NZ sharemarket falls as investor await Reserve Bank news

Comvita fell more than 11% on an earnings downgrade, and the New Zealand sharemarket dropped a half percent ahead of the Reserve Bank of NZ’s latest monetary policy statement.

Monday, November 27th 2023, 6:32PM

by BusinessDesk

The S&P/NZX 50 Index declined 55.42 points or 0.49% to 11,155.79, with a sharp fall in the last hour of trading after reaching an intraday high of 11,218.02.

There were 34 gainers and 96 decliners on the main board, with 20.59 million shares worth $81.69m changing hands.

David McConnochie, investment adviser with Forsyth Barr, said the market was soft and waiting on the Reserve Bank of NZ (RBNZ) news.

“Some people are getting excited about interest rate cuts, but I suspect the bank will still be pretty dovish, and the rate will stay at present levels for longer.”

The Wednesday monetary policy statement is expected to keep the official cash rate on hold at 5.5% as inflation continues to ease. The October Australia consumer price index will be released the same day, giving an indication of where inflation is at.

Natural health products supplier Comvita declined 34c or 11.49% to $2.62 after downgrading its earnings guidance because of slowing sales in China and the United States, particularly with manuka honey.

Comvita told the market that revenue for the first four months of the 2024 financial year was down 10% compared with the previous corresponding period, and operating earnings (Ebitda) were $6m behind.

Comvita expected half-year revenue to be down 5% and Ebitda to fall 20%. For the full year, Comvita is forecasting revenue of $245m-$255m (last year $234m) after an investment of $33m-$38m and is maintaining its 2025 Ebitda target of $50m.

Consumer spending

McConnochie said there is weaker consumer sentiment globally, and consumer stocks are under pressure to maintain earnings guidance.

“Comvita’s trading had improved in November, but perhaps its end-of-year goals are a little harder to achieve.”

Fisher and Paykel Healthcare decreased 23c to $22.05; Mainfreight was down 90c to $66; Infratil declined 17.5c to $9.880; ANZ Bank fell 51c or 1.9% to $26.33; and Heartland Group decreased 3c or 1.8% to $1.64; Serko fell 14c or 3.19% to $4.25; Scott Technology shed 11c or 3.15% to $3.38; Michael Hill was down 2c or 2.3% to 85c; PGG Wrightson declined 13c or 3.71% to $3.37; and T&G Global gave up 5c or 2.63% to $1.85.

In the energy sector, Meridian gained 10c or 1.96% to $5.21, and Vector was down 9c or 2.41% to $3.65.

In the property sector, Stride was up 3c or 2.31% to $1.33, and Goodman Trust was down 4c or 1.86% to $2.105.

Kiwi Property gained 2c or 2.38% to 86c after reporting a 16.2% drop in net rental income to $89.1m for the six months ending September.

The property company sold $127m of assets, and sales across its mixed-use and retail centres, including Sylvia Park, grew 14.9% to $2.1 billion for the year ending September. Kiwi had a net loss of $36.54m, mainly because of a $81.1m reduction in the value of its portfolio.

NZME added 2c or 2.27% to 90c; Burger Fuel increased 4c or 15.38% to 30c; and NZ Oil & Gas gained 1.5c or 4% to 39c on the new Coalition government pledge to re-open exploration.

Smartpay Holdings was down 8c or 5.18% to $1.465 after reporting a 32.52% increase in half-year revenue to $46.9m and a 17.12% decline in net profit to $2.63m. Operating earnings (Ebitda) were $10.64m, up 42%.

Radius Residential Care, down 0.002c to 14.3c, reported a 20.9% increase in half-year revenue to $84.47m and a 17.7% fall in net profit to $1.42m. Underlying operating earnings (Ebitda) were $10.5m, up 50%.

Tags: Market Close