A clear victory for challenger Joe Biden would give markets certainty, but days of doubt remain a possibility – plus more remarkable results for Briscoes

After the impact of Covid-19 on markets this year, investors have been well primed for what could be a volatile 48 hours for financial markets depending on the outcome of today’s US Presidential election.

To date around 100 million Americans have cast their ballots, although historically only around 55 percent of total eligible voters actually vote at all.

A decisive win by former Vice President Joe Biden will doubtless be welcomed by investors with a sense of relief, while a disputed result, where the outcome is close or President Donald Trump claims victory prematurely and ends up in the courts, will likely see markets sell off.

For now, investors are remaining positive and betting the polls will be proven correct with a Biden victory. European markets opened higher, gaining around 1.5 percent, while the S&P500 in the US is up almost 2 percent (at 6.30am NZT).

The NZX50 closed yesterday up 0.5 percent while Australia’s ASX200 also closed higher, gaining 1.9 percent.

When Donald Trump was elected as President in November 2016 the benchmark S&P500 index stood at 2105. It has since gained almost 60 percent in value, though at the peak of the market sell-off in March almost all of the gains during the Trump presidency had been wiped out.

Harmoney releases prospectus ahead of NZX and ASX float

Personal lender Harmoney has released its prospectus ahead of its impending float on both the ASX and NZX later this month.

After allowing for listing costs and payments to existing shareholders, the company will have around A$60 million of new money to lend as it seeks to replicate the success of its New Zealand business across the Tasman.

The size of the personal lending market in Australia is estimated to be around A$150 billion – more than 10 times the size of the local market.

However, the competition is also significantly greater with other technology-driven lenders such as MoneyMe, SocietyOne and Plenti also active in the market as well as buy-now, pay-later providers including Zip Co, Laybuy and Afterpay, whose offerings effectively reduce the demand for personal cash loans.

Harmoney’s prospectus said technology and streamlined lending processes were reducing what had previously been high barriers to entering the personal loan market, where the sector is still largely dominated by the big banks.

Harmoney’s IPO price of A$3.50 per share values the company at A$353 million, more than rival MoneyMe’s current market capitalisation of A$226 million after being sold at A$1.25 last December.

Briscoe Group reports another positive quarter

With a 15 percent lift in third-quarter sales, and consumer confidence holding up, Briscoe Group managing director Rod Duke remains upbeat ahead of the all-important December quarter.

“After trading interruptions due to Covid-19, we’re delighted in the way the group has rebounded to produce consecutive quarterly double-digit sales growth,” he said.

Sales for the 13 weeks ended Oct. 25 were up $21 million at $161.3 million, taking year-to-date sales up 2.4 percent on the prior year.

The result was driven by homeware sales increasing 12.3 percent to $98.7 million and sporting goods up 19.5 percent at $52.4 million.

The company said it was seeing a shift in buying patterns, with a big increase in online trading, which now accounts for 16.3 percent of quarterly sales – while its click and collect option was also proving popular, accounting for 25 percent of online sales.

“I am very confident that with the initiatives we have in place, the group can produce a remarkable full-year result. Just how close we get to achieving last year’s profit will depend on how buoyant trading is across the crucial 4th quarter.”

Briscoe shares initially rose 4 percent to $4.20 following the announcement but closed unchanged at $4.04.

FMA uses special powers to remove Dunedin based fund manager

In a first for the Financial Markets Authority, the regulator has used special powers to appoint a temporary manager to Dunedin based Fund Managers Otago after supervisor Trustees Executors said the fund had been unable to address issues related to governance, compliance, solvency and regulatory breaches.

KPMG Restructuring Services has been appointed as a temporary manager of the fund.

The 600 or so investors in the NZ Mortgage Income Trust (No 2) Fund have had their funds frozen as a result and will no longer be able to redeem units in order to ensure everyone is treated fairly, Trustees Executors said.

The fund’s investments were largely cash deposits with banks and loans with first-ranking security over land and buildings, valued at $13.4 million at the end of September.

The KPMG unit will take over the management of two other funds – Capital Mortgage Income Trust and the NZ Mortgage Income Trust Fund – which are already being wound up. At March 31, the capital mortgage fund had $1.1 million of unitholder funds and the mortgage fund of $5.7 million.

Of the three schemes, Capital Mortgage Income Trust and the NZ Mortgage Income Trust are legacy schemes that have been closed for several years and are in the process of being wound up.

Sanford shares remain out of favour

Just a week from the release of its full year results, Sanford shares continue their downward trend closing at a five-year low yesterday of $5.35.

As recently as May, its shares were trading well above $7.00 and started the year above $8.00 but since then the business has been hit hard by the impact of Covid-19 on fish exports.

It’s almost two months since CEO Volker Kuntzsch, stepped down after seven years leading the company. At the time, the company said it would undertake an international search for a replacement CEO and shareholders will be anticipating an update when Sanford announces its full year result on November 11.

Andre Gargiulo is currently acting chief executive.

Profit slumps for Saudi oil giant

Saudi Aramco, one of the world’s largest companies, has reported a 44.6 percent fall in its third quarter net profit compared with the same period last year, reflecting continued damage to oil demand and weaker prices from the global coronavirus pandemic.

Net profit dropped to 44.21 billion riyals (US$11.8 billion) in the September quarter from 79.84 billion riyals in the same quarter last year.

The Saudi kingdom’s state oil company saw lower crude oil prices and volumes sold, as well as weaker refining and chemicals margins, the company said in its release yesterday.

The national producer has maintained its third-quarter dividend of US$18.75 billion, to be paid in the fourth quarter.

Aramco listed 1.5 percent of its shares locally on the Saudi Tadawul exchange last year, which analysts say has reshaped many of the company’s priorities, including that of its commitment to shareholders.

Brent crude was trading at US$39.55 per barrel, having dropped dramatically at the start of this week as several European countries return to lockdowns amid soaring coronavirus cases. The international oil benchmark is down more than 36 percent year-to-date.

Yet another Apple launch event has tech watchers speculating

Is Apple getting set to launch a new Mac with its own silicon chips?

It’s the question on the minds of tech watchers following Apple’s announcement of a third product launch next week.

An invite sent to media was simply titled “One More Thing,” a line Apple often deploys at the end of big events to debut a surprise product.

The invitation did not give any hints about what Apple plans to reveal, though the one product the company has previously teased but hasn’t yet released is the Mac computer.

At its Worldwide Developer Conference in June, Apple announced it would soon start using its own silicon chips in its Mac computer line-up, switching away from the ones previously supplied by Intel that the devices have used for years.

Apple said the first Macs with the new chips would begin rolling out by the end of this year.

The ARM-based chips, which Apple designs in-house and already uses a version of in iPhones and iPads, will likely enable better battery life and more seamless integration across devices, analysts say.

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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