NZX50 falls 2.8% this week as inflation rears its head

The benchmark S&P/NZX 50 Index fell 2.8% this week as investors fretted over whether inflation pressures in the US will drive up interest rates, while the announcement of the new KiwiSaver default providers attracted local attention.

Friday, May 14th 2021, 6:02PM

by BusinessDesk

The NZX 50 declined 60.26 points, or 0.5%, to 12,367.86 today. Of the 186 listed stocks on the main board, 61 fell and 69 rose, with market turnover $124.2 million.

The local market was one of the worst performers across Asia today as US inflation indicators raise the prospect of higher interest rates.

Trading was relatively muted with just 10 companies trading on volumes of more than a million shares, with the announcement of the new default KiwiSaver providers signalling a shift in several billion dollars of funds under management in the coming months.

NZX’s Smartshares was among the winning bidders, although the stock market operator fell 2.5% to $1.99. Low-cost provider Simplicity also won a mandate.

Matt Goodson, a managing director at Salt Funds Management, said he expects about $4 billion to $5b of funds under management to move around when the new contracts start.

“There was clearly a very strong focus on low fees,” he said.

ANZ Bank, the country’s largest KiwiSaver provider, missed out on retaining its mandate. Its dual-listed parent rose 0.8% to $29.63, AMP also lost its contract and was unchanged at $1.16.

Westpac Bank posted the day’s biggest gain on the benchmark index, up 1.7% at $27.55. The big four banks rallied in Australia, with Commonwealth Bank of Australia hitting a record A$97.38 on the ASX.

Vista Group International led the benchmark index lower for a second day, falling 4.6% to $2.10.

Synlait Milk dropped 2.6% to $3.03 after announcing the exit of its chief financial officer. A2 Milk, which has been on the backfoot after cutting its earnings guidance, rose 1.2% to 6.03, and Fonterra Shareholders’ Fund units were down 2.4% at $4.01. Fonterra’s farmer-owned shares dropped 4% to $3.85.

Auckland International Airport declined 0.7% to $7.37. Goodson said there is some concern passenger load factors are pretty low, which is weighing on the airport operator.

Tourism Holdings declined 1.2% to $2.47 and Serko dropped 2.2% to $6.25.

A weaker kiwi dollar wasn’t enough to support exporters, with Fisher & Paykel Healthcare down 1.9% at $32.90 and Scales Corp declining 2.2% to $4.39.

The kiwi dollar was unchanged at 71.77 US cents at 3pm in Wellington from yesterday, having declined 0.9% this week. The trade-weighted index was at 74.86 from 74.82 on Thursday and 75.44 a week earlier.

The local currency traded at 92.92 Australian cents from 92.72 cents yesterday, 51.10 British pence from 51 pence, 78.67 yen from 78.60 yen, 59.40 euro cents from 59.39 cents, and 4.6270 Chinese yuan from 4.6300 yuan.

The Warehouse rose 3.2% to $3.55 after the retailer said it expects annual profit to double when reporting a 35% lift in third-quarter sales.

Tags: Market Close