Market commentaries
WELLINGTON: New Zealand shares fell, joining a selloff across Asia, as investors fret over the future track of US interest rates ahead of this week’s Federal Reserve policy review. Heartland Group sank on concerns over stricter banking capital requirements.
The S&P/NZX 50 index dropped 57.22 points, or 0.7%, to 8688.37. Within the index 29 stocks fell, 14 gained and seven were unchanged. Turnover was $160.1 million.
Stocks across Asia fell ahead of this week’s Federal Reserve policy review, Singapore’s FTSE Straits Times index down 1.8% in afternoon trading and Australia’s S&P/ASX falling 1%. The Fed is expected to raise the federal funds rate a quarter point but investors are weighing up whether the track for future increases will be pared back. The prospect of rising interest rates has dimmed the lustre of equities globally.
‘‘If you’re punching into an analyst’s model with regards to valuation, interest rates are quite key,’’ said Peter McIntyre, investment adviser at Craigs Investment Partners. ‘‘The market’s a little bit on edge.’’
Heartland led the market lower, falling 6.9% to $1.35, its lowest close since August 2016. The local lender has dropped 11% since the Reserve Bank unveiled plans that would require a significant increase in the capital held by banks. Macquarie analysts estimate Heartland would need to boost its capital holdings by about $1 billion.
Duallisted Australia & New Zealand Banking Group fell 3% to $25 and Westpac Banking Corp was down 1.7% at $25.55. Mr McIntyre said the proposals had injected uncertainty into banking stocks.
‘‘Heartland’s down nearly 7%, and that’s just a reaction to them having to hold greater amounts of capital. There’s been a whole lot of theories running around in the markets at the moment about whether the Australian parents sell off their New Zealand cousins.’’
Synlait Milk sank 5.9% to $8.35 and Kathmandu Holdings dropped 4.3% to $2.65.
A2 Milk fell 2.1% to $10.72 in modest trading. Spark New Zealand was the most traded stock with almost 6 million shares changing hands, compared to its 90day average of 3 million. The shares decreased 0.7% to $4.17 after the company noted Australia’s Telstra will join the Southern Cross Cable Network as a customer and shareholder.
Trade Me was unchanged at $6.32 on a volume of 4.7 million and Meridian Energy slipped 0.2% to $3.42 on 3.8 million shares traded.
Of the other companies traded on volumes of more than 1 million shares, SkyCity Entertainment Group fell 3.1% to $3.43, Auckland International Airport was up 0.8% at $7 and Z Energy rose 0.8% to $5.75.
Fletcher Building rose 2.1% to $4.93 in heavier trading of 3.4 million shares. The construction company yesterday announced the sale of its Formica unit for $US840 million, in line with analysts’ expectations, and said it would resume paying dividends.
Mercury NZ rose 2% to $3.60 and Genesis Energy was up 1.2% at $2.56 in relatively light trading. Sky Network Television increased 1% to $1.99 on a small volume.
Air New Zealand edged up 0.2% to $3.095 after reporting strong domestic and transtasman passenger numbers in November, although its longhaul factor was weaker.
Kiwi Property Group fell 3.3% to $1.34 on almost half its average trading volume. Anchor tenant Bell Gully will move from its Vero Centre in Auckland between 2023 and 2025 taking a lease at Precinct Properties New Zealand’s One Queen Street building at Commercial Bay. Precinct shares were unchanged at $1.43.
Outside the benchmark index, PGG Wrightson rose 4% to 52c. After the close of trading, the rural services firm said difficult trading conditions in South America were affecting its seed and grain division.
Losses across the board dragged the Australian sharemarket lower yesterday, with energy stocks weighing the heaviest amid looming interest rate hikes in the US and tumbling oil prices.
The benchmark S&P/ASX200 index was down 68.8 points, or 1.22%, at 5589.5 while the broader All Ordinaries lost 1.24%. — BusinessDesk/AAP