Shares rise as tough quarter ends

New Zealand's sharemarket was led up by Mercury NZ as investors begin to adjust to the higher bond yields which have been dominating the market this year.

Wednesday, March 31st 2021, 7:26PM

by BusinessDesk

The S&P/NZX 50 Index rose 113.9 points, or 0.9% , to 12,560.7. Within the index, 36 stocks rose, 11 fell, and three were unchanged.

Turnover was $320 million, higher than usual due to fund managers rebalancing their portfolios at the end of the first quarter.

Greg Smith, head of research at Fat Prophets, said the market was having a “risk-on day” as investors became desensitised to higher interest rates.

“We’re rounding off the quarter on a positive note after what hasn’t been a great quarter for equities,” he said.

The yield on a 10-year government bond was sitting at 1.8% today, double what it had been at the start of the quarter.

Electricity utility Mercury NZ led the market higher, jumping 4.8% to $6.50, but failed to recover fully to its $6.75 starting point.

Utilities’ stock prices were run-up over the summer only to be brought back down by the higher interest rates.

Pushpay Holdings also moved higher in the quarterly rebalance, advancing 4% to $2.08. NZX saw the same percentage gain, rising to $2.1.

A total of twelve stocks rose more than 2% on the top 50 index, helping to trim its loss for the quarter to just 4.2%.

NZX’s exchange-traded funds business, Smartshares processed high volumes of units on Monday ahead of the end of quarter rebalancing.

The passive fund manager cashed out nearly $40m worth of units in US-based ETFs and added a similar value of units in global-based ETFs.

Equity markets in the United States have been outperforming other regions.

Across all of its funds, it added 16 million units on Monday alone, worth approximately $50m. NZX funds saw only minor changes.

Evolve Education Group was placed in a trading halt as it launched an unexpected capital raise.

The early childhood business did not provide any details about the raise to the NZX, but Australian media reported it was $21.7m at $1.10 per share.

Shares in beauty brand Me Today jumped 6.4% to 83 cents after it revealed new distribution partners and reaffirmed its September guidance with annual gross revenue of at least $1.4m.

New Zealand King Salmon said it made a $7.1m net loss in the seven months ended Jan 31 because it was carrying excess inventory due to the covid-19 pandemic. Its shares fell 1.3% to $1.50.

Heartland Group Holdings saw the day’s biggest decline, falling 2.2% to $1.75, while dairy processor Synlait was the worst-performing stock this quarter having fallen almost 35%.

The kiwi dollar was trading 69.80 US cents at 5pm in Wellington, down from 70.23

cents yesterday.

The trade-weighted index was at 73.63 at 5pm, from 73.90 yesterday. The kiwi was trading at 91.81 Australian cents from 91.79, 77.37 yen from 77.26 yen, 59.62 euro cents from 59.70 cents, 50.84 British pence from 50.99 pence, and 4.5786 Chinese yuan from 4.6135 yuan.

Tags: Market Close