NZ shares narrowly miss regional rally

New Zealand shares fell despite a rally in the Asian markets today. SkyCity Entertainment Group led the market lower, as investors continue to assess the economic impact of the coronavirus outbreak.

Wednesday, January 29th 2020, 7:27PM

by BusinessDesk

By Dan Brunskill

Jan. 29 (BusinessDesk) -

The NZX 50 fell 8.6 points, or 0.1 percent, to 11,676.51. Within the index, 19 stocks rose, 24 fell and 7 were unchanged. Turnover was $178.9 million.

Indices in Japan, Singapore and Australia all rallied today, with mainland Chinese markets in Shanghai and Shenzhen delaying their opening until Feb .3, in line with an extended Lunar New Year public holiday.

The only other regional market to fall was Hong Kong, where the Hang Seng index made its worst opening since 2016 on the first trading day of the year as traders sold risk-sensitive assets after a two-day pause during a worsening coronavirus outbreak.

“Globally, markets are having a bit of a relief move. Asian markets are still pretty weak, reopening after their holidays, but we did see a strong rebound in the US market overnight,” said Chris Smith, general manager of CMC Markets New Zealand.

World Health Organisation director-general Tedros Adhanom Ghebreyesus met with President Xi Jinping and said he's confident in China’s ability to control and contain the spread of a new coronavirus, which may have been enough to prompt a recovery in some assets.

Stocks that have been under pressure from the outbreak of the new respiratory disease regained some ground today. Tourism Holdings rose 1.8 percent to $2.85 on a volume of 1.4 million shares, Auckland International Airport rose 0.8 percent to $8.62 on a volume of 1.4 million shares, and A2 Milk rose 0.9 percent to $15.61 on a volume of 757,000 shares.

SkyCity fell 2.8 percent to $3.79 on a volume of 1.4 million shares and Air New Zealand fell 1.9 percent to $2.81.

Infratil posted the day's biggest gain, up 3 percent to $5.54 on a volume of 962,000 shares.

Infratil’s investment partner Commonwealth Superannuation Corp announced yesterday that it had sold half its 48.2 percent interest in their joint asset, CDC Data Centers. Infratil has retained its 48.2 percent valued between $1.3 million to $1.7 million. Infratil advised that no change was required to that valuation range as a result of the sale.

Other utility stocks were weaker. Meridian Energy fell 1.5 percent to $5.23 on 1.8 million shares, Trustpower fell 1.1 percent to $7.40 on a volume of 48,000 shares, and Mercury NZ fell 0.2 percent to $5.20 on a volume of 828,000 shares.

Contact Energy rose 0.3 percent to $7.42 on a volume of 596,000 share and Genesis Energy held at $3.20.

Oceania Healthcare halted trading at $1.25 after cornerstone shareholder Macquarie Group announced it may sell up to all of its 40.94 percent stake in the residential aged care and retirement village services.

Other retirement stocks were weaker today. Ryman Healthcare fell 1.3 percent to $16.20 on a volume of 302,000 shares, Summerset Group Holdings fell 0.9 percent to $8.85 on 636,00 shares, and Metlifecare fell 0.2 percent to $6.87 on a volume of 5.8 million shares. Arvida Group held at $1.84.

The government provided detail on the well-flagged transport component of its $12 billion of extra infrastructure spending today, outlining $6.8 billion of new spending on a mix of road and rail projects.

Fletcher Building rose 0.9 percent to $5.60 on a volume of 1.6 million shares. Mainfreight rose 1.2 percent to $41.51 on 48,000 shares. Port of Tauranga rose 0.5 percent to $7.65 on a volume of 159,000 shares.

“Certainly, for Port of Tauranga any infrastructure announcement is going to benefit the local freight companies,” Smith said.

“Fletchers has actually had a nice run the last few weeks, seen a little bit more support although it is still languishing. It has been out favour with most investors and are finally seeing a little bit of a lift.”

Outside the NZX50, Abano Healthcare rose 0.2 percent to $5.19 on 23,000 shares. The company reported a first-half net profit of just $115,500 from $6 million a year earlier, due to write-downs on the value of its Australian dental business and costs of dealing with a takeover offer.

Augusta Capital rose 18.3 percent to $1.975 following the announcement of a $180 million takeover bid from Sydney-based Centuria Capital Group.

Smith said some investors may have been selling other property stocks to buy Augusta ahead of the takeover. Goodman Property Trust fell 0.7 percent to $2.305 on a volume of 1.1 million shares, Argosy Property fell 1 percent to $1.425 on a volume of 519,000 shares. Precinct Properties New Zealand edged up 0.3 percent to $1.885 on a volume of 1.1 million shares.

Looking ahead, Smith said earnings announcements tomorrow from big US tech firms might take some attention away from coronavirus and provide the local market with a positive lead.

“Big name tech earnings are probably going to grab news headlines. But look out for any mention of coronavirus in the company’s outlooks. Starbucks and Apple both mentioned it today,” he said.

“New Zealand takes a lead from Wall Street, so if we see green overnight it lifts confidence.”

Tags: Market Close