Market commentary
WELLINGTON: After the heady rises in individual stocks and the leading index last year, the New Zealand sharemarket has moved into a correction trend with another drop of more than 1%.
The market had its sixth successive day of falls and some leading stocks, such as Fisher & Paykel Healthcare and the energy companies, are having big price swings, one minute sitting high on the gainers board and then just as quickly disappearing.
The S&P/NZX50 Index fell 186.33 points, or 1.43%, to 12,838.36 after reaching an intraday high of 13,114.50. There were 43 gainers and a dominating 104 decliners over the whole market on volume of 60.3 million share transactions, worth $125 million.
Fat Prophets head of research Greg Smith said a correction did appear to be under way to a certain extent — the negative sessions were now stacking up.
‘‘Perhaps optimism has been replaced by a dose of realism. The world still has coronavirus, the vaccine will take time to roll out, and it looks like our border — and the tourism sector — won’t open up to more visitors and countries as quickly as we may have thought.
‘‘Maybe the hot air has come out of the markets both here and overseas — some are saying US equities are the most overvalued since before the 1929 crash,’’ Mr Smith said.
‘‘A crash here is highly unlikely — we had one last year — and equities remain appealing for dividend yields compared with what you get from bonds or cash in the bank.’’
Mr Smith said the market was in a waiting mood before the latest financial reporting season; the United States is imminent and New Zealand’s is next month.
Fisher & Paykel Healthcare went from an intraday high of $32.99 in the early morning trade to $31.42 at the close, falling 22c on trade worth $16.9 million.
Auckland International Airport was also heavily traded, shedding 23.5c, or 3.10%, to $7.335 on trade worth $17.7 million. Ebos Group was down 41c to $28.50; a2 Milk declined 26c, or 2.36%, to $10.75; Serko fell 19c, or 3.31%, to $5.55; and Spark was down 9c, or 1.86%, to $4.75.
Port of Tauranga fell 21c, or 2.73%, to $7.49, while Napier Port gained 8c, or 2.41%, to $3.40. Pacific Edge continued to fall after its recent strong run, down 7c, or 6.19%, to $1.06. Tourism Holdings was down another 8c, or 3.39%, to $2.28.
The energy stocks continued to run out of puff after their frenetic rises. Contact was down 37c, or 3.87%, to $9.18; Meridian fell 43c, or 5.46%, to $7.44; Mercury slipped 2c to $6.90; and Genesis decreased 10c, or 2.7%, to $3.60.
Ryman Healthcare, which has been having a rollercoaster ride, climbed 20c to $14.75; rival Summerset Group Holdings increased 9c to $12.04; Freightways gained 15c to $10.40; Infratil moved ahead 9c to $7.25; and Restaurant Brands — another upanddown stock — rose 38c, or 3.39%, to $11.58.
Kiwifruit grower and packer Seeka continues to find favour, rising 10c, or 2.12%, to $4.81 after sitting at $3.95 on December 4.
Electronics manufacturer Rakon rose 3c, or 3.95%, to 79c after increasing its operating earnings forecast by $4 million. Rakon said the rollout of 5G networks globally had resulted in greater demand for its products.
Vista Group International has appointed NZX chairman James Miller as an independent director, and its share price slipped 1c to $1.53. Mr Miller is also a director of ACC, Mercury NZ and Refining NZ.
Blackwell Global Holdings is winding down its finance company operations after failing to raise sufficient capital to fund the growth of its loan book. Blackwell is now looking at a reverse takeover, and its share price sits at 0.008c, down 0.001c, or 11.11%. —