Shares flat-line as coronavirus concerns reemerge

New Zealand shares were mixed as defensive stocks such as Spark New Zealand insulated the wider market from a new wave of concerns over the coronavirus outbreak.

Thursday, January 30th 2020, 7:05PM

by BusinessDesk

The S&P/NZX 50 Index decreased 10.86 points, or 0.1 percent, to 11,665.65. Within the index, 24 stocks rose, 21 fell and 5 were unchanged. Turnover was $498.8 million, due to the sell-down of Oceania Healthcare's cornerstone shareholder.

Indices in Japan, Singapore, Hong Kong and Australia all fell. The Hang Seng was down 1.7 percent in afternoon trading and the S&P/ASX 200 Index fell 0.4 percent. The mainland Chinese markets in Shanghai and Shenzhen are closed until Feb. 3.

Matthew Goodson, managing director at Salt Funds Management, said the local market was following broader weakness across Asian markets.

“Coronavirus fears just raising their heads a little again, Asian markets are down between 1.5 and 3 percent which has headed over to Australia to a moderate degree and New Zealand to a lesser degree again,” he said.

Stocks with exposure to China returned to their negative trend.

SkyCity Entertainment Group fell 2.6 percent to $3.69 on a volume of 706,000 shares, A2 Milk Company fell 2 percent to $15.30 on a volume of 1 million shares, Air New Zealand fell 1.8 percent to $2.76 on a volume of 876,000, Auckland International Airport fell 0.8 percent to $8.55 on a volume of 1.8 million shares.

Tourism Holdings bucked the trend, climbing 0.4 percent to $2.86 on a volume of 454,000 shares.

Goodson said investors are still watching the infection rate, which has now exceeded the 2002 SARS outbreak.

“The experience from SARS was that the market bottomed out once the number of new infections peaked, and we are not at that point yet,” he said.

“US futures are a little weak, we’ll have to see if this is a storm in a teacup. If the infections peak it will be, but it may be more lingering.”

Goodson said the NZX50 held up well, compared to its regional counterparts due to demand for defensive stocks such as Spark, which rose 1.7 percent to $4.625 on a volume of 3.5 million shares.

Other defensive stocks also performed, Goodman Property Trust rose 0.9 percent to $2.325 on a volume of 1 million shares, Meridian Energy rose 0.6 percent to $5.26 on a volume of 2.4 million shares, and Contact Energy which rose 0.3 percent to $7.44 on a volume of 1.3 million shares.

Oceania Healthcare drove up trading volume today after cornerstone shareholder Macquarie Group sold its 41 percent stake in the company to a mix of institutional and retail investors. The 251 million shares were sold for $1.20 a share in an underwritten sale, a 4 percent discount to the previous close of $1.25 on the NZX. The shares fell 2.4 percent to $1.22 when trading resumed today as 262 million shares changed hands.

Gentrack Group posted the day's biggest loss, falling 5.1 percent to $2.06 on a volume of 76,000 shares. The utility-software company’s share price has been in trouble after losing two big clients from the UK utilities market.

Infratil lost some of yesterday’s gains, falling 1.6 percent to $5.45 on a volume of 374,000 shares.

Outside the NZX50, Livestock Improvement Corp rose 9.3 percent to 82 cents on a volume of 61,000 shares, after affirming their annual earnings guidance.

Of other stocks trading on volumes of more than a million shares, Metlifecare rose 0.2 percent to $6.88, Precinct Properties New Zealand fell 0.5 percent to $1.875, Fletcher Building which rose 0.9 percent to $5.65, and Fisher & Paykel Healthcare which rose 1.1 percent to $22.60.

Tags: Market Close