Z leads fall as investors remain wary
‘Worry meter pretty high’ in midst of uncertainty abroad
New Zealand shares fell with local earnings insufficient to embolden investors wary about the outlook for the global economy. Z Energy again led the market lower.
The S&P/NZX 50 index fell 56.82 points, or 0.6 per cent, to 8778.78. Within the index, 22 stocks fell, 20 gained and eight were static. Turnover was modest at $84.4 million.
Asian markets were generally down in early trading, following a weaker close in the US on Friday. Stocks there gave up some of their gains amid mixed signals from the White House on the prospects of a trade deal with China and a disappointing outlook from Apple.
Peter McIntyre, an investment adviser with Craigs Investment Partners, said the local market is being driven by offshore events.
While there is reasonably good local news flow this week, particularly with the Reserve Bank’s monetary policy statement on Thursday, the end of the earnings season in the US has left investors more focused on political risks — particularly the Midterm elections in the US Tuesday.
“The worry meter is pretty high at the moment,” McIntyre said.
Z Energy extended its decline for a third day after the company tried to clarify its dividend position for the remainder of the 2019 financial year.
The country’s biggest fuel retailer was again the heaviest traded stock among the majors with 3.1 million shares changing hands — down from Friday but more than three times the daily average the past three months.
The stock fell 5.1 per cent to $5.20, its lowest close since May 2015. Z rattled investors on Thursday with a 21 per cent drop in first-half earnings and a dividend about 5c less than expected. The $120 million in cash tax Z yesterday said it expects is a stark contrast to the $80m some analysts had been forecasting, McIntyre said.
Volumes among the other majors were light. A2 Milk fell 5.1 per cent to $10.15 with fewer than 600,000 shares traded — half the usual volume. Spark NZ rose 2.3 per cent to $3.98 with less than 980,000 shares — almost a third of the average daily volume the past three months.
Westpac Banking rose 1.5 per cent to $29.04. Its A$8.07 billion full-year profit reported yesterday was little changed from a year ago. The local unit’s earnings rose 5 per cent to $1b.
McIntyre said the Australian bank stocks have been reasonably “beaten up” and some investors may now be looking again at them. AMP rose 5.3 per cent to $2.98
Trustpower rose 0.5 per cent to $6.21 after announcing a 25c special dividend and signalling it may pay a special dividend early next year.
The company said it is expecting improved telecom customer sign-ups in the second-half after discovering customers find offers of appliances more appealing than free data.
McIntyre said the firm’s full-year guidance update a few weeks ago has probably taken away a little from the company’s generally positive news. Air New Zealand rose 1.5 per cent to $2.98. Tourism Holdings rose 2.2 percent to $5.11.
Orion Health Group rose 2.7 per cent to $1.14. The technology firm raised the likely price range for its planned buyback to $1.20 to $1.25 from $1.16 to $1.26, after completion of the sale of its Rhapsody unit to UK private equity firm Hg for $205m.
New Zealand Oil & Gas rose 3.2 per cent to 65c. Subsidiary Cue Energy has reported elevated gas readings in the firm’s Paus Biru-1 well in the Sampang licence in Indonesia.
Property for Industry fell 0.6 per cent to $1.72. It raised its third-quarter dividend to 1.85c, from 1.8c in the second quarter.