Currency volatility drives NZ market down

It’s been an eventful week for New Zealand’s market which was closed on Monday for the Queen Elizabeth Memorial Day holiday and then spent the rest of this week being bounced around by the tidal forces of global currencies.

Friday, September 30th 2022, 5:55PM

by BusinessDesk

The S&P/NZX 50 Index fell 134.3 points, or 1.2%, to 11,065.71. Turnover was $229.2 million, much higher on end-of-month trading.

Currency markets have been scrambling all week and this bled into stock markets after the UK’s new government chancellor Kwasi Kwarteng announced a major fiscal spending package with considerable tax cuts last Friday.

Hamilton Hindin Greene's Grant Davies said NZ’s market had ended on a “sour note” today and was following the US markets lead.

“It's all really same themes continuing,” he told BusinessDesk. “Interest rates rising and obviously questions of whether we can get inflation under control.”

Markets globally were still jumpy following the surprise UK fiscal package, he said.

“It's still a bit uncertain and the one thing the markets don’t like is uncertainty. Hence the rocky week we've had,” he added.

Utility pole management company IkeGPS had the biggest jump up the index today – rising 12% to 84 cents – but on very light value traded. The company held its annual meeting today and passed all of its resolutions.

Global cinema software provider Vista Group also rose 5.8% to $1.64.

Steel & Tube Holdings told the NZX this morning that its revenue was up 15% – on largely flat volumes – in the first six weeks of its financial year.

Trading through July and August was steady across most sectors with earnings supported by operational and trading disciplines. The company said it expected steel prices to remain elevated in the near term with customer activity likely to be steady.

The shares were up 3% to $1.38 at close.

Radius Residential Care announced the settlement of the Matamata Country Lodge acquisition late yesterday afternoon. The aged-care provider had previously revealed back in August that it had entered into an agreement to acquire the assets and business of Matamata Country Lodge along with three neighbouring properties for $17.1m.

Today, its shares were flat at 31 cents.

Ryman residential Healthcare was down 0.6% to $8.55 while Summerset Group bounced up 2.7% to $10.78.

Hallenstein Glassons Holdings revealed its NZ profit plummeted by 64% in its stores due to pandemic struggles.

In the 12 months ended Aug 1, its NZ net profit came to just $4.1m, a large fall of 64.7% on the prior corresponding period, which was $11.6m. NZ sales were a touch better but were still down 13% to $104.4m.

Chief executive Stuart Duncan told the NZX that the retailer had to battle a difficult trading environment over the past year. Omicron surges impacted staffing and changes to customer shopping habits, particularly in the NZ market.

Its shares rose 4.2% to $5.20 today.

KMD Brands shares were flat at $1.05 and The Warehouse Group fell 2.5% to $3.09.

Tourism Holdings was flat at $2.80. Yesterday, the Australian Competition and Consumer Commission (ACCC) gave Tourism Holdings and Apollo Tourism & Leisure the thumbs up on their proposed merger – as long as Apollo sells off $45m of its assets to the budget campervan company, Jucy Rentals.

Dairy co-op Fonterra said in its monthly global dairy update today that milk volumes were down in NZ in August – falling 4.9% on a litre basis – while US monthly production had improved and was up 1.6% compared to the previous corresponding area in 2021. Production declined in Australia and the EU, falling 8.3% and 0.3% respectively.

Fonterra Shareholders' Fund Units shares fell 1.3% to $3.04.

Infant formula exporter A2 Milk was down 0.7% to $6.12 after saying it intends to commence an on-market share buyback programme on Oct 5.

The company said the buyback programme could last up to 12 months and could acquire up to 37,180,621 ordinary shares through the NZX and ASX – at the prevailing market price – in that period.

A2 Milk also gave a brief trading update for the first quarter of the 2023 financial period, with sales expected to be “marginally ahead”. This was primarily due to the benefit of favourable foreign exchange which was being driven by the falling NZ dollar.

Synlait Milk was flat at $3.55.

Tags: Market Close