NZ shares prosper on strong earnings

New Zealand's sharemarket continued to rally with strong earnings results, and less focus on geopolitics, alluring buyers into the market.

Thursday, February 17th 2022, 7:00PM

by BusinessDesk

The S&P/NZX 50 Index rose 135 points, or 1.1%, to 12,256.82. Turnover was $147 million.

Peter McIntyre, an investment advisor at Craigs Investment Partners, said investors were concentrated on earnings season with a possible Russian invasion of Ukraine put to the side.

“We've also seen global bond yields ease overnight and because we’re an interest rate sensitive market, any easing of bond yields is generally positive,” he said.

Greg Smith, head of retail at Devon Funds, said only time will tell if the tension around Ukraine dissipates with NATO allies warning Russia hasn’t visibly drawn down forces.

The minutes from the most recent Federal Reserve meeting were released overnight, Smith said, which reconfirmed it was “deadly serious” about addressing inflation.

Yields eased with market participants viewing the minutes as being less aggressive than Fed chair Jerome Powell was in his press conference after the meeting.

The local stock worst hit in the sell-off that followed, Serko bounced 6.5% to $5.43 up from the one year low it hit yesterday after falling more than 25% in 2021.

Stocks that have reported promising earnings in recent days continued to climb, Ebos Group rose 4.3% to $41.00, Fletcher Building rose 3% to $6.90, and Infratil gained 2.7% at $8.06.

Forsyth Barr analyst Rohan Koreman-Smit said Fletcher had reported a solid first half result and signalled it was on target to achieve a 10% earnings margin in 2023.

Which was “something the market and ourselves had been sceptical about,” he said.

MHM Automation climbed 1.6% to 63 cents after it reported first-half revenue up 19% at $29.5m.

The increased revenue was driven by the Milmeq Chilling and Freezing business, particularly in the Australian red meat sector, which offset a slower period in the reverse packaging business, which was impacted by covid.

The company said a focus on costs and supply chain management helped grow operating earnings to $2.1m, up from $1.5m. Net profit after tax increased 279% to $1.4m.

Shares in Hallenstein Glasson Holdings dropped 4.3% to $6.40 after it warned total sales for the six months ended February were down 6.2%.

Trading in some stores were disrupted by covid restrictions resulting in 5,432 lost trading days, but all stores are currently open and operating again.

Skellerup today announced a record net profit of $23.2 million for the six months ended 31 December 2021 and provided full-year guidance of $44m to $47m. Shares in the exporter rose 1.4% to $6.21.

Chair Liz Coutts said the “outstanding first-half earnings” and expectations allowed the board to declare a 15% increase in the interim dividend to 7.5 cents per share.

Pushpay Holdings had the day’s biggest drop, down 2% to 99 cents – falling below $1 for the first time since the pandemic crash in March 2020.

Tourism Holdings also remained under pressure, falling 1.5% to $2.71.

The NZ dollar was trading at 66.90 US cents at 3pm in Wellington, up from 66.44 cents yesterday, climbing with the more positive risk environment.

Tags: Market Close