Travel software business Serko prepares for post-Covid takeoff, plus Singapore Airlines thinks laterally, offering customers the chance to experience First Class on the ground in an A-380

Serko capital raising in hot demand

Corporate travel software company Serko achieved a rare milestone on Friday, raising $47.5 million in an oversubscribed placement at $4.55 per share, an almost 1 percent premium to its previous closing price. All other capital raisings this year have been at a discount to the previous closing price.

Serko shares jumped 4.2 percent to $4.70 when trading resumed on Friday reinforcing the strong support it currently enjoys from investors wanting to get access to growth stocks in the digital sector as was seen earlier in the year with Pushpay.

The company is targeting annual revenue of $100 million – post Covid-19 – and has identified several new growth opportunities it plans to pursue. The latest capital raising will allow it to add to the $33.6 million it already has in reserve.

Total revenues for the past six months are estimated at less than $5 million due to the continuing border closure.

Serko said the new money will be used to upgrade some software for the changing market, to scale the platform for international expansion, and possibly fund small acquisitions.

It is also seeking a further $10 million through a share purchase plan for eligible retail shareholders.

Serko closed up 5.8 percent on Friday at $4.77 having gained 55 percent since mid-August.

Auckland real estate sales jump 42 percent for Barfoot & Thompson

Auckland’s largest real estate agency, Barfoot and Thompson, said its sales in September were the highest for any month since 2017.

A total of 1,099 sales were completed during the month, up 42.5 percent from a year earlier. That was bolstered by 1,947 new listings, a 44 percent jump from August.

Managing director Peter Thompson said a much-needed increase in listings had reduced some of the competition for properties that had been fuelling price increases. The average price remained relatively unchanged at $996,945, which he said “showed confidence that prices will hold for the medium term.”

Affordability also continued to improve as a result of record low interest rates. An average 37 percent of household income is now required to service a mortgage, the lowest level in seven years.

One-way travel corridor set to open

The border is set for a limited reopening in two weeks for the first time since it was closed in March.

New Zealanders seeking an overseas travel fix will be able to fly into New South Wales and the Northern Territory without having to go through quarantine, although the reverse corridor into New Zealand isn’t yet open to Australians.

Australia’s Deputy Prime Minister, Michael McCormack, announced the first phase of the trans-Tasman bubble on Friday saying travellers who have been in NZ for 14 days are welcome to fly into Sydney or Darwin from October 16.

McCormack today said Qantas Airways and Virgin Australia bosses were obviously pleased by the decision.

“I know they want to see planes in the air across the Tasman, because we’ve said all along, planes in the air means jobs on the ground’,” he said.

Air NZ shares rallied on the news gaining 7.2 percent to close at five-week high of $1.49 in the last hour of trade on Friday, while Qantas shares were more muted gaining just 1.2 percent.

McCormack said this was the first phase of the trans-Tasman bubble and the federal government would gauge its success before expanding it.

Consumer confidence remains subdued

Perhaps not surprisingly, consumers are not rushing out to spend-up large, despite record low interest rates, according to the latest ANZ-Roy Morgan consumer confidence survey.

And with the start of the annual Christmas shopping season now only six weeks away, all indications are that sales this year are likely to be well down on 2019.

The survey’s consumer confidence index was virtually unchanged at 100, well below the long-run average of 120, and holding near the same level as 2009 when job losses were mounting during the global financial crisis.

The survey of 997 people showed a net 2 percent felt their finances were in a worse state than a year earlier, having been just in positive territory during August, while a net 22 percent expect to be better off in a year’s time, down from 27 percent.

The outlook for the economy remained subdued with a net 35 percent seeing tough times over the coming year, although, a net 15 percent were more optimistic over a five-year period.

The retail outlook is also tough, with a net 1 percent saying it’s a bad time to make a major purchase, a small improvement on the 3 percent.

NZ stocks little changes last week, oil prices slide

The New Zealand sharemarket was little changed last week gaining just 0.2 percent to close at 11,822, despite market leader A2 Milk’s share price slumping 17.4 percent while out of favour Fletcher Building closed above $4.00 for the first time since early June ahead of its AGM next month. Air New Zealand shares rebounded 7.2 percent on news of the opening of a new one-way corridor route to New South Wales and the Northern Territory.

Across the Tasman, the ASX200 fell 3 percent for the week to end at 5791, while in the US the benchmark S&P500 index gained 1.5 percent for the week to close at 3348. Investors will be closely following updates on the condition of US President Donald Trump following his admission to hospital on Friday after testing positive for Covid-19.

Brent Crude Oil futures fell 6.23 percent for the week to US$39.27, a four-month low, as concerns mount that the slower than expected recovery in the global economy will reduce oil demand weighed on prices.

Gold prices lifted 2.1 percent to US$1898/oz while the NZ dollar gained 1.4 percent to close at US$66.37.

Many job losses in the US are permanent according to new Labour Department data

While new data shows the US has recovered around half the jobs lost during the pandemic, there’s mounting evidence that millions of jobs have vanished forever.

The number of unemployed classified as ‘permanently losing their old jobs’ climbed by 345,000 in September to a seven-year high of 3.8 million, according to seasonally adjusted data from the US Bureau of Labour Statistics.

What many initially hoped were furloughs or temporary job losses are becoming permanent as businesses shut down and cut costs. This closely watched labour market measure has nearly tripled since sinking to a 19-year low in February, just before the pandemic erupted in the US.

The surge of permanently unemployed Americans provides stark evidence of the scarring effects caused by the health crisis.

Forecasters describe it as an ominous sign of the growing level of entrenched unemployment in the US labour market.

When Americans are laid off, the Labor Department classifies some as on temporary layoff. Those layoffs classified as permanent are people who have either just completed a temporary job or have lost their position for good, meaning the job isn’t coming back.

In a worrying trend for the world’s largest economy, the percentage of unemployed Americans classified as permanently unemployed rose to 35.6% in September, up from just 11.1% in April.

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Singapore Airlines gets innovative with new flightless product offerings

Ever wanted to experience what it’s like to travel first class in your own private suite on Singapore Airlines at a fraction of the normal price? Well now you can, but there’s just one catch – the aircraft remains on the ground for the entire duration of your “flight.”

After abandoning its original plans for destination-less flights – where you take off and land at Singapore’s Changi Airport — the airline is now favouring ground-based activities designed to relive the feeling of air travel.

For two days this month, the airline will let customers dine inside an A380 double-decker superjumbo “restaurant.” Customers can eat Singapore Airlines dishes while watching movies on the plane’s in-flight entertainment system.

Prices range from SGD$50 (NZ$55) to dine in economy class, through to SGD$600 ($660) for your own private suite.

The company is also creating tours of its SIA Training Centre, with optional flight simulator training sessions, junior cabin crew activities for kids, and grooming workshops with Singapore Airline’s famously immaculate flight attendants.

Plus, a third service doesn’t require customers to even leave the house launching a new initiative called SIA@Home. Singapore residents will be able to order first-class and business-class food delivered straight to their homes. There’s even an option to book a private chef who will reheat, plate and serve the meals for you.

Andrew Patterson is Newsroom's Markets Editor and has worked for decades as a financial journalist, radio presenter and editor with Australia's ABC, Radio Live and NBR.

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