks have already lowered their mortgage rates in anticipation. Fisher & Paykel Healthcare rose 1.57% after share decline the previous week which helped bring the index up.
In Australia, the All-Ordinaries Index gained 0.51% over the week, supported in part by a stronger Australian dollar against the U.S. dollar. However, the index was weighed down by sharp declines in Cochlear and AMP, both of which saw double-digit losses following disappointing earnings results.
Chinese stocks rose on Friday, with the Shanghai Composite Index gaining 0.43% to close at 3,346.72 points. The index ended the week up 1.30%. The surge has been largely driven by ongoing government stimulus measures and the growing focus on artificial intelligence. With Beijing prioritising AI as a national initiative, investors are reassessing China’s tech and innovation potential. U.S. President Donald Trump announced a delay in implementing reciprocal tariffs until April and TikTok returned on the U.S. app stores of Apple and Google.
In the UK, the FTSE 100 Index gained 0.37%. The Pound climbed above $1.26 as the US dollar dips after disappointing retail sales. NatWest shares fall despite positive earnings following high expectations, while exporters weigh on the FTSE 100. There is also some optimism in the market around more monetary easing and hopes of an end to the Russia-Ukraine war.
In the United States, U.S. stocks were mixed, but ending the week with the Nasdaq rising 2.58%, and the Dow up 0.55%. Airbnb surged over 14% on strong earnings, Nvidia was up over 2.6% while Apple was up 1.3%. U.S. retail sales dropped 0.9%, pushing Treasury yields and the dollar lower as investors reassessed interest rate expectations and potential tariff impacts. Trump tasked his economic team on Thursday to devise plans for reciprocal tariffs on every country taxing U.S. import, although the directive stopped short of imposing fresh tariffs.
Weekly Market Movers
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Source: Iress
Investment News
Skellerup Limited (SKL.NZ)
Skellerup reported a record first-half profit, driven by a strong rebound in its agricultural division, while also preparing for potential U.S. tariff increases. For the six months ending December, net profit rose to $24.2 million, with revenue increasing to $165.3 million and underlying profit reaching $35.0 million. The company raised its gross interim dividend to 10.75 cents per share and expects full-year profit between $52 million and $56 million, though the upper range of guidance was lowered by $1 million.
Current Share Price: $5.30 Consensus Target Price: $5.63, Consensus Forecast Dividend Yield: 5.5%, Total Return: 11.7%
Vulcan Steel Limited (VSL.NZ)
Vulcan’s share price jumped 9.96% last week after the company reported its first-half 2025 earnings. EBITDA came in at NZ$57 million, beating estimates but still down 30% from the previous year. The dividend was reduced from 12 cents to 2.5 cents, as expected, with a further cut to the year-end payout range. While no full-year guidance was provided, the company noted signs of improvement for the next quarter. Following the update, forecasts for full-year EBITDA have been revised slightly higher from NZ$107 million to NZ$110 million.
Current Share Price: $8.60 Consensus Target Price: $7.83, Consensus Forecast Dividend Yield: 0.87%, Total Return: -8.5%
A2 Milk Limited (ATM.NZ)
A2 Milk reported strong first-half 2025 results, with revenue rising 10.1% to $893.8 million and net profit increasing 7.6% to $91.7 million, despite temporary supply constraints impacting margins. EBITDA grew 5% to $118.9 million, including $8 million in one-off airfreight costs, while earnings per share rose 7.4% to 12.7 cents. The company has announced its maiden dividend of 8.5 cents per share, representing a 67% payout ratio. ATM is using its vast cash reserves (forecasted to be over $1 billion within the next few years), and future profits to underpin its dividend policy. With upgraded full-year guidance and strong cash flow, A2 Milk’s share price surged over 13% as of market open on 17th February.
Current Share Price: $7.54 Consensus Target Price: $6.87, Consensus Forecast Dividend Yield: 1.7%, Total Return: -7.2%
Over the past few years, we have developed our own Risk Profiler to help clients make informed investment decisions. Now, we are making this tool available to everyone. Unlike many risk-profiling tools designed primarily for regulatory compliance, ours is built on practical experience and a deep understanding of investor behavior, both of which are essential in managing personalised portfolios.
We have refined our approach based on industry best practices, including principles outlined in the CFA Institute's Investment Risk Profiling: A Guide for Financial Advisors, along with insights from working with clients. This has helped us develop a structured yet practical tool that assesses two key dimensions:
This tool provides a structured foundation for us, as your financial adviser, to analyse and discuss how these factors interact to aid in portfolio construction decisions.
While “risk need” is a separate consideration primarily determined by the required rate of return (ROR), our process ensures that risk-taking ability and behavioural loss tolerance are effectively reconciled into a portfolio strategy tailored to your investment profile. We cover the “risk need’ concept in our Goals and Objectives sections of our fact find.
The feasibility of an investor’s ROR is assessed based on market conditions, financial objectives, and the level of volatility they are willing to accept to achieve that return. Ultimately, these factors determine whether an investor’s desired ROR is realistic and sustainable, as they are directly tied to risk-taking ability and behavioural loss tolerance.
