Market commentary
AUCKLAND: The latest Auckland lockdown put a dampener on the New Zealand sharemarket and those stocks most affected by the Covid pandemic as the leading index fell another half per cent and moved closer to a real correction.
The S&P/NZX 50 Index was down 79.08 points, or 0.63% to 12,510.56, after reaching an intraday low of 12,469.12. With only one gain in 10 trading days this month, the index has fallen nearly 8% from its all time high of 13,558.19 on January 8.
A market correction is more than 10% and a bear market is called with a fall of more than 20%.
There were 57 gainers and 79 decliners over the whole market, on light volume of 46.76 million shares worth $115.20 million.
Investment adviser with Forsyth Barr, Dan Stratful said the latest market fall was unsurprising, given the Auckland threeday lockdown and it may be longer.
‘‘The market has been on a slide lately driven by the energy companies and it's getting close to a correction.’’
Covidrelated stocks hoping for an improvement in their prices, with a vaccine just around the corner, had their hopes dashed following the outbreak of three new community cases.
Retailers, enjoying a good run with improved trading and earnings, went down with them.
Auckland International Airport was down 11c to $6.79, business travel provider Serko fell 13c to $5.37, Vista Group decreased 3c to $1.45 and SkyCity Entertainment, which closed its Auckland casino, declined 3c to $2.94.
Retailer Briscoe Group fell 8c to $5.62, Hallenstein Glasson was down 6c to $7.60 and The Warehouse Group lost 4c to $3.26. Fast food operator Restaurant Brands fell 8c to $12.12.
Contact Energy opened the latest reporting season by striking a 32% or $19 million increase in net profit to $78 million for the six months ending December, on steady revenue of $1.14 billion, compared with the previous corresponding period. Contact's operating earnings (ebitdaf) rose 11% to $246 million and it is paying an interim dividend of 14c a share on March 30.
Contact went into a trading halt, probably until tomorrow’s market opening, after announcing a $400 million equity capital raising at $7 a share, to help fund the new 152MW geothermal power station at Tauhara, near Taupo. Contact's price remained at $7.20.
Mr Stratful said the equity raising surprised the market.
‘‘We knew they were going to build a geothermal station but whether they would do it with debt or equity was unclear. Now we know. Contact could have made a debt placement or bond offer.’’
Meridian fell 14c to $5.67, Mercury declined 37c to $6.43, Genesis was down 10.5c to $3.70 and Trustpower shed 30c to $8.35.
Fletcher Building, which is expect to report a solid result tomorrow, increased 10c to $6.444, Ryman Healthcare climbed 15c to $14.80 and Freightways gained 9c to $11.04. New listing Third Age Health Services rose 7c to $2.22, and NZME was up 2c to 87c.
Summerset Group Holdings fell 21c to $12.76, Ebos Group decreased 15c to $29.55, a2 Milk slipped 11c to $10.55, Synlait shed 9c to $4.28 and Port of Tauranga was down 6c to $7.22. Sanford fell 15c to $4.51, and Comvita fell 9c to $3.20.
Kiwifruit grower and packer Seeka was part of the class action against the Crown in relation to the 2010 PSA outbreak. The plaintiffs were awarded $40 million, and Seeka’s share price gained 2c to $4.74. — The New Zealand Herald