NZ sharemarket down 0.29%

Manuka honey producer Comvita slumped on its fourth earnings downgrade in eight months, but the New Zealand sharemarket hung in with a small fall.

Monday, July 29th 2024, 6:38PM

by BusinessDesk

The S&P/NZX 50 Index fluctuated between 12,308.34 and 12,353.64 before closing at 12,313.62, down 35.85 points or 0.29% following a late dip.

There were 86 gainers and 62 decliners over the whole market on volumes of 46.25 million share transactions worth $112.76m.

Comvita fell 10c, or 8.2%, to a 15-year low of $1.12 after reporting an unaudited full-year net loss of $16.8m, compared with a $13.1 m net profit in the previous year.

Continuing weakness in the Chinese market and a slowdown in other Asian markets meant Comvita’s revenue of $204.5m was below the previous guidance of $221m-$218m. Operating earnings (ebitda) of $17.1m were also behind the guidance of $23m-$28m.

Comvita had earlier revised its guidance downwards in May, February, and November last year.

The board has engaged an independent expert to provide impairment advice about a possible material gap between the company’s net total assets (tangible and intangible) and its market capitalisation.

Mark Lister, investment director with Craigs Investment Partners, said, “We don’t want to see any more bad news like Comvita’s ahead of the August reporting season; let’s hope most of it is out there (in the market) already.”

He said it was Comvita’s fourth downgrade within a financial year, and there doesn’t seem to be much evidence of a recovery looming.

“Comvita is taking a look at its assets and inventory valuations, and if they fall, that would not be great for pricing and demand. It looks like there’s more to come.”

Lister said markets are looking ahead to the United States Federal Reserve meeting and quarterly earnings from Microsoft, Meta, Amazon and Apple later this week.

“The technology sector has been quite weak lately and investors will be on edge as they await the latest results from the Magnificent Seven and whether they live up to expectation.”

The US major indices rebounded strongly at the weekend (NZ time) after the influential personal consumption expenditures price index was muted, increasing hopes for a September interest rate cut.

The June index was up 0.1% and 2.5% for the year, matching forecasts. The Dow Jones Industrial Average climbed 654 points or 1.64% to 40,589.34; the S&P 500 increased 1.11% to 5,459.10; and the Nasdaq Composite was up 1.03% to 17,357.88.

Across the Tasman, the S&P/ASX 200 Index had gained 0.8% to 7,984.9 points at 6pm NZ time.

Local market

At home, Fletcher Building declined 19c or 5.72% to $3.13 after telling the market that the ship carrying Golden Bay cement around the North Island has struck a mechanical issue and is docked at Northport near Whangarei.

Fletcher said the cost of the disruption – including finding alternative transportation or supply – is expected to be $10m-$30m on the 2025 financial year earnings.

Market leader Fisher and Paykel Healthcare declined 56c or 1.74% to $31.66; Summerset was down 20c or 1.79% to $10.95; Freightways eased 19c or 2.11% to $8.80; Manawa Energy shed 15c or 3.36% to $4.31; and Sky TV decreased 5c or 1.89% to $2.60.

The Warehouse eased 3c or 2.11% to $1.39; Ventia Services was down 20c or 4.26% to $4.50; NZME decreased 3c or 2.8% to $1.04; and Marsden Maritime Holdings declined 7c or 2.05% to $3.35.

Heartland Group shed 2c or 1.82% to $1.08; Smartpay Holdings declined 3.5c or 2.79% to $1.22; and My Food Bag was down 0.009c or 5.42% to 15.7c.

In the property sector, Investore was down 6c, or 5.08%, to $1.12, and Property for Industry decreased 4c, or 1.78%, to $2.21.

Mainfreight collected 55c to $72.55; Spark increased 8c or 1.91% to $4.26; a2 Milk was up 8c to $7.68; Restaurant Brands added 9c or 2.9% to $3.19; and Blackpearl Group gained 2c or 2.63% to 78c.

Rakon rose 5c or 6.17% to 86c; Accordant Group was up 6c or 9.84% to 67c; Santana Minerals increased 8.5c or 6.39% to $1.415; South Port NZ added 15c or 2.56% to $6; and CDL Investments improved 2c or 2.63% to 78c.

Wine exporters Foley Wines was up 4c or 5% to 84c, and Delegat Group was down 12c or 2.29% to $5.13.

Pacific Edge was down 0.004c or 4.26% to 9c after telling the market that US Medicare contractor Novitas has granted an extension to the local coverage determination and is considering all the feedback from interested parties regarding the genetic testing for oncology. Meanwhile, Pacific Edge continues to receive Medicare reimbursement.

Third Age Health gained 4c or 2.41% to $1.70 after reporting a 140% rise in net profit to $521,000 for the first quarter of the 2025 financial year.

Tags: Market Close