As a whole companies released better than expected financial results in the second half of April, which led to a rebound in global share markets. Performance of the Growth and Focused Growth funds were further assisted by a decline in the New Zealand dollar, as it increased the value of their offshore holdings.
In April, the best performing International Equity Manager or large-cap international stock was Facebook, which was up an impressive 10.9% after reporting stronger than expected results. This reversed the significant losses generated in March after the Cambridge Analytica data scandal hit the headlines. The strong bounce back in the company’s share price is in part a reflection of stronger than expected growth, with revenue up 50% (which exceeded market expectations) and also due to reassuringforward looking commentary from management.
The lowest returning International Equity Manager or large-cap international stock was Tencent, which was down 2.2% in April. The news out over the month was largely positive (for instance, Tencent is planning on listing its Music division separately). We attribute the modest share price fall to negative sentiment following Naspers US$10 billion sale of Tencent shares, which reduced their holding by 2% to 31% and also a broadly weaker Chinese share market. Tencent reports its first quarter results in mid-May, which should refocus investors on its strong position and excellent growth prospects.
The top-performing Australasian stock for the funds in April was Z Energy, which was up 3.6% over the month. In our view, the key piece of news released during the month, volume data, was not entirely positive. More specifically, volume data for the first quarter of 2018 showed the industry had enjoyed good growth, but Z Energy had lost some market share. It seems that some investors have set aside their electric vehicle concerns for the time being and refocused on the significant growth in dividends this company is expected to generate over the medium term.
Metlifecare was the worst performing Property and Infrastructure stock in April declining 1.2%. The most likely explanation is that weak nationwide housing sales volumes data for March (which was released mid-April) led to some selling in the name. We note that Easter was at the end of March and so while a 9.9% volume decline is not a great headline, this needs to be put in context.
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