Tegel, Sky lead the upswing
Air NZ performs poorly as passenger revenue goes into a slump
New Zealand shares gained, led by Tegel Group Holdings, Sky Network Television, while Air New Zealand dropped back amid analyst downgrades.
The S&P/NZX50 Index rose 22.4 points, or 0.3 per cent yesterday, to 7113.32. Within the index, 27 stocks rose, 11 fell and 12 were unchanged. Turnover was $105 million.
Tegel led the index, up 3 per cent to $1.38, after gaining 3.1 per cent on Wednesday. The shares hit a record low of $1.29 in mid-December after the company said it would miss its forecast earnings as a chicken glut keeps a lid on domestic prices and rising freight costs squeezes margins. Shares recovered as last year ended, but weakened again this month. The poultry firm listed on the NZX in May 2016 at $1.55.
Sky Network Television rose 1.8 per cent to $4.62, Restaurant Brands New Zealand gained 1.5 per cent to $5.47 and Spark New Zealand advanced 1.4 per cent to $3.535.
Yesterday, Statistics New Zealand said the consumers price index rose 0.4 per cent in the three months ended December 31 for an annual pace of 1.3 per cent, the fastest annual pace since June 2014 and the first time headline inflation has been within the Reserve Bank’s target band of 1-3 per cent in two years. Economists had been picking quarterly inflation of 0.2 per cent for an annual pace of 1.2 per cent.
“There’s probably a bit of volatility to come with where interest rates are headed. Given on our weighting to yield stocks on our market, that’s where all eyes will be,” Robert Garden investment adviser at Craigs Investment Partners, said. “The i nflation numbers were marginally ahead of most expectations. We’ll look forward to the next Reserve Bank announcement. Some of the yield stocks sold off prior to Christmas are making a bit of a comeback, so I think the focus will be in that area.”
Air New Zealand was the worst performer, down 3.6 per cent to $2.12. On Wednesday, the airline said passenger revenue in the first six months of the company’s financial year has fallen sharply. Short-haul passenger revenue through its preferred metric fell 6.3 per cent in the six months to December, while long-haul passenger revenue slumped 14.3 per cent.
Craigs Investment Partners analysts have downgraded the share price target for Air New Zealand to $2.09 from $2.17 and warned its earnings before tax are likely to come in at the lower end of expectations.
Vector dropped 2.1 per cent to $3.20 while Investore Property declined 1.4 per cent to $1.38.
Comvita dropped back 1.4 per cent to $7.20. The manuka honey products maker’s shares led the index on Wednesday, recovering after plunging 17 per cent from $7.83 on Monday when it warned annual earnings will tumble by about two-thirds as wet and windy weather saps the honey harvest.