NZ sharemarket finishes week down more than 0.5%

A hesitant New Zealand sharemarket finished the week with a fall of more than half a percent as it awaits the latest round of company results and digests the recent interest rate rises.

Friday, May 5th 2023, 6:34PM

by BusinessDesk

The S&P/NZX 50 Index was on a slippery slope throughout the session, declining from an early morning high of 11,997.96 and closing at 11,889.01, down 79.54 points or 0.66%.

The index fell just over 1% for the week and is now up 3.2% for the year to date.

There were 81 decliners and 40 gainers over the whole market, but for the second day running trading was exceptionally light with 27.68 million shares worth $74.81m changing hands.

Shane Solly, portfolio manager with Harbour Asset Management, said there was a lot of wariness in the market at present.

“We have seen further interest rate increases by the Australian Reserve Bank, US Federal Reserve and European Central Bank. The hurdle just went up for investing globally.

“People are now asking whether the central banks have done enough and will start pausing the rate hikes,” Solly said.

“The US markets are being dragged down by weakness in the regional banks and will we see credit tightening up. Our labour market is still tight and New Zealand may keep going with higher rates for a longer period.

“We are going into our own reporting season and companies are expected to be conservative in their outlook and earnings guidance. There are quite a few reasons for investors to stop and wait for further information and direction,” Solly said.

The local reporting season begins the week after next with eight companies providing their latest financial results.

The major US indices had their fourth consecutive day of declines, with regional banks again in the spotlight. PacWest Bancorp fell 50.62% to US$3.17 (NZ$5.03), and Western Alliance was down 38.45% to US$18.20.

The Californian PacWest bank was understood to be assessing its strategic options, including a possible sale.

The Dow Jones Industrial Average was down 0.86% to 33,127.74 points; the S&P 500 declined 0.72% to 4061.22; and the Nasdaq Composite decreased 0.49% to 11,966.4.

Dual-listed ANZ Banking Group was down 22c to $25.53 (reaching an intraday low of $24.77) after reporting a 12% increase in cash profit of $3.82b for the first half compared with the second half of the 2022 financial year. Statutory profit was $3.54b, down 1%.

The NZ bank had cash profit of $1.1b, up 1%, and a 17% decrease in statutory profit to $1 billion, which included gains and losses from economic hedges. ANZ NZ provided $11m interest-free funds and waived $1.3m in fees in February and March to customers impacted by the floods and cyclone.

Solly said the market was a little disappointed with the ANZ result, just like National Australia Bank earlier in the week. “Net interest margins are being squeezed and the outlook particularly in New Zealand is pretty cautious.”

Westpac Banking Corporation, down 10c to $22.80, reports its six-month result on Monday. Heartland Group declined 3c or 1.91% to $1.54.

Fisher and Paykel Healthcare was down 27c to $27; Meridian Energy declined 10c or 1.83% to $5.35; Mainfreight shed $1.10 to $71; and Auckland International Airport decreased 7c to $8.75.

The retirement sector was again weaker. Summerset Group was down 18c or 2.17% to $8.12, and Ryman Healthcare declined 7c to $5.30.

Infratil decreased 13.5c to $9.255; Freightways was down 11c to $9.28; Skellerup Holdings declined 13c or 2.66% to $4.75; Ventia Services fell 9c or 3.17% to $2.75; AFT Pharmaceuticals shed 11c or 3.23% to $3.30; ikeGPS was down 3c or 3.563% to 82c; and Serko gave up 6c or 2.62% to $2.23.

In the property sector, Kiwi was down 2.5c or 2.73% to 89c; Argosy declined 1.5c to $1.09; and Precinct shed 2c to $1.23. Synlait declined 5c or 3.38% to $1.35, and a2 Milk was down 4c to $5.71.

Synlait has fallen from $3.77 in mid-December and has slumped 59% over the past 12 months. Spark was up 1.5c to $5.17. The Commerce Commission gave Connexa clearance to buy the mobile tower assets of 2degrees for $1b.

Spark, which is not funding the acquisition, will retain a 17% shareholding in Connexa. Ontario Teachers’ Pension Plan, which is providing funding, will increase its holding to 83%.

Other gainers were Hallenstein Glasson, adding 11c to $6.76; Michael Hill, up 2c or 1.89% to $1.08; Move Logistics, collecting 2c or 2.11% to 97c; Delegat Group, increasing 29c or 3.13% to $9.55; and Comvita, increasing 6c or 2.08% to $2.94.

Tags: Market Close