NZ market bouncing around as investors remain wary

Retailer Briscoe Group brought some joy to the New Zealand share market, with record annual earnings, but investors remained wary following the bank failures in the United States.

Wednesday, March 15th 2023, 6:44PM

by BusinessDesk

The S&P/NZX 50 Index fluctuated from a high of 11,661.87 to a low of 11,583.45 and closed at 11,617.27, up 21.79 points or 0.19%.

There were 77 gainers and 49 decliners on the main board, with 30.64 million shares worth $116.61 million changing hands.

Jarden wealth management adviser Greg Main said markets are bouncing around following the sell-off earlier in the week and investors are looking over their shoulders to see if anything else comes out of the financial woodwork.

“The collapse of the two banks (Silicon Valley and Signature) showed that nothing is risk-free, even long-term bonds. The 10-year government bond yield fell from 4.7% to 4.3% and is now back to near 4.5%.

“All eyes will be on the US Federal Reserve when they meet next week and suddenly it looks like they have changed their tune from a 50-basis points rise in interest rates to 25-basis points or nothing. That’s a big change in a short period,” Main said.

Maybe the Federal Reserve was satisfied with the February consumer price index increasing 0.4% from the previous month and annual inflation falling from 6.4% to 6% – in line with expectations.

Wall Street rebounded, with the Dow Jones Industrial Average up 1.06% to 32,155.4 points, the S&P 500 increasing 1.65% to 3919.29, and the Nasdaq Composite rising 2.14% to 11,428.15.

Meta Platforms (Facebook, Instagram, WhatsApp, Messenger) surged 7.5% to US$194.02 (NZ$311.82) after announcing a further cut of 10,000 jobs, following the earlier round of 11,000 layoffs.

At home, Briscoe Group was up 11c or 2.34% to $4.82 after reporting a 5.56% increase in revenue to $785.85m and net profit of $88.43m, up 0.6 %, for the year ending Jan 29. It is paying a final dividend of 16c a share on March 30.

Online sales made up 18.97% of group revenue. Briscoe said retail in NZ will remain highly sensitive and “we do not underestimate just how challenging trading could be and currently we expect it to be difficult to replicate this year’s record profit".

Main said Briscoe continues to do a good job but, like everyone else, they are seeing pressures in their business. “We’ve yet to see higher interest rates (mortgages) kick in and a real change in spending pattern. There’s always a lag and no doubt people are noticing they can’t go out and spend as much with the higher cost of living.”

Fisher and Paykel Healthcare rebounded 19c to $25.10; Ebos Group was up 34c to $45.50; Chorus increased 12c to $7.90; Spark added 6.5c to $5.025; and a2 Milk collected 14c or 2.01% to $7.09.

The leading banks recovered, with ANZ up 64c or 2.6% to $25.29, and Westpac gaining 70c or 3.07% to $23.50.

Marlin Global Fund, which had a small holding in Signature Bank, rose 6c or 7.06% to 91c. Fellow Fisher Funds-managed Barramundi, investing in Australian shares, was up 2c or 2.86% to 72c.

Other gainers were Tourism Holdings rising 13c or 3.29% to $4.08; Eroad up 5c or 6.41% to 83c; Sky TV increasing 6c or 2.47% to $2.49; Vista Group improving 5c or 3.73% to $1.39; and Steel & Tube adding 3c or 2.46% to $1.25.

Meridian Energy declined 14c or 2.69% to $5.12 after telling the market that retail sales volumes in February were 9.7% higher than the same month last year. National electricity demand was down 0.1% in the same comparable months.

In another February operating report, Contact said its mass market electricity and gas sales were 251GWh compared with 262GWh in the same month last year. Contact was up 5c to $7.55.

Mercury, which held an investor day in Palmerston North, was down 3.3c to $6.25.

Other decliners were Restaurant Brands down 11c or 1.81% to $5.96; Mainfreight losing 90c to $68.50; Napier Port decreasing 8c or 2.94% to $2.64; Pushpay shedding 3c or 2.38% to $1.23 and South Port NZ down 10c to $7.90.

Transport and logistics software company TradeWindow, down 2c or 6.06% to 31c, is cutting up to 35 jobs, a third of its staff, to reduce cash usage to a more sustainable level. Quayside Holdings increased its shareholding in TradeWindow to 13.629%, from 10.598%.

F&C Investment Trust, unchanged at $18.04, has written off 51,453 shares in Silicon Valley Bank which were worth NZ$8.75m before the bank collapsed. The holding was 0.09% of F&C’s portfolio.

Comvita, unchanged at $3.27, told the market that its US joint venture partner Caravan Honey has received US$2.5m deposited with Silicon Valley Bank and transferred the money to Bank of America.

Tags: Market Close