NZ shares rise as investors bet on earnings results

New Zealand shares edged higher as investors bid up stocks set to report earnings in the next few days with Serko leading the market higher.

Tuesday, May 18th 2021, 6:06PM

by BusinessDesk

The S&P/NZX 50 Index rose 18.15 points, or 0.2%, to 12,428.62. Within the index, 17 stocks fell, 27 rose and six were unchanged.

Travel booking software developer Serko jumped 4.9% to $6.70 ahead of its full-year earnings report on Wednesday morning.

The stock has weathered the pandemic well and reported in March that transaction volumes had recovered to 68% of pre-covid levels. The company had prepared for scenarios anywhere between 30% and 70%.

That good news came before the free travel bubble with Australia opened in April, so investors may be expecting further good news from the company in its earnings report.

Argosy Property, which is also reporting earnings tomorrow, climbed 4.7% to $1.55. Oceania Healthcare will release its earnings on Friday, and it rose 3.8% to $1.37. Both stocks are linked to the booming housing market.

Trustpower climbed 1.3% to $8.45 after it released earnings guidance despite neglecting to do so when it reported its full-year result on Monday.

Its majority owner, Infratil is reporting earnings tomorrow and required its subsidiary to also give guidance. The electricity generator and retailer said earnings will be at or above the level achieved in the past 12 months – if it does not sell its retail arm.

Infratil itself rose 0.7% to $7.30 as investors looked forward to its full-year report tomorrow.

But it wasn’t all good news on the market. A2 Milk Company is yet to find a bottom as it dropped another 20 cents today already having more than halved in value this year alone.

Earnings forecast consensus among analysts who follow the milk marketing stock has plummeted significantly as they reacted to last weeks downgrade, the fourth in an embarrassing series.

Valuations vary widely from as low as $4.90 per share to as much as $13.50. Actual investors seem to be trending towards the low end of this range, with the stock sliding another 3.5% to $5.56 today.

Jarden cut 23% off its target price, bringing it to $6.10, last week. The analysts were unconvinced by signals the infant formula company may support the stock with a share buyback.

“We think an important precursor will be stabilising the daigou channel over the fourth quarter first,” they said in a note.

Synlait Milk also dropped 2.3% to $2.93, now down 43% year-to-date, and Fonterra Shareholders’ Fund units declined 1% to $3.85.

The kiwi dollar was trading 72.36 US cents at 3pm in Wellington, down from 72.24 cents yesterday.

The trade-weighted index was at 75.24 at 3pm, from 75.26 yesterday. The kiwi traded at 92.92 Australian cents from 93.16 cents, 79.00 yen from 78.98 yen, 59.48 euro cents from 59.54 cents, 51.07 British pence from 51.29 pence, and 4.6555 Chinese yuan from 4.6546 yuan.

Tags: Market Close