NZ sharemarket closes the week flat

The New Zealand sharemarket closed the week flat as it grappled with a slowing economy and a further earnings downgrade, this time from SkyCity.

Friday, December 8th 2023, 6:15PM

by BusinessDesk

The S&P/NZX50 Index recovered admirably from its intraday low of 11,408.25 and finished at 11,495.64, down 0.97 points or 0.01%.

The index is still 0.3% ahead for the year after gaining 1% this week.

There were 57 gainers and 61 decliners over the whole market, with rebalancing in the FTSE and NZX indices creating some volatility before next Friday's deadline. A total of 25.85 million shares worth $104.17m changed hands.

SkyCity Entertainment Group declined 8c or 4.28% to $1.79 after revising its guidance following five months of trading in the new financial year.

SkyCity is facing reduced electronic gaming machine revenue in NZ and a weaker-than-expected performance from its Adelaide business.

The casino and hotel operator is now expecting full-year operating earnings (Ebitda) of $290m-$310m, and last year, it was $310m. SkyCity had previously forecast a modest year-on-year increase.

Shane Solly, portfolio manager with Harbour Asset Management, said the SkyCity downgrade was disappointing but unsurprising. The cost of living has slowed its activity in NZ.

He said companies before SkyCity, such as Air NZ, Kiwi Property and Freightways, have discussed slowing domestic activity and retail sales.

“Will there be others – I think so," Solly said.

“The New Zealand economy is slowing down quite rapidly, and the Reserve Bank may be working with a different set of data points when it comes back from holiday in the New Year.

“It is a good reminder of what we are dealing with under the (Reserve Bank) tight monetary policy. The market just has to get through this earnings-reset period."

He said the Bank of Japan was looking seriously at increasing liquidity and letting interest rates rise. This may impact the flow of investment capital to Australia and NZ.

Overnight, McDonald’s, the biggest food brand globally, announced it is opening 50,000 new restaurants by 2027. It has partnered with Google to connect the latest cloud technology and apply generative artificial intelligence (AI) solutions across its restaurants worldwide.

Google-parent company Alphabet rose 5.31% to US$136.93 (NZ$222) after announcing the rollout of its generative AI model. The technology-driven Nasdaq Composite surged 1.37% to 14,339.99 points and has risen more than 36% this year.

At home, Scales Corp increased 7c or 2.28% to $3.14 after confirming net profit guidance of $14m-$19m for the 12 months ending December and then doubling the 2024 profit forecast to $30m-$35m.

Scales is paying an interim dividend for the 2023 financial year of 4.25c a share on Jan 18.

Fisher & Paykel Healthcare was up 15c to $24; Ebos Group increased 63c to $37.53; Mercury Energy added 7c to $6.32; and Meridian rose 5c to $5.25.

Auckland International Airport gained 5c to $8.25 on trade worth $23.2m; Briscoe Group was up 10c or 2.18% to $4.69; and Eroad continued a good run, rising 9c or 9.89% to $1.

Infratil declined 13c to $9.92; Freightways decreased 11c to $8.32; Gentrack shed 8c to $6.35; NZME fell 4c or 4.44% to 86c; and Steel & Tube was down 2c or 1.92% to $1.02.

In the property sector, Argosy declined 2c or 1.82 to $1.08; Property for Industry was down 4.5c or 2.01% to $2.195; Vital Healthcare Trust decreased 6.5c or 3.05% to $2.065; and Precinct shed 1.5c to $1.18.

In the retirement sector, Ryman Healthcare was down 5c to $5.30; Arvida Group decreased 3c or 3.09% to 94c; and Oceania Healthcare was up 3c or 4.23% to 74c.

The Carbon Fund fell 10c or 5.24% to $1.81; The Warehouse declined 4c or 2.26% to $1.73; PGG Wrightson shed 9c or 2.66% to $3.29; and 2 Cheap Cars was down 2c or 2.27% to 86c.

Tags: Market Close