Otago Daily Times

Market commentary

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WELLINGTON: Briscoe Group, Freightway­s, Tilt Renewables and Trustpower, operating in fashionabl­e sectors, all raced to new highs, but the volatile heavy hitters again dragged the New Zealand sharemarke­t down by nearly 1%.

The S&P/NZX 50 Index continued to slide as the day wore on, closing down 126.18 points, or 0.97%, at 12,927.69, on reasonable volume. A total of 58.3 million shares worth $178.33 million were traded, with 68 gainers and 74 decliners over the whole market.

Investment adviser with Hamilton Hindin Greene, Jeremy Sullivan said there were positive announceme­nts from Briscoe and Precinct Properties but that was not enough as the blue chip stocks led the market down.

‘‘It’s not long to go before the major companies start reporting and the market has been in a holding pattern till then,’’ he said.

Contact Energy is the first to report its latest financial result on Monday, followed by Ebos Group, Fletcher Building and NZX next Wednesday.

Mr Sullivan said the Reserve Bank move to tighten loantovalu­e (LVR) ratios for buying houses would not unduly worry the market, though it might flow into the retirement village sector if property investment activity was curtailed. On the other hand, the tougher LVRs do not affect new houses and this can benefit Fletcher Building.

The heavy hitters taking a fall were Fisher and Paykel Healthcare, down 93c to $32.57 on trade worth $26 million, Meridian declining 15.5c to $6.835, Contact Energy decreasing 15c to $8 and Mercury losing 23c to $6.92.

Auckland Internatio­nal Airport shed 9c to $7.10, Ryman Healthcare retreated 30c $15.55 and Spark was down 8c to $4.67, on trade worth $18.9 million.

Courier and informatio­n management company Freightway­s swept past its previous high of $11 (achieved on January 29), surging 45c to $11.20.

Briscoe Group reached $5.91 during the day before settling at a record high of $5.70, up 10c for the day, after reporting record sales and profit. The retailer passed its previous high of $5.60 achieved last Friday, and it has climbed consistent­ly from its low of $2.46 on March 24 last year, supported by strong consumer spending.

Briscoe’s total sales for the 53 weeks ending January increased 7.47% to $701.8 million, compared with $653 million for the previous correspond­ing period (which had 52 weeks). Net profit for the full year will be at least $70 million. Briscoe’s fourthquar­ter sales including the Christmas trading period, climbed 18.3% to $248.1 million.

Tilt Renewables climbed 35c to $6.90 and Trustpower gained 7c to $8.97, eclipsing their previous highs of $6.55 and $8.90 establishe­d at the end of last week. Both stocks operate in the highly favoured renewable energy sector and are both the subject of possible merger and acquisitio­n activity.

Precinct Properties New Zealand rose 4.5c to $1.725 after reporting a 5.1% or $149 million revaluatio­n gain on its $3 billion property portfolio for the halfyear ending December. Precinct is also selling its 50% interest in the Auckland ANZ Centre for $177 million and its financial gearing is close to 26%.

Sky Network Television continued its resurgence, gaining a further 0.005c to 18.8c, after reaching a low of 10.1c on March 23 last year. Gentrack gained 6c to $1.50, Metro Performanc­e Glass climbed 2.5c to 44.5c and The Colonial Motor Company rose 24c to $9.05.

Air New Zealand slipped 0.005c to $1.625 after coming under pressure for confirming one of its business units, Gas Turbines, has been supporting the Royal Saudi Navy through a works contract. —

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