Virus package boosts NZX

The New Zealand sharemarket got a boost from the Government’s coronavirus rescue package following another black day on world sharemarkets.

Shortly after Finance Minister Grant Robertson unveiled the plan – worth $12.1 billion – the NZX-50 index was up nearly 1 per cent after initially plunging 5 per cent.

Jeremy Sullivan, an investment analyst with Hamilton, Hindin, Greene, said the New Zealand market started to recover ‘‘bang on’’ the opening of the Australian sharemarket, which leapt more than 1 per cent, and it continued to improve ahead of the New Zealand government announcement at 2pm.

Relief from the government across the Tasman had enticed bargain hunters back into the attractive Australian banking sector.

By 2.45 pm, the top-50 was up 0.83 per cent, or 79 points, at 9555.97. Investors had expected the package to be substantial, Sullivan said, and they weren’t disappointed.

A $5.1b wage subsidy to keep Kiwis in work was at the centre of economic response to the coronavirus pandemic. The Government will also pay people to stay home from work and selfisolate if needed – including contractors – and pump $500m into the health system.

Fisher & Paykel Healthcare was one of the top gainers, up 8 per cent at $27.27 after favourable exchange rates raised its net profit and revenue forecasts.

ASB economist

Earlier, ASB economist Mark Smith said New Zealand was one of the few OECD countries that had the luxury of a sound government balance sheet to cushion the blow of Covid-19.

But ‘‘even this looks insufficient to prevent what looks to be a deep recession in New Zealand over 2020’’, he said.

Many stocks that came in for a beating earlier in the day, particularly transport or travelrelated companies, recovered.

Napier Port Holdings rose 3.3 per cent to $2.79 despite canning its cruise ship season early, and noting that an otherwise strong first half could be affected by a drop in log exports.

Mainfreight was up 2.95 per cent at $30.37 despite assuring the market that it was tracking ahead of last year.

However, corporate tourism software company Serko remained negative, losing 20 per cent of its value to $2.05.

Retailer The Warehouse slid 0.9 per cent to $2.01 after posting a 20 per cent fall in its interim profit.

Film software company Vista Group dropped nearly 15 per cent to $1.49 after canning its final dividend, citing uncertainty around cinemas and public gatherings.

Sky TV was down 1.6 per cent at 30c after being hammered by investors over the suspension of Super Rugby and disruption to other sports events.

Telco Spark was up 1.45 per cent to $4.21 after it announced it would make what sports content is still left on its Spark Sport platform free to view until May.

‘‘Even this looks insufficient to prevent what looks to be a deep recession in New Zealand over 2020’’.

Mark Smith