NZ shares fall for third straight session

New Zealand's main share index fell for a third straight session as Meridian Energy and A2 Milk Company's shares dipped.

Thursday, February 11th 2021, 6:52PM

by BusinessDesk

The S&P/NZX 50 Index dropped 68.9 points, or half a percent, to 12,761.13. Within the index, 22 stocks fell, 23 rose and five were unchanged. Turnover was $185.2 million.

It has been a tumultuous summer for the index which pushed up to record highs during the Christmas holidays, only to be pulled back to earth as the country slowly returned to work.

The index has now shed 2.5 percent year-to-date, driven largely by the sharp decline in renewable electricity generators which were overpriced by offshore index fund buying.

Rising bond yields have also contributed to a reassessment of equity prices, with the yield on a 10-year government bond rising as high as 1.5 percent on Tuesday before slipping to 1.33 percent today.

Cinema software developer Vista Group International led the market lower, dropping 5.6 percent to $1.51, as it gave back some of a recent rally.

Meridian Energy fell 4.4 percent to $6.245 as it continued its descent towards a fair value share price. Similarly, Contact Energy fell 1.4 percent to $7.59.

Milk marketing firm A2 Milk declined 1.1 percent to $10.79, despite a research note from Forsyth Barr reiterating an ‘outperform’ rating and giving a target price of $15.50.

A survey of 101 consumers found the company's brand was still popular with Chinese consumers, suggesting there was plenty of opportunity for its earnings to recover.

However, the analysts noted that “the path forward is unlikely to be smooth and it will take time to rebuild market confidence”.

Air New Zealand fell 1.6 percent to $1.58 while its chief executive was at Parliament apologising to MPs for allowing its gas turbines unit to do work for the Saudi Arabian navy which has been blockading Yemeni ports.

Clothing and outdoor retailer Kathmandu fell 1.5 percent to $1.32, after new data showed spending may be beginning to slow.

Electronic card spending slowed over the summer months, with core spending down 0.7 percent from the prior month. Card spending lifted strongly post August lockdown, but has been on a slight downward trend over recent months.

Outside of the top 50 index, other retailers also saw their share prices decline.

Hallenstein Glasson Holdings dropped 1.4 percent to $7.65 and Briscoe Group dipped 0.2 percent to $5.69, although the Warehouse climbed 0.3 percent to $3.27.

Shares in dual-listed AMP tanked 10.3 percent to $1.48 after a weak earnings report. The firm's New Zealand business said operating earnings fell 19 percent to $38 million in the 2020 calendar year.

Fishing firm Sanford had the day’s biggest gain, jumping 4.1 percent to $4.84 as it bounced back from a sell off after it said Chinese customs had blocked exports from one of its processing plants.

It was an unremarkable trading session in currency markets, with the New Zealand dollar underperforming its peers.

The kiwi dollar was trading at 72.20 US cents at 5pm in Wellington, down from 72.35 cents yesterday.

The trade-weighted index was at 74.72 at 5pm, from 74.80 yesterday. The kiwi traded at 93.34 Australian cents from 93.45 cents, 75.51 yen from 75.63 yen, 59.55 euro cents from 59.66 cents, 52.14 British pence from 52.33 pence, and 4.6599 Chinese yuan from 4.6576 yuan.

Tags: Market Close