Yovich & Co. Market Update - 22 July 2020

Jul 21, 2020 | Commentary

22 July 2020

New Zealand Equities

Market update 2020-07-22

In summary, last week the NZ50G saw 14 companies on the downside, 1 remained unchanged and 35 on the upside. The Consumer Price Index (CPI) out last week fell 0.5% over Q2 to 1.5%. Transport costs (mainly fuel) is one of the goods assessed when evaluating CPI which fell 4.9%, driven by lower fuel prices and demand. The annual domestic (non-tradeable) inflation topped 3% for the fourth quarter in a row. The non-tradeable inflation measures goods and services that do not face foreign competition. It includes housing-related costs such as rent, construction, property rates, and many domestic services. Migration data for May showed, 2,626 residents arrived into the country, while 3,057 departed for a net loss of 431 NZ residents. Including non-residents, 5,662 people arrived into NZ in May, but 10,231 people left. The BNZ Performance of Service Index (PSI) was 54.1 which is 16.6 points up from May (a PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).

Biggest movers 2020-07-22

Investment News

PGG Wrightson

Has released its trading update, expected operating EBITA for the full year to 30 June 2020 is $23 to $24m. PGW Chairman, Rodger Finlay said that “Whilst our results remain subject to completion and audit, this is a pleasing financial result in what has been an extraordinary year.  The audited financial results and any dividend will be announced on 18 August 2020. Current Share Price: $2.92, Price/NTA: 1.52, EPS: $1.07, PE ratio: 2.77, Gross dividend yield:  7.66%.

Betashares U.S Equities Strong Bear Hedge Fund (BBUS)

This ETF provides investors a hedge against the fall of the S&P 500 Total Return Index (SP500TR). The BBUS.awx seeks to generate magnified returns that are negatively correlated to the returns of the U.S. share market. The Fund expects to generate a magnified positive return when the S&P 500 Total Return Index falls (and a magnified negative return when the index rises). If there is a 1% fall in the U.S. share market on a given day you can generally expect a 2% to 2.75% increase in the value of the Fund (and vice versa). Click on the factsheet link to view greater detail https://www.betashares.com.au/files/factsheets/BBUS-Factsheet.pdf Current Share Price: AU$2.31.

Invesco QQQ Trust

As the US stock market continues to climb despite the increased cases of COVID-19. The Tech sector has done remarkably well. The QQQ.nas EFT provides investors exposure to many different Tech companies with the majority in the USA including Tesla, Facebook, Amazon, Apple and Netflix. This link provides in-depth information https://www.invesco.com/us/qqq-etf/holdings Current Share Price: US$264.

Cannasouth

Through its joint venture subsidiary, Cannasouth Cultivation Limited (CCL), Cannasouth Limited (CBD.nz), has entered into a service agreement with EAH Enterprise LLC trading as Vera Cultivation in Colorado USA. Vera is a US market leader in the production of high-quality cannabis product using world class and proprietary growing systems. The agreement is for the supply of services to finalise the design of CCL’s cultivation facility, develop (licensed) operating systems and procedures, and provide support for the rapid and successful implementation of CCL’s state-of-the art growing facilities. Cannasouth share price has responded positively to the news increasing 5.77% at time of writing. Current Share Price: $0.55, Price/NTA: 10.99.

Below is a list of upcoming listed NZ companies’ financial reports (source NZX website)

NZX company report 2020-07-22

 

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Nathanael McDonald



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