For investors with high return expectations but a limited risk appetite, this typically leads to two key considerations: increasing contributions or extending the investment timeframe to achieve their financial goals without taking on excessive risk.
Given our extensive discussion on risk, it’s worth clarifying what it means in this context. Here, risk refers to the potential for financial loss in an investment decision, typically measured by downside portfolio standard deviation or, more simply, volatility.
How It Works: A Structured Approach to Risk Profiling
Expanding on the concepts of Risk-Taking Ability and Behavioural Loss Tolerance, it is essential to understand how these factors influence investment decisions. Risk-Taking Ability determines how much financial risk an investor can afford based on objective factors such as investment horizon, liquidity needs, and financial capacity.
Assessing Risk-Taking Ability
An investor’s Risk-Taking Ability is shaped by three key factors:
Risk-Taking Ability Levels
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Assessing Behaviour Loss Tolerance
While Risk-Taking Ability can be measured using objective financial data, Behavioural Loss Tolerance is more complex and unique to each investor. Unlike time horizons or liquidity needs, which can be quantified using financial models, behavioural factors require deeper evaluation. These insights are typically gathered through structured questionnaires, investor discussions, and, in some cases, an analysis of past asset allocation decisions. Relying on a single input can lead to a misinterpretation of an investor’s ability to handle market fluctuations.
Key Elements of Behavioural Loss Tolerance
An investor’s Behavioural Loss Tolerance is shaped by six key elements:
Behavioural Loss Tolerance Levels
By incorporating these behavioural factors, our Risk Profiler provides a well-rounded assessment, ensuring that investors' portfolios align with both their financial capacity and emotional tolerance for risk.
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Understanding Your Risk Profile
Investment decisions should be guided by more than just gut instinct. Our Risk Profiler provides a structured assessment of your investment approach using a traffic light system to evaluate how well your Behavioural Loss Tolerance aligns with your Risk-Taking Ability.
Traffic Light System
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Green Light: Your Behaviour Loss Tolerance matches your Risk-Taking Ability, indicating a well-balanced investment approach.
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Yellow Light: Your Behaviour Loss Tolerance is lower than your Risk-Taking Ability, meaning your investment profile is more conservative than your ability allows. You may want to consider a higher-risk profile to pursue better long-term returns.
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Red Light: Your Behaviour Loss Tolerance is higher than your Risk-Taking Ability, which limits your investment risk level. This could restrict your ability to achieve higher long-term returns.
Once we determine your Behavioural Loss Tolerance and Risk-Taking Ability, we classify you into one of the following investment profiles. This classification serves as an essential discussion point between you and your financial adviser, particularly when there is a mismatch between your willingness to take risk and your financial capacity to do so. At this stage, a deeper conversation can help align these factors, ensuring that your portfolio is structured to best support your investment goals.
Portfolio Composition: Income vs Growth Assets & Strategic Asset Allocation
By default, the lower scoring factor between Risk-Taking Ability and Behavioural Loss Tolerance determines the portfolio composition. However, in cases of misalignment, adjustments may be made based on improved understanding through discussion. This is where subjectivity and professional expertise come into play, ensuring the portfolio reflects both financial realities and an investor’s evolving risk perspective. A change in circumstances and financial situation may also impact an investor’s risk profile, requiring adjustments to the portfolio to maintain alignment with their evolving objectives.
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Strategic Asset Allocation (SAA) serves as the foundation for long-term investment performance, typically over a period of 10 years or more. Taking into perspective correlation and diversification, which are key in managing overall portfolio risk, SAA further categorises portfolio composition across multiple asset classes, including New Zealand, Australian, and international markets, ensuring effective risk management. However, regular reviews are conducted to maintain robustness and ensure the allocation remains aligned with evolving market conditions and client requirements.
Why It Matters
Understanding your investment risk profile is essential to ensuring that your financial strategy aligns with your goals, time horizon, and comfort with risk. A well-structured approach balances risk need, risk-taking ability, and behavioural loss tolerance, helping you build a portfolio that works for you - not against you.
Our Risk Profiler takes the guesswork out of the process by providing a clear and objective assessment of your investment profile. Whether you're a conservative investor looking to protect your wealth or a growth-focused investor seeking higher returns, knowing your risk profile is the first step toward making informed, confident investment decisions.
Ready to discover your risk profile? Click on the following link to get your results.
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Source: Iress
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Disclaimer: “Yovich & Co Limited believes the information in this publication is correct, and it has reasonable grounds for any opinion or recommendation found within this publication on the date of this publication. However, no liability is accepted for any loss or damage incurred by any person as a result of any error in any information, opinion or recommendation in this publication. Nothing in this publication is, or should be taken as, an offer, invitation or recommendation to buy, sell or retain any investment in or make any deposit with any person. The information contained in this publication is general in nature. It may not be relevant to individual circumstances. Before making any investment, insurance or other financial decisions, you should consult a professional financial adviser. This publication is for the use of persons in New Zealand only. Copyright in this publication is owned by Yovich & Co Limited. You must not reproduce or distribute content from this publication or any part of it without prior permission
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