NZ market flat as Christmas period kicks off

Fletcher Building was the biggest news to hit the index as New Zealand’s sharemarket ended the day flat thanks to a trickle-through effect from US and NZ companies getting ready for the holiday season.

Friday, December 16th 2022, 7:08PM

by BusinessDesk

Today, the S&P/NZX 50 index was flat at 0.01%, to 11,603.66. Turnover was $394.6 million due to extended trading.

Forsyth Barr investment adviser Damian Foster said NZ’s market had edged down today mostly in response to hawkish comments that the US Federal Reserve made yesterday after it hiked rates by 50 basis points.

“But generally speaking, it's been a reasonably uneventful day as we sort of start to get into that Christmas period where trading starts to slow down a little bit,” he told BusinessDesk.

Fletcher Buildings made a splash earlier on in the day after it revealed it had to add another $150m to its provisions for the cost of building the NZ International Convention Centre (NZICC) as well as the associated hotel in Auckland.

The convention centre and hotel are among a number of high-rise projects that collectively had already cost the company about $1 billion since 2017.

“It is disappointing we require further provisions which are the result of the significant complexity of the project rebuild,” said chief executive Ross Taylor.

“It hasn't been a drastic move in the share price, which tells you that the market wasn't completely surprised,” Foster said.

“Because it is a big number that they came out with in terms of that impairment.”

The property developer fell 2.6% to $4.86.

Sky Network Television was up 0.5% to $2.25 after it secured the rights to deliver Formula 1 across Sky, its digital platforms, and free-to-air channel. The multi-year agreement will see all Formula 1 races shown on Sky’s platforms from the new year.

Chief executive Sophie Moloney said that Formula 1 was “spectacular to watch” and the TV network had found from its research that many of its customers were keen to see the sport on Sky.

“We also expect it to attract new customers, particularly to our streaming service Sky Sport Now,” she said.

Dairy stocks had a mixed day. A2 Milk was down 4.1% to $7.02, Synlait Milk rose 0.3% to $3.63 and Fonterra Shareholders’ Fund Units were also up 2.2% to $3.28.

ANZ Bank was down 0.6% to $25.15. The bank held its annual meeting yesterday where its board was hammered by shareholder activists over the bank’s funding of fossil fuel exploration projects.

Spark rose 2% to $5.34 after announcing to the NZX this morning that TVNZ would become the new home for Spark Sport. Spark confirmed yesterday that it was in discussions with TVNZ over a potential content partnering agreement.

An agreement has already been reached with New Zealand Cricket, Spark said, with TVNZ showing and producing all Black Caps, White Ferns and Super Smash matches – which are all run by NZ Cricket – for the next three years, starting from the 2023/24 cricket season.

“No new venture is without risk, and we recognise that this news will be disappointing for our valued customers and partners, and dedicated Spark Sport team,” Spark chief executive Jolie Hodson said.

Email platform provider Black Pearl jumped up 12% to 56 cents today. The company still has a fair bit further to go before it reaches its listed price of $1.08 but its share price has risen 20 cents from last Friday.

Auckland International Airport traded almost $65 million in volume yesterday and 7.5 million shares after Auckland mayor Wayne Brown speculated in a council meeting that AIA was about to do “a major raising” to fund a new domestic airport.

The airport had to put its shares in a trading halt and inform the market that it had “no plans” to carry out an equity raise.

AIA’s shares had edged up 0.8% to $8.11 by early evening.

Healthcare manufacturer and index heavyweight Fisher & Paykel helped drag down the market today with a 4.2% fall to $22.06.

Tower Insurance also released its annual report to the NZX this morning, with the company noting that it had “successfully navigated global and domestic challenges” during its financial year which included record inflation and supply chain blockages.

“In the coming financial year, we will respond to the government’s new, mandatory climate-related disclosures reporting regime by sharing the risks and opportunities we anticipate from a range of potential climate change scenarios,” the company wrote.

Tower’s shares were up 2.8% to 74.5 cents today.

Make it make cents

Hawkish comments from three central banks – US Federal Reserve, Bank of England (BoE) and the European Central Bank (ECB) – saw the NZ dollar fall more than 1 US cent overnight as investors sought a safer haven in the greenback.

Currency trader OFX said the kiwi was one of the weakest performers and had fallen over 2% to a low of 63.25 US cents. By 3pm this afternoon it was sitting at 63.53 US cents – still over a cent lower from 64.60 cents yesterday.

The BoE and ECB both followed in the Fed’s footsteps when it came to hiking up interest rates and raised rates by 50 basis points to 3.5% and 2% respectively.

The 50bp move has taken BoE rates to their highest level in 14 years – with the bank telling borrowers to prepare for more increases in the new year as well. The ECB also believes it will have to significantly raise interest rates to get on top of inflation.

On the other side of the coin, the NZ and Aussie cross made up a pinch of lost ground today. The NZ dollar was sitting at 94.74 Australian cents at 3pm, up from 94.08 cents yesterday.

Tags: Market Close