NZ shares start second half of the year more positively

New Zealand’s benchmark share index rose on Monday thanks to positive sentiment flowing through from US markets over the weekend.

Monday, July 4th 2022, 6:12PM

by BusinessDesk

The S&P/NZX 50 Index rose 109 points or 1.02%, to 10,862.340. Turnover was on the light side at $97.5 million.

Devon Funds head of retail Greg Smith said investor attention remained “very much focused” on the scope of interest rate tightening that was necessary to address multi-decade inflation highs – as well as the economy’s ability to withstand this process.

Smith said Sky City Entertainment stood out as the biggest decliner of the day, falling 4.1% to $2.81. He said the fact that SkyCity's Adelaide casino was facing an independent review was probably behind the decline as the stock had performed well during June.

Travel stocks like Air NZ and Auckland International Airport were up today which Smith put down to loosening borders and the uptick in travel.

He said Air NZ had been under “significant pressure” since its capital raise, so it was good for the airline the borders were continuing to open back up to full capacity and put the airline in a more commercially favourable position.

“The main problem continues to be the price of oil,” he said. “That's a big cost to the airlines.”

Air NZ shares were up 5.1% to 61.5 cents today and Auckland International Airport also rose 1% to $7.33.

Last week, Tourism Holdings told the NZX it was willing to sell some assets to clear the path for its acquisition of Apollo Tourism & Leisure.

Today, Forsyth Barr head of research Andy Bowley said the “new deal” was less attractive but had a better chance of being approved by the Commerce Commission.

“The key question for investors is whether or not it is better than no deal,” he wrote in a note.

Eroad shares which have been slammed over the past year were flat at $1.47 per share at the end of the day while pharmaceutical company Ebos – which was down 3% to $37.81 on Friday – rose 0.5% to $38.01.

Pushpay Holdings was down just 0.8% to $1.20 today after falling 4.7% on Friday.

Health and skincare company Me Today was also up 8.3% to 13 cents after announcing to the NZX this morning that it had placed $750,000 of the shortfall arising from its rights issue – bringing the total capital raised to approximately $7.5m.

The company said the shortfall placement was completed by capital markets advisory firm CM Partners and the new shares arising from the placement will be allotted on July 6.

The NZ dollar was trading at 62.07 US cents at 3pm in Wellington, down from 62.30 cents yesterday. The trade-weighted index was at 70.48, from 70.48 yesterday.

Independent treasury adviser Peter Cavanaugh said the kiwi was “hanging in there” as investors waited nervously to see what happened this Wednesday onwards. This is due to US markets being closed tomorrow as the country celebrated Independence Day and the Australian central bank announcing its next monetary policy decision.

“There's a lot of people in the market concerned that if the NZ dollar manages to sustain a fall below 60 cents, then you're looking at some very ugly numbers,” he said.

“The kiwi is always going to be like a cork on the waves of global sentiment,” Cavanaugh said.

Tags: Market Close