Advertise with NZME.<\/a>Holding pattern<\/p>\nThe New Zealand sharemarket looks to be in a holding pattern while other markets soar.<\/p>\n
The S&P\/NZX50 Index, which includes dividend payments, has lost about 2.4% in the year to date while the S&P\/NZX50 Capital Index, which excludes dividends, fared worse \u2013 dropping 3.8% over the same period.<\/p>\n
\u201cIt\u2019s nothing to panic about or be particularly worried about, but it\u2019s also nothing to be excited about for investors,\u201d Craigs Investment director Mark Lister said.<\/p>\n
\u201cAnd the housing market probably looks quite similar.\u201d<\/p>\n
\u201cIt\u2019s been a very lacklustre year.<\/p>\n
\u201cIt has not fallen out of bed, but it hasn\u2019t really gone up either \u2013 down six out of the past seven months.<\/p>\n
\u201cWhether you\u2019ve been in New Zealand shares, whether you\u2019ve been in New Zealand property, or whether you\u2019ve been in commercial property, they\u2019ve all been pretty flat to slightly down, which is in contrast to what we\u2019ve seen internationally.\u201d<\/p>\n
So far this year, the UK market has gained 10%, the US 7%, Australia 6%, Europe 8% and emerging markets up 16%.<\/p>\n
Lister said last year reaffirmed to investors the importance of international exposure.<\/p>\n
\u201cIf you had been too hunkered down in New Zealand, you would have left money on the table, and it\u2019s been the same again this year.\u201d<\/p>\n
Interestingly, New Zealand bonds have actually done better.<\/p>\n
\u201cSo the boring stuff has performed better than the more exciting stuff in New Zealand, at least this year,\u201d Lister said.<\/p>\n
\u201cAnd you\u2019ve been better off if you\u2019ve gone overseas, in terms of investing, so we\u2019re still waiting for that recovery, both in the housing market and in the sharemarket.\u201d<\/p>\n
Expensive CBA?<\/p>\n
Commonwealth Bank of Australia (CBA), Australia\u2019s largest listed bank and the owner of ASB in New Zealand, has been a thorn in many active managers\u2019 portfolios for a while, Fisher Funds portfolio manager \u2013 Australian equities Robbie Urquhart said.<\/p>\n
It has the largest weighting in the ASX200 index, and its share price has had a stellar run, returning over 50% in the year to June 30.<\/p>\n
\u201cThe problem for many active managers is that they\u2019ve held CBA at a lower weighting than its index weight (over 10% of the index),\u201d Urquhart said.<\/p>\n
\u201cSo this share price performance has been a big headwind to overcome for managers seeking to \u2018beat the market\u2019.\u201d<\/p>\n
Urquhart said CBA is \u201cunequivocally well run\u201d.<\/p>\n
\u201cThe reason fund managers have been underweight largely comes down to valuation.<\/p>\n
\u201cCBA\u2019s earnings growth has been anaemic, and its share price move has been largely about multiple expansion.\u201d<\/p>\n
In other words, CBA has become expensive.<\/p>\n
The big change we\u2019ve seen on the ASX this month is that CBA\u2019s share price performance has reversed, Urquhart said.<\/p>\n
Buoyed by rising commodity prices, easing trade war concerns and talk of potentially large infrastructure projects in China, the beleaguered mining and resources companies have finally sprung to life.<\/p>\n
Large, diversified miners BHP and Rio Tinto have returned 14% and 12% respectively in July thus far, strongly outperforming the index.<\/p>\n
In contrast, CBA has been the casualty \u2013 falling 6%.<\/p>\n
\u201cThis is suggestive of Australian investors selling CBA to fund buying in resources names,\u201d Urquhart said.<\/p>\n
\u201cThe big question is whether this is temporary, or the start of a more enduring trend.\u201d<\/p>\n
As the reporting season nears, all eyes will be on the results from Aussie heavyweights CBA, BHP and Rio Tinto.<\/p>\n
24-hour trading?<\/p>\n
London Stock Exchange Group is weighing up whether to launch 24-hour trading as bourses race to extend access to stocks amid growing demand from small investors active outside normal business hours, the Financial Times reports.<\/p>\n
The group is looking into the practicalities of increasing its trading hours, according to people familiar with the situation, from the technology required to regulatory implications, the paper said.<\/p>\n
Outlook<\/p>\n
Looking ahead, Wednesday has annual meetings for Ryman Healthcare <\/a>and Mainfreight, and the market will be expecting a heads-up from both companies regarding their expected earnings for the current 2026 financial year.<\/p>\nRyman, which has been beaten up by the market over poor earnings and a couple of big capital raises, has seen its share price improve in recent weeks.<\/p>\n
Mainfreight \u2013 with its strong links to the global economy \u2013 will also be closely watched.<\/p>\n
Later in the week, second-quarter results from Apple, Amazon and Microsoft \u2013 a fair whack of America\u2019s so-called Magnificent Seven \u2013 are due out.<\/p>\n
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cIn line with Sky, we assume DNZ will generate $10 million ebitda [earnings before interest, tax, depreciation and…\n","protected":false},"author":2,"featured_media":19764,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[20615,13652,64,63,20617,8879,7136,13110,1043,20608,134,20612,20616,20609,4694,312,20611,20610,5473,6449,20614,320,20613,427],"class_list":["post-19763","post","type-post","status-publish","format-standard","has-post-thumbnail","category-tv","tag-acquisition","tag-amid","tag-au","tag-australia","tag-basis","tag-cash","tag-deal","tag-debt","tag-discovery","tag-doldrums","tag-entertainment","tag-given","tag-leasefree","tag-likes","tag-market","tag-network","tag-sharemarket","tag-skytv3","tag-stock","tag-takes","tag-televisions","tag-the","tag-thumbsup","tag-tv"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/19763","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=19763"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/19763\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/19764"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=19763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=19763"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=19763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}