Market commentaries
AUCKLAND: New Zealand shares fell for a seventh day. Rising US bond yields kept a lid on equity markets across Asia, weighing on growth-orientated stocks such as a2 Milk Co and Pushpay Holdings.
The S&P/NZX 50 index dropped 77.12 points, or 0.8%, to 9069.98. Within the index, 32 stocks fell, 13 gained and five were unchanged. Turnover was $104.6 million.
New Zealand’s benchmark index has dropped 3% during the past seven sessions as rising US bond yields inject new volatility into financial markets. The yield on US 10year Treasuries has climbed to 3.24% on growing expectations the Federal Reserve will keep raising interest rates, reducing the attraction of equities.
Greg Smith, head of research at Fat Prophets, said investors are readjusting to higher interest rates, which is putting pressure on stocks that have been trading at high valuations.
‘‘In a rising interest rate environment, equities still win the beauty parade, but cash is becoming more attractive than it has been,’’ he said. ‘‘New Zealand is still one of the higheryielding markets around.’’
A2, which trades at a pricetoearnings multiple of 39.5 times, fell 3.7% to $10.20. Pushpay, which is chasing global growth at the expense of shortterm earnings, declined 3.3% to $3.81.
Restaurant Brands New Zealand led the market lower, down 3.8% to $7.53.
Mr Smith said the rising US interest rate track is also boosting the greenback, which benefits exporters who can sell more of their product with a weaker currency. The kiwi has dropped almost 9% this year, closing at US64.54c.
Air New Zealand, which benefits from increased tourism numbers, rose 1.4% to $2.965, the biggest gain on the day. Auckland International Airport increased 0.2% to $7.28.
Sky Network Television, which has to pay more for overseas broadcasting rights when the kiwi dollar is weak, fell 2.8% to $2.08.
Synlait Milk declined 1.9% to $9.89. Director John Penno has reduced his stake in the milk processor since resigning from the chief executive role. A notice yesterday showed he sold about 1 million shares at an average price of $10.80 last week. He still owns 5.1 million shares.
Z Energy rose 0.1% to $7. Chief executive Mike Bennetts hit back at Prime Minister Jacinda Ardern’s claim petrol companies were fleecing their customers, saying her attack was out of line with Z Energy’s experience.
Infratil increased 0.1% to $3.535 and Mercury NZ gained 0.3% to $3.31 after they extended their takeover bid for Tilt Renewables without raising their $2.30 per share offer. Tilt slipped 0.9% to $2.28.
Chorus fell 1% to $4.85 after hiring consultancy Martin Jenkins to review the employment practices of its subcontractors. The Labour Inspectorate found widespread breaches in the first phase of an inquiry into cabling companies.
Mr Smith said the stock has been trading near record levels as investors focus on the strong outlook for broadband uptake. Spark New Zealand was unchanged at $3.97.
Among bluechip stocks, Meridian Energy increased 0.5% to $3.23, Fletcher Building gained 0.2% to $6.30, Ryman Healthcare decreased 0.4% to $13.16 and Mainfreight declined 0.9% to $29.25.
Outside the benchmark index, Abano Healthcare slipped 1.5% to $8.47 after the company said annual earnings will get squeezed as increased investment is coinciding with weaker trading activity in Australia.
A It was another bad day for the Australian sharemarket as healthcare and other international stocks kept the market down, and the ASX lagged just above 6000 percentage points at the close.
The benchmark S&P/ASX200 index was down 59.2 points, or 0.97%, at 6041.1, while the broader All Ordinaries was down 63.1 points, or 1.01%, at 66115.5
The SPI200 futures index was down 52 points, or 0.86%, at 6025, while the Aussie dollar was buying US70.86c as it lingers around multiyear lows but up 0.12% from Monday.