Stocks hit record lows as market suffers

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New Zealand shares fell, with several companies hitting record lows, as investors grappled with the uncertainty of how long and deep the economic downturn will be as the pandemic continues to rattle financial markets.

Thursday, March 19th 2020, 6:48PM 2 Comments

by BusinessDesk

The S&P/NZX Index dropped 340.36 points, or 3.6 percent, to 9,114.5. Within the index, 45 stocks fell, three rose and two were unchanged. Turnover was $275.2 million.

Markets remain in upheaval as the covid-19 outbreak worsens. Investors today returned to sell-mode as concerns set in that the stimulus package would not be enough to offset a significant recession.

Stuart Williams, head of equities at Nikko Asset Management, said the market was experiencing "logical volatility" rather than "panic selling" as investors worked through the uncertainty of the global recession.

“The world is in a pretty tricky spot, and investors are grappling with a lot of things,” he said. “The market is operating in the normal way, it’s just the prices are down,” he said.

Global stock markets fell. Overnight the S&P 500 in New York fell 5.2 percent and London's FTSE 100 Index dropped 4.1 percent. Across Asia, markets also were also weaker. Hong Kong’s Hang Seng was off 4.9 percent, Shanghai’s SSCE down 2.1 and Australia’s S&P/ASX 200 was down 3.2 percent.

That volatility seeped into currency markets as investors flocked to the greenback. The kiwi dollar sank more than 5 US cts over the past day, trading at 55.36 US cents at 5pm in Wellington.

Tourism Holdings led the local market lower, shedding 31.1 percent to a six-year low of 91 cents. The stock is down 72.2 percent this year. 

Kathmandu Holdings fell 26.7 percent to an all-time low of $1.10 and is down 67.1 percent over the past three months. The retailer this week said the majority of its European stores were forced to close and that traffic in Australasian stores had also declined due to the outbreak.

A number of other stocks also fell to record lows today. SkyCity Entertainment Group fell 20.1 percent to $1.59, the lowest in two decades, and Gentrack sank 16.7 percent, slipping below a dollar for the first time, to close at 95 cents.

Z Energy fell 11.7 percent to $3.01 with 1.5 million shares traded.

Williams said Z Energy's sell-off was “perplexing”, although he noted fuel consumption does fall during a recession.

“If you look across however deep this valley that we are in is, then that is a great company with an enduring proposition that presents good value,” he said.

Aged-care stocks continued to fall.

Summerset Holdings dropped 11.4 percent to $4.43, Oceania Healthcare declined 8.3 percent to 55 cents and is off 56.8 percent this year, Metlifecare decreased 6.7 percent to $5.15, and Arvida Group fell 5.3 percent to $1.08.

Spark New Zealand fell 5.6 percent to $3.91 with 4.2 million shares traded. Williams said the telco had a strong business model and was "arguably a beneficiary of more people working remotely.

“There are a lot of great listed business that appear to be on sale right now,” he said.

Property firms declined across the board. Argosy Property fell 11.6 percent to 95 cents, Kiwi Property Group fell 10.9 percent to 98 cents and Property for Industry fell 10.6 percent to $1.85. Vital Healthcare Property Trust dropped 7 percent to $2.045

Fisher & Paykel Healthcare rose 7 percent to $27.45, the biggest gain on the day.

Fonterra Shareholders’ Fund units rose 4.2 percent to $3.94 and Vista Group International rose 5 percent to $1.25.

Synlait Milk fell 4.8 percent to $4.40 after it reported a 30 percent decline in first half profit, but retained its annual earnings guidance.

Tags: Market Close

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