NZ dollar hits 28-month low

The New Zealand dollar fell to an almost two-and-a-half year low while stocks had a mixed day in NZ’s market.

Tuesday, September 20th 2022, 5:55PM

by BusinessDesk

The S&P/NZX 50 Index rose 38.4 points, or 0.33%, to 11,570.43. Turnover was very light at $68.9 million.

Mike Jones wrote in his last daily note for ASB this morning – as he moves to BNZ in October to take up his new role as their chief economist – that the NZ dollar had hit a 28-month low overnight, falling as low as 59.35 US cents.

It’s the lowest the NZ dollar has fallen in almost two-and-a-half years and Jones said volatility around the currency would probably remain “elevated” throughout the rest of the week.

Throughout the day, the NZ dollar hovered between 59.75 and 59.38 US cents but at 5pm Wellington was at 59.39 US.

The US Federal Reserve’s decision is also coming closer, with the bank revealing early Thursday morning NZ time how much it will hike interest rates.

On the stocks front, KMD Brands was up 5% to $1.05 this morning, after the retailer revealed its full-year results to the market.

Although the company was heavily impacted by lockdowns and the loss of 11,000 trading days across its Australasian stores – which caused net profit to drop by a third – KMD’s dividend to shareholders was still 20% higher than last year’s.

Devon Funds head of retail Greg Smith said KMD’s result had received a positive reaction from the market thanks to its record sales and dividend.

“It’s obviously a very tough period for retailers through the fiscal lockdowns and also supply chain disruption but there were a number of positive takeaways from the results as well as the company’s outlook,” he said.

KMD Brands ended the day up 3% to $1.03.

Transport and logistics firm Move Logistics slammed on the brakes over its deal to buy private bulk transport company Fluidex Transport saying Fluidex's major shareholder Tony Galbraith “reneged” on the $15.2m transaction.

The deal was announced less than a month ago on Aug 24 and included an upfront payment of $7m by the end of October.

Executive director Chris Dunphy said the company had opted to terminate the sale and purchase agreement after the vendor sought better terms.

Move's shares rose 3.3% to $1.25 by the end of the day.

Marketing software developer Plexure dropped 7.5% to 37 cents. The company held its annual meeting today where chief financial officer André Gaylard said he was confident that payments for $7.2m in outstanding invoices would be made.

In its 2022 financial results, the company reported a net loss of $24m, which included a $300,000 deduction for “doubtful debts in relation to two markets impacted by the war in Ukraine”.

Dairy co-op Fonterra reveals its full year earnings this Thursday and Synlait Milk next Tuesday.

Smith said the dairy sector had been “frothing away quite nicely” over the last few weeks and there would be keen interest in what Fonterra and Synlait revealed.

Fonterra Shareholders' Fund Units were up 0.6% to 34 cents, while Synlait Milk was down 0.6% to $3.55. A2 Milk jumped 2.8% to $6.32.

Tags: Market Close