NZ shares snap 7-day rally
New Zealand shares snapped a seven-day rally, which saw the benchmark index up 2%, as two heavyweight stocks dragged the market lower.
Wednesday, September 8th 2021, 6:59PM
by BusinessDesk
The S&P/NZX 50 Index fell 131 points, or 1%, to 13,193.01. Turnover was $197 million.
Without much rhyme or reason, global equity markets were weaker overnight, prompting NZ investors to hit pause on a remarkable rally that pushed the NZX 50 up 4.8% in August.
Harbour Asset Management said in a note that the delta variant had failed to dampen equity markets.
“This result was mainly driven by a much stronger earnings season than consensus market expectations, with the number of profit result beats against expectation higher than misses in the order of two to one at an earnings per share level,” it said in a note.
The fund manager also said the NZ market may have attracted offshore capital, due to its high weighting of growth and defensive stocks, as “global growth expectations were trimmed”.
Today, it was the NZX’s problem-child A2 Milk leading the index lower with a 3% decline to $5.75 – its lowest price since May.
The company’s key supplier, Synlait Milk, today announced it is looking to cut 15% of its staff to save more than $10m per year.
The dairy processor expects to lose between $20m and $30m in the year ended July, due to lower prices for its products and A2 Milk’s dramatic drop in sales due to travel restrictions.
Synlait shares fared better than A2’s did, falling just 0.3% to $3.16 as investors welcomed the cost-cutting.
Peter McIntrye, an advisor at Craigs Investment Partners, told BusinessDesk the savings would be a significant percentage of the forecast loss and would add up over the next decade.
Fisher & Paykel Healthcare was the other big drag on the index today, falling 2.6% to $33.
This week saw the first decline in global weekly covid case numbers in 11 weeks. The healthcare manufacturer’s revenue closely tracks hospitalisation rates.
Harbour’s research note said some parts of the global economy with high vaccination rates “may be past ‘peak’ delta fears” but other regions are still at risk with implications for global trade disruption.
Shares in Pacific Edge fell from a record high – dropping back 2.7% to $1.45 – after the company was forced to deny it was raising capital after a notice on the ASX said it was.
The ‘upcoming listings’ section of the Australian stock exchange said Bell Potter, Jarden and Forsyth Barr were helping the cancer diagnostics firm raise A$70m at A$1.20 per share.
Pacific Edge shares were put into a trading halt while the company put out an update saying no capital raise had been approved by the board.
The share price fell when the trading halt was lifted, with some investors wondering if a hefty capital raise might still be under consideration.
MHM Automation shares rose 1.6% to 64 cents as the company announced it had decided to pay a special dividend of 1.5 cents per share.
Vector had the day’s biggest gain, up 2.1% at $4.22.
| « NZ shares rise as nationwide lockdown ends | Profit taking pulls NZ shares down » |
Special Offers
Comments from our readers
No comments yet
Sign In to add your comment
|
|
Printable version |
|
Email to a friend |
