Fletcher’s residential arm in view amid auction reports
NAB is next up in the Aussie bank earnings season.
Fletcher Building is back in the headlines with reports across the Tasman that its residential arm has three suitors as the broader housing market braces for the Middle East conflict to drive up costs and potentially cool activity later this year.
Australian futures are pointing to a soft start to the week when trading opens across the Tasman, with National Australia Bank next out of the blocks among three of the big four lenders reporting and as a rate hike beckons from the Reserve Bank of Australia on Tuesday.
New Zealand prime minister Christopher Luxon is in Singapore to sign a deal with the South-East Asian nation to firm up fuel supplies amid the global energy shock, as the US weighs up the latest offer from Iran for a lasting peace.
And Wall Street provided a stronger lead for tech stocks as the Nasdaq Composite was buoyed by Apple beating earnings expectations.
Slimming down
Fletcher Building’s efforts to streamline its business to a focused building materials firm are continuing, with the Australian Financial Review’s Street Talk column reporting bids are due for its residential development arm in the coming weeks, with three potential bidders.
Venture capital firm Altered Capital has been touted as an interested party, with Auckland developer Love & Co and New York private equity firm Cerberus Capital Management said to be in the mix.
New building activity is expected to cool later this year as the Middle East conflict and subsequent energy shock drive up construction costs, keeping developers cautious about starting new projects.
Fletcher shares rose 4.7% last week, the building materials firm’s best week since December in what’s been a subdued year for the company.
Meanwhile, Australian futures are pointing to a 0.3% decline for the S&P/ASX 200 index when trading starts across the Tasman, with NAB’s first-half earnings the main event of the day.
The bank said it would recognise increased provisioning in the period to acknowledge the Middle East conflict’s potential impact on bad debts.
Banking profits
ANZ Group Holdings last week reported a sharp lift in first-half earnings as it clamped down on costs, with investors less convinced about its ability to grow revenue. Westpac Banking Corp is due to report on Tuesday.
The Reserve Bank of Australia will review monetary policy on Tuesday, and is expected to hike the target cash rate a quarter-point to 4.35%, with bond traders pricing in 20 basis points of increases.
“The RBA is widely expected to raise rates for a third consecutive meeting tomorrow, although this is not certain given the narrow voting margin at the previous meeting,” Bank of New Zealand senior market strategist Jason Wong said in a note. “Following major central bank meetings last week, many policymakers will deliver speeches now that the blackout period has ended.”
The kiwi dollar traded at 81.98 Australian cents at 7am in Auckland from 81.96 cents last week.
New Zealand’s prime minister Luxon is leading a delegation to Singapore where he’ll sign an agreement on trade in essential supplies, firming up the nation’s energy supply as the Middle East conflict drags on.
The Polymarket prediction market is pricing in a 19% chance of a permanent peace between the US and Iran by the end of this month and a 37% chance by the end of June.
US President Donald Trump said he’ll review Iran’s latest offer, which includes setting a one-month deadline to reopen the Strait of Hormuz and the US naval blockade.
Brent crude oil futures fell 1.4% to US$108.83 a barrel, while stocks on Wall Street were mixed as the tech-heavy Nasdaq climbed 0.9% while the Dow Jones Industrial Average dipped 0.3%.
Better-than-expected earnings from Apple buoyed tech companies, while biotech firm Amgen led the Dow lower, with 3M and McDonald’s Corp among those weighing on the blue-chip index and energy companies including Chevron following oil prices lower.
Airlines such as Air New Zealand and ASX-listed Qantas Airways and Virgin Australia will be in view after US discount carrier Spirit Airlines ceased operations over the weekend after failing to secure creditor support for a government bailout.
No local data are due today, with March quarter employment figures on Wednesday the major release from Statistics New Zealand this week.
Reporting by Paul McBeth. Image from Greyson Joralemon on Unsplash.
