More green among the red in ‘hesitant’ trading

The share market had a better day yesterday with the property and banking stocks lifting but it was not enough to stop the index dipping into the red.

The Warehouse Group gave a last minute trading update that its sales were down over the five-month trading period to January 2 compared to the prior year.

The benchmark S&P/NZX 50 closed down 0.10 per cent or 12.357 points on 12970.65 on light trading. There were 72 gainers while 60 stocks declined across the main market with total value traded at $113.997 million with volume of 24,976,637.

Harbour Asset Management portfolio manager Shane Solly said it was a better day with more green but the market was still a bit hesitant. “The volumes are quite light again and we are seeing still some big swings intraday in stocks and even in vanilla stocks like Meridian have moved almost 1.5 per cent-type moves all through the day.

“It will be interesting to see what happens next week when a few more people start coming back to the market.”

Solly said there was a more measured response from the US with comments from some of the US Federal Reserve governors talking down moves to increase the interest rate rapidly which had sent the market down in the previous day’s trading.

In China there had been a default in a Chinese property trust Shimao. The difference between that and developer Evergrande was that bondholders in Evergrande were predominantly international investors while Shimao was largely domestic Chinese investors. “Having said all that the Chinese market has been relatively flat,” Solly said. “This is in line with the intent of the [Chinese] government to see the heat come out of the property sector.”

Solly said in the New Zealand market AFT Pharmaceuticals had come out with an update confirming its profit guidance that was positive pushing its shares up 1.12 per cent or 5c to close on $4.51.

“There had been some concerns about whether they were able to make that.”

Retail giant The Warehouse Group said for the five months to January 2 that its group sales were down 5.7 per cent or $88.8m to $1.4659 billion compared to the same period in FY21. Its gross profit margin was also down 55 basis points on last year but was up 132 basis points on FY20.

Based on actual sales for the first five months The Warehouse Group said it expects adjusted net profit after tax for the first half of FY22 to exceed $40m — this compared to $111m in its 2021 half year and $46.2m in its 2020 half year. Shares in the company closed down 1.47 per cent or 6c on $4.01.