SNAP: Five day rally ends

New Zealand's main share index snapped a five-day rally and fell with the kiwi dollar and bond yields, as investors wait on the US Federal Reserve meeting on Wednesday night.

Wednesday, March 17th 2021, 6:39PM

by BusinessDesk

The S&P/NZX 50 Index fell 66.84 points, or 0.5%, to 12,622.21. Within the index, 24 stocks rose, 21 fell and five were unchanged. Turnover was $240.3 million.

Jason Wong, an interest rate strategist at BNZ, said the Federal Reserve was expected to show the cash rate remaining on hold through to the end of 2023 but investors needed to be reassured.

“Given the improvement in growth and inflation expectations since December, in part due to the passing of Biden’s massive $1.9tn fiscal stimulus, the risks are clearly skewed towards the forecast timing of that first hike being brought forward,” he said.

Fishery firm Sanford led the market lower after confirming it was still facing disruption to global foodservice markets due to the pandemic. Its shares fell 7.6% to $4.50.

The company said financial outcomes were similar to those seen in the second half of the prior financial year. Sanford will report its interim results in the second half of May 2021.

Electricity generators were weaker: Contact Energy declined 4.5% to $6.97, Meridian Energy fell 2.8% to $5.73, and Genesis Energy slipped 2.1% to $3.75.

Fuel retailer Z Energy has renegotiated its debt covenant waivers allowing it to resume paying dividends earlier than expected.

The company said it expects to pay a final dividend in May for the year ending this month of 12 cents to 14c per share, prompting the share price to jump 4.6% to $2.92.

Tourism Holdings had the day’s biggest gain, up 5% to $2.50 as rumours swirl of a trans-Tasman bubble opening in early April.

Air New Zealand was unchanged at $1.80, while Auckland International Airport slipped 2.2% to $7.60.

Fonterra Shareholders’ Fund declined 0.2% to $5.08 after the dairy cooperative reported a half-year profit of $391m but warned high commodity prices will put pressure on margins in the second half.

RaboResearch senior dairy analyst Emma Higgins said she was still forecasting $7.80/kgMS, at the upper end of Fonterra’s forecast, even with the decline after the “spectacular” price earlier in March.

Outside of the top 50 stocks, mobile marketer Plexure remained unchanged at 91 cents despite Forsyth Barr initiating coverage of the firm with an ‘outperform’ rating and a $1.58 target price.

“PX1 is exposed to an ongoing thematic shift which has seen global advertising expenditure recycled into mobile and desktop solutions, away from more traditional print channels such as newspaper and magazine,” analysts Jamie Foulkes and Ashton Olds wrote.

The stock was a “compelling buying opportunity” for a patient investor willing to wait out lumpy revenue growth, they said.

The kiwi dollar was trading at 71.82 US cents at 5pm in Wellington, down from 71.96 cents yesterday.

The trade-weighted index was at 75.00 at 5pm, from 75.06 yesterday. The kiwi traded at 92.86 Australian cents from 92.81 cents, 78.36 yen from 78.55 yen, 60.35 euro cents from 60.30 cents, 51.68 British pence from 51.88 pence, and 4.6664 Chinese yuan from 4.6728 yuan.

Tags: Market Close