Market commentary
AUCKLAND: New Zealand shares bounced back from some of yesterday’s selloff as investors were yet to see serious contagion from Turkey’s burgeoning financial crisis, led higher by Synlait Milk and A2 Milk Co. Summerset Group Holdings fell after reporting firsthalf earnings.
The S&P/NZX 50 index rose 26.9 points, or 0.3%, to 8971.94. Within the index, 22 stocks gained, 20 fell and eight were unchanged. Turnover was $137 million.
Stocks across Asia were mixed as investors digest the impact of Turkey’s economic woes, where a plunging lira increases the burden of foreign indebtedness which has funded the Middle Eastern nation’s rapid growth in recent years. Japan’s Topix was up 1.3% in afternoon trading, while Hong Kong’s Hang Seng fell 0.9%.
Matt Goodson, managing director at Salt Funds Management, said Turkey’s large foreign currency debt was a ‘‘very significant problem’’ and investors were wondering whether the Government would impose capital controls. That uncertainty was causing ructions in other emerging markets and weighing on risksensitive assets, such as the kiwi, which hit a twoandahalfyear low this week.
Exporters were among yesterday’s leaders, with A2 up 3.6% to $11.16 and its key supplier Synlait Milk leading the benchmark higher, up 3.9% to $10.80. Fisher & Paykel Healthcare rose 1.7% to $14.79.
Still, Mr Goodson said a weaker currency was not oneway and given the New Zealand market’s popularity with overseas investors in recent years, a depreciation in the kiwi for unhedged investors would cause ‘‘a fair degree of pain’’.
Earnings season remained the focal point for domestic investors, with Summerset the first major retirement village operator and developer to report. The Wellingtonbased company lifted underlying earnings 27% and declared an increased dividend, although the net profit fell 9% as the slowing housing market produced smaller property revaluation gains. The shares fell 0.8% to $7.66.
Fonterra Shareholders’ Fund units posted the biggest fall, down 3.2% to $4.80, a new threeyear low. Fonterra Cooperative Group lowered its farmgate payout for the 2018 season and said it probably would not pay a final dividend this year as it retained cash to bolster its balance sheet.
Freightways fell 1.9% to $7.60 after yesterday reporting a small increase in annual profit, while Heartland Bank declined 1.7% to $1.74 before reporting its earnings today. NZX, which also reports today, was unchanged at $1.09.
Spark New Zealand rose 0.7% to $3.85 after securing broadcasting rights to the English Premier League and Manchester United TV.
Among bluechip stocks, Fletcher Building gained 0.4% to $6.83, Mainfreight dipped 0.1% to $27.81, Air New Zealand declined 0.2% to $3.325, Kiwi Property Group fell 0.7% to $1.36, Meridian Energy fell 1.3% to $3.125 and Auckland International Airport dropped 1.9% to $6.74.
Outside the benchmark index, PGG Wrightson was unchanged at 67c after reporting a record profit, while lowering its dividend to reinvest earnings back into the business.
Rubicon gained 3.6% to 29c after founding chief executive Luke Moriarty and chief financial officer Mark Taylor said they would leave the biotech company this financial year.
Pacific Edge rose 1.6% to 31c after saying the Counties Manukau district health board would start using its Cxbladder cancer detection device from next month. — BusinessDesk