Shares fall for fifth day amid trade fears
Export-focused Tourism Holdings and Pushpay among stocks under pressure
New Zealand shares fell for a fifth day as investors remain wary of the effect a trade war will have on company earnings, with export-focused stocks Tourism Holdings and Pushpay still under pressure. Fletcher Building slid ahead of today’s annual meeting.
The S&P/NZX 50 index fell 16.77 points, or 0.2 per cent, to 8792.93. Within the index, 28 stocks fell, 19 gained and three were unchanged. Turnover was a modest $80.3 million.
New Zealand’s benchmark index followed Australia lower as comments by US Vice-President Mike Pence at the Apec leaders’ meeting at the weekend kept investors nervous about the protracted trade dispute between the US and China.
The world’s two biggest economies have been at odds over the past 18 months, and investors fear a slowdown will undermine earnings. Australia’s S&P/ASX 200 index was down 0.6 per cent in th afternoon.
Shane Solly, a portfolio manager at Harbour Asset Management, said New Zealand’s market held up well, with the local economy still in reasonably good health. That means companies need to meet or beat earnings expectations to maintain their current pricing. The NZX’s average historic price-to-earnings is 17 times.
“There’s a little bit of volatility at a high level and companies reporting here which is taking people’s attention,” Solly said. “At an overarching level investors are still pretty wary about slowing activity and extended tariff discussion.”
Tourism Holdings led the market lower on smaller than usual volumes, falling 3.4 per cent to $4.82, the lowest close in 12 months. Pushpay dropped 3.1 per cent to $3.15, the lowest close since November last year.
Solly said Tourism Holdings has been unwinding its gains as investors question the future of its US business, while Pushpay is still under pressure from its recent earnings report.
Fletcher Building fell 2.1 per cent to a seven-month low $5.55 on a third of the average trading. Today’s AGM will be the first for chief executive Ross Taylor and chair Bruce Hassall.
A2 Milk was the most traded stock with 1.4 million shares changing hands. It rose 3 per cent to $10.47 ahead of the annual meeting in Melbourne, and Solly said investors expect the milk marketer’s update to show double-digit revenue growth.
Among other companies with more than a million shares changing hands, Spark New Zealand fell 1.8 per cent to $4.125 and Goodman Property Trust held at $1.515.
Kiwi Property Group fell 1.1 per cent to $1.345 after reporting a small decline in first-half underlying earnings thanks to asset sales resulting in a smaller income stream. Investore
Property fell 0.7 per cent to $1.50 after distributable earnings rose. Outside the benchmark index,
Metro Performance Glass dived 24 per cent to a record low of 64c after acknowledging a new entrant to the local market was likely to emerge in the next 18 months.
Sanford fell 2.1 per cent to $7.05 after agreeing to sell its Tauranga-based fishing business for an undisclosed sum.