NZ sharemarket hits 16-month low

The New Zealand sharemarket hit a 16-month low with a fall of nearly 1% following further mixed messages on company earnings from the latest annual meetings.

Friday, October 27th 2023, 6:17PM

by BusinessDesk

The S&P/NZX 50 Index continued to slide throughout the day on light trading and closed at 10,766.82, down 81.72 points or 0.75%. It sat at 10,753.16 points on July 1 last year.

The index finished a gloomy week with a decline of more than 2% and has fallen 6% so far this year, most of the damage being done since the end of August when bond yields began rising.

There were 82 decliners and 42 gainers over the whole market on low volumes of 25.08 million share transactions worth $78.69m.

Shane Solly, portfolio manager with Harbour Asset Management, said there was definitely a move away from NZ shares in asset allocations.

“The gentailers have come under pressure with the rising bond yields, and companies are producing mixed outlooks from their annual meetings," Solly said. “Port of Tauranga was a disappointment on the day with a significant reduction in earnings that were below market expectation, but there were compounding factors.

“There was something for everyone in the Fletcher Building outlook – some parts of the business are going well while others are soft.”

Port of Tauranga fell 25c or 4.63% to $5.15, its lowest close since the start of January 2019. The port company told shareholders at the annual meeting that total trade was down 9% for the three months ending September, and full-year earnings are expected to be $95m-$107m, lower than last year’s group net profit of $117.1m.

Container volumes decreased 20.9% to more than 250,000 TEUs (20-foot equivalent units) in the three-month period, but the country’s largest port expects some recovery with the usual pre-Christmas boost to imports.

Port of Tauranga said coastal shipping changes, an early end to the kiwifruit season and a slow start to the dairy export season impacted recent trading. The port company is pushing ahead with automating new container storage areas at its Sulphur Point terminal.

Fletcher Building and SkyCity Entertainment made gains following their annual meetings.

Fletcher was up 1c to $4.36 after telling shareholders that trading cashflows (excluding legacy construction) are expected to be robust in the present 2024 financial year.

The Australian materials and distribution business was trading well, while the NZ division was tracking slightly behind previous expectations. Fletcher said there were green shoots in the NZ housing market, and its full-year sales target of 700-800 units could be beaten.

SkyCity also increased 2c to $1.90 after confirming a modest year-on-year increase in operating earnings (Ebitda) on the back of a good performance in July and August, driven by the impact of the Fifa Women’s World Cup soccer.

But SkyCity said: “This was probably masking weaker domestic spend due to the uncertain economic environment, which became more apparent in September trading.”

Fisher and Paykel Healthcare was down 25c to $20.45, its lowest level since Nov 18 last year when it reached $20.50, and Mainfreight hit a three-year low after falling $2.41 or 4.06% to $58.50. Another market leader, Ebos Group, fell 86c or 2.44% to $34.39.

The interest rate-sensitive energy stocks were again weak. Mercury fell 26.5c or 4.4% to $5.755; Contact was down 10c to $7.80; Meridian declined 1c to $4.88; Genesis shed 5c or 2.11% to $2.32; and Manawa decreased 4c to $4.25.

Technology stocks Serko was down 15c or 3.66% to $3.95, and Vista decreased 4c or 2.99% to $1.30 following another tumble on the Nasdaq Composite in the United States.

Ryman Healthcare rose 25c or 4.6% to $5.68; a2 Milk gained 7c to $4.22; Freightways rebounded 5c to $7.60; and Argosy added 1.5c to $1.07.

Other decliners were Restaurant Brands, down 14c or 3.7% to $3.64; Channel Infrastructure, shedding 4c or 2.76% to $1.41; Auckland International Airport, decreasing 7.5c to $7.40.5; and PGG Wrightson, down 11c or 3.18% to $3.35.

Burger Fuel, increasing 3.5c or 12.96% to 30.5c, is returning $4.077m of excess cash, equivalent to 0.08c a share, to shareholders.

Cannasouth gained 0.008c or 4.71% to 17.8c after telling the market the Medicinal Cannabis Agency has approved its first two CBD oral solutions, which will be immediately launched on the NZ market.

Tags: Market Close