Travel stocks jump on hastened border opening

New Zealand shares were generally flat on Monday with travel stocks climbing after the prime minister signalled the border would open to tourists ahead of schedule.

Monday, March 14th 2022, 6:10PM

by BusinessDesk

The S&P/NZX 50 Index fell 22 points, or 0.19%, to 11,805.11. Turnover was $128 million.

Vista Group International led the decline, falling 3.4% to $1.69, followed by Restaurant Brands which dropped 2.8% to $13.85.

Fisher & Paykel Healthcare also weighed down the index, declining almost 1% to $26.88.

The market was a mixed bag of gainers and decliners, but travel stocks performed well on expectations NZ’s border settings would be significantly relaxed this week.

Prime minister Jacinda Ardern said today she would announce changes to NZ’s border rules on Wednesday this week.

Ardern said in an interview the reopening dates set out earlier this year could be “brought forward” as we may be nearing the peak of the omicron outbreak.

This would be good news for listed companies that are waiting for tourists to return to the country and bolster their revenues.

Tourism Industry Aotearoa said it was “heartened” by the possibility of the borders opening sooner and expected to see a timeline “imminently”.

Tourism Holdings jumped 5.3% to $2.60 today, Auckland International Airport was up 0.7% at $7.19, and Air New Zealand was flat at $1.41.

Other companies with travel exposure also made gains, Millennium & Copthorne Hotels was up 3.2% at $2.28 and travel booking software company Serko climbed 1.3% to $4.77.

Serko today said it had limited exposure to the Ukraine crisis in Europe and booking volumes hadn’t been significantly affected.

Since February, Australian booking volumes had increased to be 60% of 2019 levels but NZ volumes had remained suppressed, it said. Booking.com volumes had continued to grow.

Shares in Z Energy jumped 1.1% to $3.67 after Ampol sold the Gull service station network to a private equity buyer, clearing the path for its acquisition of Z.

Sanford shares leapt 3.5% to $4.77 after family-owned investment company Masfen Group disclosed it had bought 1.2 million shares in the past three months, bringing its stake to 7.5%.

The kiwi dollar fell over the weekend, dropping to 68.03 US cents at 3pm in Wellington, from 68.61 cents on Friday.

The US dollar has gained ground on the expectation there will be six or seven rate hikes from the Federal Reserve this year, as it attempts to fight inflation.

Tina Teng, a markets analyst at CMC Markets, said Asian markets were expected to remain volatile ahead of the Federal Reserve meeting later this week.

“Rising commodity prices, flaring inflation, geopolitical tensions and central banks’ hawkish policy guidance have put risky assets on the fringe, with the S&P 500 falling for the second consecutive week and the Dow Jones Industrial Average falling for the fifth consecutive week,” she said.

Teng said the dollar was a risk haven currency amid the Ukraine crisis and was being supported by the Fed’s hawkish policy guidance. It is up about 3% since the war started.

Tags: Market Close