Stormy weather dampens uncertain NZ sharemarket

The New Zealand sharemarket had another uncertain day – just like the effect of Auckland weather – and Tourism Holdings plunged nearly 10% on a cautious trading outlook.

Tuesday, May 9th 2023, 7:22PM 1 Comment

by BusinessDesk

The S&P/NZX 50 Index fell early and stayed that way to close at 11,889.61, down 52.87 points or 0.44%.

There were 84 decliners and 41 gainers over the whole market on volumes of 34.46 million share transactions worth $131.48m.

Matt Goodson, managing director of Salt Funds Management, said it was a mixed day on the market.

“To be honest, in Auckland, the market was distracted by the weather as people’s concerns turned to transport and getting home to check their properties. That’s what they cared about today,” he said.

Recently merged Tourism Holdings slumped 40c or 9.41% to $3.85 on increased trade worth $11.02m after providing a trading update at its investor day, which reaffirmed its full-year net-profit guidance of more than $48m.

Tourism Holdings said forward bookings for the 2023/24 high season in its NZ and Australian businesses indicated that international volumes will continue to grow, with some reduction in domestic activity.

Recreation vehicle rental yields are experiencing growth or holding the recent growth, and vehicle sales demand is softening in all markets from the recent peaks.

Tourism Holdings expects international travel volumes from most markets will return to pre-covid levels late next year, while the recovery of inbound from China will take longer. Travel trends may pivot more towards lower-cost destinations over the short to medium-term.

Goodson said there were a couple of cautionary elements to Tourism Holdings’ update – the tepid outlook for domestic business and the concern that the tougher economic climate will affect high-end tourism activity.

The stock has been a strong performer and a post-covid tourism player, but the reality is that international travel is still only 80% of the pre-covid level.

Global marketer a2 Milk was down 16c or 2.78% to $5.60 after announcing several leadership and organisational changes to its United States, Australia and NZ (ANZ), and Mataura Valley Milk business.

US chief executive Blake Waltrip is leaving after seven years and will be replaced by Kevin Bush, the executive general manager of ANZ. Eleanor Khor will take over as managing director of ANZ, as well as retaining her chief strategy role.

Mataura Valley chief executive Bernard May is also leaving after seven years, and John Roberts has been appointed interim general manager and will work with Chopin Zhang to transform the company’s supply chain.

Goodson said management changes are not necessarily a bad thing but the market questions such changes. “We will find out how a2 Milk is travelling when it reports its latest result.”

SkyCity Entertainment, awaiting the result of the Australian Transaction Reports and Analysis Centre civil proceedings, reached a 26-month low after falling 6c or 2.6% to $2.25. SkyCity hit $1.87 on March 1, 2020.

SkyCity Adelaide is under investigation for alleged breaches of anti-money laundering laws.

Fisher & Paykel Healthcare, which is holding investor days at its manufacturing operations in Tijuana, Mexico, and Irvine, California, in mid-September, was down 20c to $26.75 after reaching an intraday low of $26.20.

Ebos Group declined 27c to $44.50; Fletcher Building shed 19c or 3.95% to $4.62; Contact Energy was down 8c to $7.90; Hallenstein Glasson drifted 8c to $6.83; and Westpac Bank was down 26c to $23.18.

Winton Land was down 4c or 2.15% to $1.82; Seeka fell 10c or 3.7% to $2.60; Fonterra Shareholders’ Fund declined 8c or 2.14% to $3.66; Pacific Edge shed 1.5c or 3.41% to 42.5c; and Move Logistics decreased 2c or 2.06% to 95c.

Savor declined 1.5c or 3.9% to 37c; Foley Wines was down 3c or 2.26% to $1.30; and NZ Automotive Investments plunged 7c or 21.88% to 25c.

Auckland International Airport, down 1c to $8.74, has launched a $100m five-and-a-half-year bond offer, with the ability to accept a further $50m in oversubscriptions.

Mercury Energy was up 11c or 1.72% to $6.49; Ryman Healthcare gained 6c to $5.34; and AFT Pharmaceuticals increased 11c or 3.33% to $3.44.

Trans-Tasman fuel supplier Ampol was down $1.46 or 4.37% to $31.98. Ampol earlier reported an 82% increase in first-quarter operating earnings (Ebit) to $345.5m – its second-strongest quarterly result in history.

Total sales volume, including Z service stations in NZ, rose 50% to 6,897 millilitres compared with 4,586ML in the first quarter of last year.

As the torrential rain hit Auckland again, insurer Tower was unchanged at 58c. The day before, Tower told the market that a surge in insurance claims from the Auckland Anniversary Weekend flooding and Cyclone Gabrielle damage would result in a first-half loss of about $3m.

Tags: Market Close