Market commentaries
WELLINGTON: New Zealand shares fell yesterday, led lower by a2 Milk Co and Sky Network Television, while Kathmandu Holdings hit a four and ahalfyear high.
The S&P/NZX 50 Index dropped 15.92 points to 8985.47. Within the index, 22 stocks fell, 17 rose and 11 were unchanged. Turnover was $89.2 million.
The worst performer was a2 Milk, down 3.5% to $11.36. It lifted annual sales 68%, just beating the guidance given in May, and said it expected to maintain an earnings margin of about 30% in the coming year, even with increased spending.
‘‘The margins that they are guiding to are just a fraction below where the market is expecting, as they add more cost into the business in seeking to grow through motherandbaby store chains in China, which is a lot more costintensive than selling through daigou, and global liquid milk market in America,’’ Salt Funds Management managing director Matt Goodson said.
‘‘The second aspect is the quantum of revenue growth in 2019 that they’re guiding to wasn’t clear. So the market has just taken a little bit of risk off the table on that.’’
Mr Goodson said the weakness of the Australian and New Zealand dollars against the greenback had lent support to exporters across the region. On the other hand, stocks with a large USdollar cost base had weakened. Sky TV was down 3.3% to $2.61 yesterday and Air New Zealand dipped 0.2% to $3.175.
The best performer was Kathmandu Holdings, up 3.8% to $3.02, the highest it has closed since December 2014. The stock has risen 20% this year and much of those gains have come since June 25, when it said it expected to increase profit by up to 37% this year.
The duallisted banks gained. Westpac Banking Corp rose 2.2% to $32.60 and Australia and New Zealand Banking Group was up 2.1% to $31.72.
Chorus rose 1.9% to $4.37 and Skellerup Holdings advanced 1.6% to $1.95.
Strong showings from healthcare heavyweights and the major banks propelled the Australian sharemarket to its highest close for a decade after a nutty day of trading yesterday.
The benchmark S&P/ASX200 closed up 52.7 points, or 0.85%, at 6268.3 points the highest close since December 2007, while the broader All Ordinaries index gained 49.6 points to 6349.8.
The big four banks alone boosted the benchmark more than 22 points, while vaccines and blood products supplier CSL injected over seven points into the index. CMC Markets chief market strategist Michael McCarthy said it had been a surprisingly good day for Australian investors and trading was up about 10% on average volumes. ‘‘It’s just nuts, it really is,’’ he said.
‘‘It’s difficult to pin it to any particular piece of news. I haven’t really seen anything that justifies this huge Uturn that we’re seeing in sentiment.’’
The healthcare sector was the star performer, with CSL breaking the $200 mark for the first time, closing up 2.6% at $A200.60.
ANZ led the big banks’ rally, soaring 2.2% to $29.20, followed by NAB, up 1.8% to $28.15, while Westpac gained 1.6% to $29.76 and Commonwealth Bank rose 1.6% to $75.21.
Energy stocks were the biggest loser after global benchmark Brent crude oil had its largest oneday drop in two years.
Origin Energy fell 3.1% to $9.43, energy giant Woodside Petroleum slumped 0.9% to $35.82 and Santos declined 0.3% to $6.21. — BusinessDesk/AAP