NZ dollar dips as equities hit by post-earnings season blues

The New Zealand dollar today dipped below US61 cents for the first time since mid-July as currency traders weighed up risks and rewards in a global environment of soaring inflation and recession fears.

Thursday, September 1st 2022, 5:53PM

by BusinessDesk

Locally, a lack of major announcements and investors possibly suffering from a post-earnings season hangover and the September blues led to a flat sharemarket with another day of low turnover.

Mark Lister, head of private wealth research at Craigs Investment Partners, said the market was currently feeling “directionless” as it surfaced from the “hive of activity” that the earnings season had brought to the market over August.

“We're in a bit of a no man's land at the moment and most investors are happy to sit on the sidelines and see how things go and sort of reassess,” he said.

“Everyone's crystal ball is looking quite cloudy.”

The S&P/NZX 50 Index scraped up by 8.7 points, or 0.08%, to 11,609.82. Turnover was $87.4 million.

Healthcare manufacturer Fisher & Paykel Healthcare was up 1.5% to $19.95 which helped pull the market slighter higher than it was earlier in the day.

The healthcare company today announced it plans to spend $275m on a 105-hectare site in South Auckland to establish a second research and development and pilot manufacturing facility.

The new site in Karaka will complement its existing Highbrook facility in East Tamaki, which is nearing capacity. However, the land purchase is conditional on Overseas Investment Office approval and will be funded through a mix of operating cashflow and debt.

South Port shares were up 0.11% to $8.72 – but only on $444 worth of value traded – after the Bluff port told the market it had been granted resource consent by Environment Southland to dredge and remove seabed material to deepen the harbour entrance channel.

The company applied for the consent last year, to help improve safety margins for ship movement and greater capacity for vessels to take more cargo.

Napier Port also announced that the company had registered a product disclosure statement for an offer of up to $75m of unsecured, unsubordinated, fixed rate five-and-a-half year bonds.

The offer is only available to NZ investors and “certain Australian institutional investors” and eligible shareholders will be able to apply for bonds from Sept 12 to Sept 15.

The company’s shares were up 0.7% to $2.98 by early evening on light volume.

AFT Pharmaceuticals fell 1.4% to $3.45 by the end of the day after the pharmaceutical company announced its plan to license intellectual property from two leading scientific research centres in the hopes of developing a topical treatment for strawberry birthmarks in children.

The company told the NZX this morning that it had reached an agreement with Massey Ventures, a commercial subsidiary of Massey University, and the Gillies McIndoe Research Institute, to use their research.

“With the tightening economic conditions, we have seen more research and development opportunities arise so AFT is aggressively pursuing these growth opportunities,” managing director Dr Hartley Atkinson said.

Cervical cancer screening company TruScreen jumped up 6.4% to 5 cents after it announced it had signed a five-year manufacturing agreement with manufacturer Zapco.

TruScreen told the NZX that the agreement confirmed TruScreen’s confidence in growing demand for the company’s cervical cancer screening medical device.

Lister said looking at seasonal patterns from as far back as 1950, September was always the worst month for markets, especially in the US, which would likely bleed into NZ’s market.

“We'll have a difficult September and then maybe we'll start to see a bit of stability or maybe even a bit of a lift sort of through the end of the year,” he said. “But it still comes down to inflation, interest rates, and no recession.”

Index heavyweights telecommunications company Spark and aged care provider Ryman Healthcare were both down on reasonably high turnover today. Spark fell 1.3% to $5.35, and Ryman Healthcare was down 0.9% to $9.11.

On the currency front, the NZ dollar was trading at 60.96 US cents at 3pm in Wellington, down from 61.43 US cents yesterday.

Tags: Market Close