NZ sharemarket falls 1% to near-low for year

The New Zealand sharemarket tumbled 1% to a near-low for the year, triggered by a sell-off in leading stocks and not the tax-friendly Budget.

Thursday, May 30th 2024, 6:41PM

by BusinessDesk

The S&P/NZX 50 Index was already in a steep decline when the government announced income tax cuts worth $14.72 billion for the first time in 14 years and returning to an operating surplus in 2017-18.

The index closed at 11,557.21, down 121.46 points or 1.04%. It was only the second time the index had gone under 11,600 points this year, on May 15, when it ended at 11,525.88.

There were 98 decliners and 37 decliners over the whole market on volumes of 68.8 million share transactions worth $252.42m.

The trading highlight was a group of European investors' block sale of 35m Ryman Healthcare shares. Ryman finished 5c ahead at $3.66 on trade worth $133.55m.

Shane Solly, portfolio manager with Harbour Asset Management, said the Europeans invested in Ryman three to five years ago, and it was a sad way to exit the investment. They had expected more growth from the company.

“The market was aware of the overhang of shares, and big cap stocks were sold off to fund the Ryman buying. The management is addressing the issues to make Ryman more profitable but the Europeans lost trust six months ago.”

Solly said the Budget was not surprising for the market, and it was interesting to see Treasury forecasting the first official cash rate cut in August or September.

ANZ Research said the fiscal reshuffle (in the Budget) was not a game-changer for the economic outlook.

“The Budget is just the beginning of what’s likely to be a very challenging few years ahead as the government trades off getting the books in order and delivering key public services and investment.”

Solly said the market has had a healthy correction and recognised the economy is going through a tough winter.

Local market

Ebos Group, being removed from the MSCI at the end of the month, was down 78c or 2.16% to $35.32. Fisher and Paykel Healthcare eased 25c to $28.50; Mainfreight declined 85c to $68.75; Summerset decreased 26c or 2.69% to $9.40; and Infratil was down 13c to $10.51.

In the property sector, Stride was down 3c or 2.36% to $1.24; Property for Industry fell 9c or 4.21% to $2.05; Argosy declined 3c or 2.83% to $1.03; and Precinct shed 3c or 2.61% to $1.12.

Skellerup gave up 22c or 5.87% to $3.53; a2 Milk was down 13c to $7.51; Contact Energy declined 15c to $8.80; Ventia Services decreased 10c or 2.6% to $3.75; and Scales Corp shed 9c or 2.7% to $3.24.

The Warehouse was down 5c or 4.27% to $1.12; Tourism Holdings decreased 4c or 2.06% to $1.90; Rakon fell 5c or 5.88% to 80c; and Delegat Group eased 8c or 1.74% to $4.52.

Manuka honey producer Comvita plunged 35c or 18.92% to a 13-year low of $1.50 after telling the market that an offshore party was no longer proceeding with a takeover offer, representing a significant premium to Comvita’s share price.

Foley Wines rose 7c or 8.43% to 90c; Seeka increased 10c or 4.35% to $2.40; Winton Land gained 6c or 2.94% to $2.10; Synlait Milk improved 2c or 4.49% to 46.5c; Fonterra Shareholders’ Fund was up 6c to $3.89; and Salt's Carbon Fund collected 7c or 5.19% to $1.42.

Green Cross Health was down 3c or 2.97% to 98c after reporting steady revenue of $503.9m and a 74% fall in net profit to $11.75m for the year ending March. It is paying a final dividend of 2c a share on June 21.

Green Cross, which owns Unichem, Life Pharmacy and The Doctors, invested in seven medical centres during the year and now has 66 centres and 423,000 enrolled patients, making it the country’s largest general practice network.

Trade Window was up 0.006c or 3.57% to 17.4c after reporting a 26% increase in revenue to $6.18m and a net loss of $8.01m for the year ending March. Annual recurring revenue was up 21% to $6.3m, forecasting revenue of $7.3m-$8.3m for the 2025 financial year.

Recruitment firm Accordant, hit by the slowdown in public service hiring, declined 3c or 6.25% to 45c after reporting a 6.6% decrease in revenue to $212.38m and a net loss of $10m for the year ending March.

The company reduced its goodwill by $6.5m.

Tags: Market Close