NZ shares bounce after dire February

New Zealand investors started the week on a generally positive note as earnings season wound to a close and Vista Group International reported a strong cash position despite the pandemic.

Monday, March 1st 2021, 6:42PM

by BusinessDesk

The S&P/NZX 50 Index rose 74.52 points, or 0.6%, to 12,301.81. Within the index, 28 stocks rose, 17 fell and five were unchanged. Turnover was $133.5 million.

Investors are hoping for better returns in the month of March after the benchmark index dropped 7% last month.

“February ended on a volatile note, with global share markets falling across the board last week as investors were spooked by sharp rises in bond yields,” said Mark Lister, head of private wealth research at Craigs Investment Partners.

The equity market had a small bounce back today as interest rates walked back from record highs over the weekend, although remain much higher than at the start of the year.

Stock market operator NZX led the market higher, climbing 3.6% to $2, although cinema software operator Vista Group International was the main news of the day.

The firm was last week's best performer, rallying 13% in the run-up to today’s earnings result with it reporting a $56.7 million net loss.

While this looks like a dour result, the stock price climbed another 2.4% to $1.74 as investors focused on the $67m cash on hand and another $39m of used debt facility.

This gives the firm a lot of room to wait out the pandemic and for its customers to be able to reopen their cinemas. Until then, Vista is keeping its cash burn rate low, averaging $3.7m per month.

"Regardless of when and where the recovery comes in 2021, Vista is positioned better than ever to help our customers back onto their feet and our moviegoers back into their seats," said chief executive Kimbal Riley.

Fisher & Paykel Healthcare saw a bounce after being sold down 11% last week. The healthcare manufacturer recovered 1.6% to $29.71 today.

Other large stocks continued trends from February: A2 Milk fell 2% to $9.50 today, adding to a 13% decline last week, and Auckland Airport climbed another 0.4% to $7.58 after an 11% gain.

Synlait tracked is key customer, A2 Milk, lower as it fell 3% to $3.90 — the day’s biggest decline.

NZ Automotive Investments listed just last week but has already run into a headwind with the seven-day Auckland lockdown impacting profit forecasts.

The car dealer and financier said it expects net profit to be between $3.3 million and $3.7m, assuming current covid restrictions last for less than 14 days. The stock went untraded today, holding at $1.30.

Some other lockdown sensitive stocks saw small declines: Z Energy slipped 0.4% to $2.72 and Tourism Holdings dropped 1.8% to $2.21, but Air New Zealand rose 0.3% to $1.5950.

The kiwi dollar was trading 72.70 US cents at 5pm in Wellington, down from 73.64 cents on Friday.

The trade-weighted index was at 75.43 at 5pm, from 76.12 Friday. The kiwi traded at 93.83 Australian cents from 93.69 cents, 77.37 yen from 78.72 yen, 60.15 euro cents from 60.56 cents, 51.99 British pence from 52.66 pence, and 4.69.52 Chinese yuan from 4.7633 yuan.

Tags: Market Close