Market commentary

AUCKLAND: The New Zealand sharemarket is proving hard to please. Despite solid company results, the market has shrugged its shoulders and neared correction territory with its 13th drop in 16 trading days this month.

The S&P/NZX 50 Index was down 37.39 points or 0.3% to 12,388.84, just short of the 10% correction mark after hitting an alltime high of 13,558.19 on January 8.

There 55 gainers and 89 decliners over the whole market on heavy volume of 61.7 million share transactions worth $214.57 million.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said the market had neared a technical correction smack bang in the middle of the reporting season.

‘‘It's ironical. The reporting season has been holding up nicely and you can't blame the companies' performances. It doesn't warrant a 10% reduction in our index, but our market is more focused on rising interest rates.

‘‘The increase in the bond yields in United States have flown over here and our redhot housing market is increasingly becoming unsustainable — a clampdown on investors may result in a rise in interest rates next year. We also have the strength of the NZ dollar and overseas investors may be taking advantage of that and bringing their money back home,’’ Mr Sullivan said.

Mercury Energy and Vector both fell, even though they produced halfyear profit increases.

Vector was down 15c or 3.55% to $4.07 after reporting a 26.8% rise in profit of $102.13 million on revenue of $6478.675 million, down 7.4%, and it is paying an interim dividend of 8.25c on April 8. Vector increased its 2021 fullyear operating earnings guidance to $500 million$520 million, up from $480 million$500 million.

Mercury fell 23c or 3.61% to $6.15 after lowering its 2021 operating earnings forecast to $520 million, from $535 million because of the dry weather in the Taupo catchment and a decrease in hydro generation. Mercury's halfyear profit surged 56.6% to $130 million on revenue of $944 million, and it is paying an interim dividend of 6.8c a share on April 1.

Summerset Group Holdings, with 32 retirement villages and nearly 6000 units in New Zealand and Australia, gained 22c to $12.79 after its solid result for the year ending December. Revenue was up 12% to $172.42 million and net profit increased 32% to $230.8 million, though underlying profit slipped 7.4% to $98.3 million because of the cost of keeping its residents safe during the Covid pandemic. Summerset is paying an interim dividend of 7c a share on March 22.

The NZ dollar was down a touch to US73.17c against the American greenback.

Rural services firm PGG Wrightson rose 20c or 5.95% to $3.56. For the six months ending December, PGG's revenue was up 6.4% to $499.3 million, operating earnings (ebitda) rose 21% to $42.1 million, and profit surged 41.4% to $18 million. It is paying an interim dividend of 12 a share on March 24.

Sky Network Television fell 0.008c or 4.4% to 17.4c after strong profit growth for the six months ending December. Sky TV's profit surged from $11.9 million to $39.58 million on revenue of $356.87 million, a decrease of 7.3% on the previous corresponding period.

Fishing company Sanford has been fined $36,000 in the Christchurch District Court and had its vessel forfeited for bottom trawling in a benthic protected area. Its share price fell 21c or 4.66% to $4.30. —