Investors in better heart before earnings reports

Investors stuck to the sidelines yesterday but look to be in better heart ahead of earnings season, with volumes showing some signs of life and the S&P/NZX 50 index adding 2 per cent over the week. The S&P/NZX 50 index slipped 7 points, or 0.1 per cent yesterday, to 11,728.47. Turnover on the main board was a quiet $100.5m. “Activity-wise, we have seen a bit of a turnaround in sentiment over the last week, with bonds coming off their highs and markets all positive overseas,” said Bryon Burke, head of equities at Craigs Investment Partners. “There’s quite a different feel to the market at the moment, and people have a little bit more confidence.” He noted the US had a fairly positive reporting season. “At this stage, the market is expecting the same sort of thing, where companies will meet analysts’ expectations.”

More than halfway into the secondquarter reporting period, S&P 500 company earnings are estimated to have increased 8.1 per cent over the same quarter a year ago, compared with a 5.6 per cent estimate at the start of July, according to IBES data from Refinitiv as of Tuesday, Reuters reported.

The first big New Zealand company to report is Contact Energy on August 15, and Jarden is tipping earnings before interest, taxes, depreciation, and amortisation of $537m versus the market consensus of $520m. Contact Energy yesterday added 0.4 per cent to $7.68.

On the Covid front, Jarden said it expects the 2022 financial year to mark the end of underlying losses for Auckland International Airport as travel resumes. Auckland Airport shed 0.3 per cent to $7.73. For Air New Zealand, which was unchanged at 62c, “while we expect top-line momentum to rebuild slowly, financial losses could still be a reality into FY23”, it said. Meanwhile, on the earnings front, T&G Global, the fruit marketer controlled by Germany’s BayWa, said its net profit rose to $5.8m, or 2.4c per share, for the six months to June 30, versus $3.4m or 0.6c a share in the months to June 30,

2021. T&G Global, which is tightly held, fell

1.5 per cent to $2.70.

NZ Automotive Investments was unchanged at 53c. The NZX’s market regulator has asked NZ Automotive Investments’ board of directors to provide an assessment as to whether their proposed replacements can be considered independent. NZX listing rules require a company to have at least two independent directors. Failure to meet these requirements may lead to it suspending trading in NZAI shares.

A2 Milk was unchanged at $5.58, having gained this week on the hope that it might yet get approval to export infant formula to the United States.