US-China fears reverse early gains
Local market takes a lead from the unease shown on Asian exchanges
New Zealand shares reversed an earlier gain as Asian markets were sold off amid growing fears of a confrontation between the United States and China.
The S&P/NZX 50 index fell 192.50 points, or 1.7 per cent, to 10,856.69. Within the index, 34 stocks fell, 13 rose, and three remained unchanged. Turnover was $206.9 million.
Investor unease regarding geopolitical tension caused Asian markets to fall, cutting short an early rise on the local benchmark. The NZX50 was trading up 0.3 per cent until midday when markets across Asia started to open weaker.
Sky Network Television led the New Zealand market lower, dropping 15.6 per cent to 14.6c with an unusually large volume of 17.2 million shares changing hands. The pay-TV operator is in the process of raising $37.8 million at 12c a share from retail investors as part of a $157 million capital raising.
“I imagine there are a few investors selling so they can take up their rights at 12 cents,” said Grant Davies, an investment adviser at Hamilton Hindin Greene.
“There could be a few underwriters getting a bit nervous if this negative momentum continues.”
Seafood company Sanford fell 7.9 per cent to $6.80 after it reported icy conditions off the coast of Antarctica
had caused an 8 per cent drop in wild catch sales volumes. This contributed to a $5 million hit to half-year earnings and prompted the board to lower the dividend to 5c a share from 9c a year earlier.
Goodman Property Trust fell 4.4 per cent to $2.20 after its annual result failed to meet the expectations of investors who had priced the stock for perfection, Davies said.
“It has been a solid performer throughout the whole pandemic lockdown, defying gravity to an extent, so while the result was pretty good there is still a little bit of selling.”
The company still forecasts earnings in line with the prior year but the payout to investors will be reduced due to a lower distribution policy and more shares on the register.
Fisher & Paykel Healthcare declined 4.4 per cent to $29.45, falling in tandem with its Australian rival ResMed.
Davies said the stocks that were being sold off on the day were generally companies that had held up well throughout the pandemic and lockdown. Chorus fell 4.3 per cent to $7.20, Infratil slipped 2.6 per cent to $4.82,
Contact Energy decreased 2.5 per cent to $6.25 and Spark New Zealand was down 1.3 per cent at $4.43.
Synlait Milk dropped 1.8 per cent to $7.12 after it lowered its forecast milk payout for the season due to weaker dairy prices and the Covid19 outbreak threatening demand. Dairy prices have fallen by around 14 per cent since the first Global Dairy Trade auction this year.
A2 Milk fell 1.8 per cent to $18.60, while Fonterra Shareholder Fund units increased 0.6 per cent to $3.63.
Restaurant Brands slipped 0.8 per cent to $12.90. The group told investors the national shutdown had cost it $15 million in lost earnings and would result in a profit downgrade in the current financial year.
Tourism Holdings posted the day’s biggest gain, rising 11.6 per cent to $1.73 on the likelihood of the transtasman bubble being open by July.
Outside the NZX50, honey producer Comvita announced a $50 million capital raise at $2.50 a share, a 34.4 per cent discount from $3.81 traded at market close on Wednesday. The company is benefiting from a surge in demand for natural health products.
Probiotic products company Blis Technologies is also riding the health wave, booking a net profit of $1.6 million, a 320 per cent rise from the prior year. Its share price rose 2.3 per cent to 8.8c.