Shares bounce after five-day rout

New Zealand's main share index bounced after a five-day slide as global equity markets continued to run further into record territory.

Tuesday, February 16th 2021, 6:08PM

by BusinessDesk

The S&P/NZX 50 Index rose 100.2 points, or 0.8 percent, to 12,610.72. Within the index, 25 stocks rose, 16 fell and nine were unchanged. Turnover was $195.9 million.

While other share markets have kept climbing in recent times, NZ’s has not. The index has fallen almost 4 percent this year, even after today’s bounce.

Craig Brown, a portfolio manager at ANZ, said prices across the market may be settling after investors bought into Contact’s $325 million institutional placement today.

“There is probably a bit of funding required to some of that, maybe some selling of stocks in the market. Meridian and Mercury were both down a bit yesterday,” he said.

Today, both stocks were propelling the rally. Mercury NZ jumped 3.1 percent to $6.63, and Meridian Energy rose 2.8 percent to $5.83.

Contact Energy fell 2.1 percent, but remained 5 cents above its capital raise price at $7.05.

Brown said trading above the equity issue price was generally a sign a capital raise had been well supported.

Ryman Healthcare led the market higher, climbing 4.2 percent to $15.42, although on light volume.

The strong housing market data released today would’ve been encouraging news for investors in the retirement village operator, Brown said.

Some stocks which were sold down amid the renewed Auckland lockdown also recovered. There were no new covid cases today and Cabinet will make a decision about extending the three day lockdown tomorrow.

Auckland International Airport and Kathmandu Holdings each rose 3.1 percent to $7 and $1.34, respectively. Air New Zealand was up 2.6 percent at $1.60.

Investore Property climbed half a percent to $2.24 after announcing a third quarter dividend of 1.9 cents and confirming guidance of a full year dividend of 7.6 cents “assuming no further deterioration in economic conditions due to covid-19”.

That assumption has not panned out for other property related stocks.

Millennium & Copthorne Hotels was forced to give an update ahead of its full year earnings report tomorrow after the Auckland lockdown threw doubt on its first-half 2021 guidance.

‘All of our owned and operated hotels have received multiple cancellations for bookings over this week and the following weeks in February,” the company said in a statement.

The hotelier said it was not able to forecast the exact impact on financial performance, but investors were not fazed, its share price rose half a percent to $2.17.

Infrastructure investment firm Infratil held a virtual investor day in which management reiterated its view that both takeover bids and the market undervalued its portfolio.

Infratil shares rose half a percent to $7.52, however Tilt Renewables - in which Infratil has its 65 percent stake for sale - fell 1.1 percent to $6.33.

The New Zealand dollar held well above 72 cents in an uneventful trading session in currency markets. The kiwi was trading at 72.61 US cents at 5pm in Wellington, up from 72.40 cents yesterday.

The trade-weighted index was at 74.97 at 5pm, from 74.79 yesterday. The kiwi traded at 93.04 Australian cents from 93.01 cents, 76.66 yen from 76.05 yen, 59.78 euro cents from 59.65 cents, 52.05 British pence from 52.08 pence, and 4.6864 Chinese yuan from 4.6728 yuan.

Tags: Market Close