Stock investors celebrate move to Level 1 by pushing index to within five percent of its late-February peak, while The Warehouse plans to slash 1,000 jobs
Party time: The NZX50 surged more than 3.1 percent yesterday to close at 11,524 after big gains on Wall Street last week and the Government’s move to Level 1 encouraged investors to join in the rally. The index is now less than percent percent below its peak of 12,073 on 21 February.
On fire: Some of yesterdays big gainers included NZME, which jumped 26.9 percent to 33c ahead of its AGM on Thursday, Abano up 11.7 percent continuing its strong run from last week, Kathmandu up 11.5 percent at 1.36 and Air NZ gained 9.1 percent to close at $1.79.
Stores and staff cut: The Warehouse is the latest retailer to announce significant job cuts and store closures. About 700 to 950 store roles are to be cut along with 100 to 130 jobs from the group’s head office in Auckland. The company said many of the store roles are filled by part-time employees, so the losses amount to around 410 full-time equivalents.
Agile? Six stores are to be closed, in addition to three already announced, as part of a proposal to shift the business to a more ‘agile’ operating model. Proposed stores to be closed include: Noel Leeming Henderson Clearance Centre, The Warehouse Whangaparaoa, its Tokoroa, Johnsonville and central Dunedin stores, and Warehouse Stationery Te Awamutu.
Shareholders pleased: Next month the group will close the Birkenhead Warehouse store and open a Noel Leeming Northlink store in Christchurch, which will replace the Papanui and The Palms stores. Warehouse shares rose 4.2 percent on the news to $2.24.
Bar shout? NZME shareholders might be hoping chairman Peter Cullinane uses his windfall paper profit from his recent share purchase to shout them a free round of drinks after the company’s AGM this Thursday. NZX filings show that last week Cullinane, also the founder and CEO of Lewis Road Creamery, brought 200,000 NZME shares at around 24c a piece. Based on today’s closing price of 33c that’s a tidy profit, on paper at least, of $18,000.
Free ice cream please: After seeing the value of their investment decline by 36 percent over the last year, many shareholders are likely to welcome any freebies on offer – which may even extend to a free ice cream as well.
Building slowing: Building activity had already begun to slow in the lead-up to the covid-19 national lockdown, falling a seasonally adjusted 5.7 percent in the March quarter. It’s the biggest quarterly decline since the March quarter in 2011 in the aftermath of the Christchurch earthquakes.
2021 downturn: Stats NZ said seasonal affects and higher construction costs contributed to the decline. Residential construction work shrank 5.8 percent in the quarter and non-residential was down 5.6 percent. Westpac and ASB Bank are both forecasting construction will show a much steeper drop in the second quarter and face a significant downturn in 2021.
Fighting back: Huawei has bought full-page adverts in several British newspapers in an effort to push back on fears over its role in the country’s deployment of 5G. The ads appeared in most of Britain’s national newspapers, including The Guardian, Daily Telegraph, Times, Mirror, Sun and Daily Mail. The ads have also featured in regional newspapers and Huawei said its ad campaign would also extend to business publications, digital platforms and newsletters.
Ads on paper: The Chinese tech giant’s media blitz arrives as it faces fresh attacks from politicians over its involvement in Britain’s 5G rollout. The technology, which replaces 4G as the next generation of mobile internet, has been one of many issues at play in the U.S. trade war with China.
Too good to be true? Questions are being raised about the accuracy of America’s latest blockbuster jobs report with the U.S. government agency responsible for publishing labour market statistics admitting that it is struggling to pin down the actual unemployment rate in the world’s largest economy. The problems include “misclassification” of workers in a key survey, struggles with data collection during the pandemic, and massive flows in and out of jobs.
It depends: With unemployment dropping from 14.7 per cent in April to 13.3 per cent in May, an unexpected improvement, the data came with a caveat: the agency acknowledged that some furloughed employees had been labelled as working but absent, when they should have been classified as temporarily laid off. If not for that mistake, the unemployment rate would have been 3 percentage points higher.
Accuracy questioned: The revelation was not new. In April, closer to the start of the pandemic, the BLS had said the “misclassification error” was in the order of 5 percentage points, which meant the unemployment rate might have neared 20 per cent at the peak of the crisis.