NZ dollar hits pandemic lows

It was action stations across domestic and international markets today, with the US Federal Reserve (the Fed) deciding on a 75 basis-point interest-rate hike this morning, an announcement which sent the New Zealand dollar plummeting to its lowest point since March 2020.

Thursday, September 22nd 2022, 5:58PM

by BusinessDesk

The NZ dollar was trading at 58.31 US cents at 5pm Wellington today, down from 58.90 cents yesterday.

The S&P/NZX 50 Index rose 19.3 points, or 0.17%, to 11,518.32. Turnover was a very light $56.5 million due to a public holiday closing the Australian stock exchange (ASX).

Mark Lister, Craigs Investment Partners' head of wealth research said the big story of the day wasn’t so much how far the NZ dollar had fallen but how high far the US dollar had climbed.

He said NZ’s market had held up “surprisingly well” considering the current uncertainty around the NZ dollar and that international markets had reacted negatively to the news.

“Our market should be proud of the fact that it has slightly increased,” he said. “It’s been a very good day today.”

On the stocks front, dairy co-op Fonterra said its annual profit dipped slightly in its full-year results and told the market it was no longer selling its stake in Australia.

“We’ve looked at a number of options for our Australian business and have decided that it’s in the co-op’s best interests to maintain full ownership,” it said.

Net profit, including non-controlling interests, was $583m in the 12 months to July 31, down 3% on the year. Normalised profit, which strips out one-off items such as gains and losses on asset sales, edged up 1% to $591m.

Fonterra Shareholder Fund Units were down 0.87% to $3.40 by the end of the day.

Lister said the higher US dollar was good business for export-heavy stocks like Fonterra and healthcare manufacturer Fisher & Paykel Healthcare as the businesses became much more competitive.

“It's great for them, but it's a big problem for the Reserve Bank because it means that our buying power in the global market is lower,” he said.

Fisher & Paykel Healthcare rose over the course of the day and was up 1.5% to $19.56 at close.

Tourism Holdings was down 1.9% to $2.65 after it revealed that Apollo Tourism and Leisure shareholders will own slightly more of Tourism Holdings in the proposed merger after the trans-Tasman tourism operators tweaked the terms of their tie-up.

Tourism Holdings told the NZX first thing this morning that the revised ratio included one ordinary THL share being issued for every 3.2 ordinary Apollo shares held by the company’s shareholders – which excludes THL.

It would mean Apollo’s shareholders own about 27.5% of the merged entity while THL shareholders would own 72.5%.

Air NZ held its annual meeting this afternoon in Auckland, with the airline in good spirits on the back of its shares soaring up yesterday over the news of its positive half-year earnings guidance.

It told shareholders it wasn’t concerned about the weak kiwi dollar hitting the airline's profitability or the price of airfares.

The NZ dollar’s current decline and whether that would knock Air NZ's profitability were key questions raised at the airline's annual meeting this afternoon.

Energy company Mercury was down 1.56% to $6 today after it held its annual meeting in Auckland earlier today.

The meeting in Auckland was the first since Mercury bought rival Trustpower's retail business, doubling its retail customer connections, which sat at 799,000 at June 30, of which 574,000 were electricity, 95,000 gas, 117,000 telecommunications, and 13,000 mobile.

Cancer diagnostics company Pacific Edge announced this morning that its commercial agreement with Te Whatu Ora Southern was still yet to be signed at this stage.

Chief Financial Officer Grant Gibson said the business case is currently with the management team at Te Whatu Ora Southern and following that will enter an approvals cycle.

Pacific Edge shares fell 4% to 47.5 cents by the end of the day.

Infratil was up 0.3% to $9.18 after it told the market that infrastructure investment firm Morrison & Co Infratil had completed the on-market acquisition of $40m Infratil shares on behalf of Morrison & Co.

The shares were purchased under a fixed trading programme with approximately 4,367,939 shares for a total cost of $39,999,990.47.

Tags: Market Close