NZ shares snap six-day decline
Many New Zealand shares bounced back from a six-day slump as investors began to see bargains in the depressed prices with the benchmark equity index down more than 7% this year.
Friday, February 26th 2021, 6:05PM
by BusinessDesk
The S&P/NZX 50 Index rose 86.63 points, or 0.7%, to 12,227.29. Within the index, 25 stocks fell, 24 rose and one was unchanged. Turnover was $383 million.
A raft of positive results from listed companies, in the past two weeks, have been overshadowed by rising interest rates which caused the share market to fall significantly.
“It has been a reasonably healthy reporting season, which is not reflected at all with how the market as performed this month,” said Mark Lister, head of private wealth research at Craigs Investment Partners.
The 10-year swap rate hit 2% during the day, before easing back to 1.975%. The share market finished the day higher as some stocks bounced from sustained selling.
Lister said some share prices had fallen so far investors were beginning to see buying opportunities, with some stocks down 15-to-20% this month.
“It’s not a bad thing that interest rates are going up,” Lister said. “They are going up because the world is not ending like we thought it was last year.”
A2 Milk Company was up 3.8% as it recovered a little from a 16% drop yesterday.
Lister said the “jury is still out” on the milk marketing firm which has now downgraded its earnings forecast three times.
“It wasn’t a comforting result and there do appear to be some longer-term challenges for the business,” he said.
Shares in Port of Tauranga jumped 3.4% to $7.62 on its improved profits despite volatile cargo volumes and congestion issues at Port of Auckland.
Lister said getting net profit up 2.3% to $49.4m was an impressive result.
Tourism Holdings today said it had taken control of its motorhome supply chain, buying out its partner for $9m to have an end-to-end RV business across Australia and New Zealand.
The RV rental operator reported revenue of $205.8m in the six months ended Dec 31, compared to $207.5m a year earlier due to a sell-off of its vehicle fleet. Shares in the company rose 2.7% to $2.25.
Scales dropped 2.1% to $4.60 after it predicted weaker earnings. Chair Tim Goodacre said the start of 2021 “has not been without its own challenges" and the company lowered its guidance range.
Steel & Tube Holdings beat its own half-year guidance significantly and said its "cautiously optimistic view" of the future supports the resumption of dividends — but its shares fell 5.7% to 99 cents.
Fisher & Paykel saw a bounce back, climbing 1.7% to $29.25, while Spark New Zealand tumbled 2.6% to $4.59.
The New Zealand dollar was weaker today, dropping to 73.64 US cents at 5pm in Wellington from 74.29 cents yesterday.
Reserve Bank of New Zealand Governor Adrian Orr told the Canterbury Employers’ Chamber of Commerce this afternoon that the bank was still prepared to cut interest rates and go negative if needed.
This seemed to cause the currency to waver and may have encouraged equity investors to look past the climbing interest rates.
The trade-weighted index was at 76.12 at 5pm, from 76.37 yesterday. The kiwi traded at 93.69 Australian cents from 93.28 cents, 78.11 yen from 78.72 yen, 60.56 euro cents from 61.04 cents, 52.66 British pence from 52.51 pence, and 4.7633 Chinese yuan from 4.7932 yuan.
« a2 sends NZX 50 to 4-month low | NZ shares bounce after dire February » |
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