Records tumble as NZX50 cracks 13,000

Blue-chip companies including Ebos Group, Mainfreight and Infratil hit all-time highs today in the last full trading day before Christmas.

Wednesday, December 23rd 2020, 7:31PM

by BusinessDesk

The S&P/NZX 50 Index advanced 177.52 points, or 1.4 percent, to 13,020.21. Within the index, 28 stock rose, 17 fell, and five were unchanged. Turnover was $140.8 million, with trading rooms thinning out as the summer holidays approach.

Grant Williamson, a director at Hamilton Hindin Greene, said the NZX typically enjoys a strong end to the year, with many institutional investors on holiday and retail investors more active.

The local stock market again outperformed the rest of Asia, with investors continuing to fret over the new covid-19 strain, the last-minute talks to cut a Brexit deal, and whether US President Donald Trump will sign off a new pandemic stimulus bill.

“Taking stock of the most recent developments around US stimulus, Brexit, and the super spreader covid variant, we are still in a chaotic environment for risk in the coming days and right up until the final year-end bell,” Axi chief global market strategist Stephen Innes said in a note.

The kiwi dollar remained under pressure after its recent weakness, trading at 70.49 US cents at 5pm from 70.62 cents yesterday, while the trade-weighted index was at 73.66 from 73.71.

The local currency traded at 72.94 yen from 73.02 yen yesterday, 93.30 Australian cents from 93.36 cents, 57.82 euro cents from 57.75 cents, 52.59 British pence from 52.66 pence, and 4.6184 Chinese yuan from 4.6248 yuan.

Exporters

The weaker currency has been a boon for exporters, by increasing the value of their revenue in foreign currency. Among those, A2 Milk has bounced back from last week’s walloping when it downgraded revenue guidance and shed a fifth of its value in one day. The stock was up 3.5 percent at $11.89 today.

“There’s been a little bit of recovery for A2 after last week’s shocker,” said Williamson.

Ebos Group, which is heavily exposed to Australia, hit a record $29.27, ending the day at $28.35, up 1.2 percent. Global logistics group Mainfreight also hit a record - $65.54 – closing the day up 2.8 percent at $65.

“It was quite surprising to see a number of stocks here today reach record levels,” Williamson said.

That wasn’t just limited to the export sector, with energy companies also on the move. Williamson said the news Rio Tinto and the government are still negotiating a deal to close the Tiwai Point aluminium smelter over a longer period provided some comfort to investors.

Meridian Energy – which may face a clawback on wholesale power that was sold last December – rose 7.5 percent to a record $7.20, leading the market higher. Contact Energy rose 5.8 percent to $8.78 and Mercury NZ was up 1.3 percent at $6.43. Genesis Energy increased 1 percent to $3.56.

Infratil

Infratil rose 3.2 percent to a record $7.54, more than the $7.43 cash-and-share offer put to it by AustralianSuper. The indicative bid included an in-specie distribution of Infratil’s controlling stake in Trustpower when the price was $7.42. Trustpower slipped 1.3 percent to $7.80 today.

Skellerup advanced 0.9 percent to $3.49, also a record-breaker.

It wasn’t all one-way traffic, Tourism Holdings fell as much as 7.9 percent when it warned analysts they weren’t pessimistic enough in their outlooks for the coming year. The stock ended the day down 0.8 percent at $2.52.

Pacific Edge posted the day’s biggest decline, falling 3.3 percent to $1.19. Still, the company has been on a tear since securing two long fought for deals in the US, and is up 875 percent so far this year.

Outside the benchmark index, Cavalier Corp rose 14.5 percent to 39.5 cents, after the carpet maker upgraded its earnings guidance on the strength of recent trading.

Williamson said given its track record of downgrades in recent years, it was good to see the company benefiting from the increased spending on home renovations.

NZ Rural Land Co rose 1.6 percent to $1.27 in its third day of trading, closing above its $1.25 initial public offering price.

Tags: Market Close