Market commentary
WELLINGTON: There was plenty of action involving the New Zealand sharemarket, but in the end it fell 1%, weighed down by mixed company results, rising wholesale interest rates and a strong dollar.
The S&P/NZX 50 Index was down 122.39 points, or 0.98%, to 12,426.24 after reaching an intraday high of 12,588.38. There were 54 gainers and 90 decliners over the whole market on strong trading of 50.86 million shares worth $191.55 million.
The yield on the New Zealand 10Year Government Bond rose 13 basis points to 1.65%, and the New Zealand dollar strengthened during the day against the American greenback, trading in a range of US72.84c to US73.39, after S&P upgraded New Zealand’s credit rating.
‘‘With bond yields rising so sharply, it’s not a great surprise that the market has fallen,’’ Salt Funds Management managing director Matt Goodson said.
‘‘Chorus is one stock affected by this, and the utilities again had some sharp moves.’’
Chorus fell 28c, or 3.48%, to $7.77 after reporting a 2% drop in revenue to $473 million and a 23% decrease in profit to $24 million for the six months ending December. Operating earnings (ebitda) were $323 million compared with $332 million for the previous corresponding period.
Chorus increased its fibre connections by 62,000 to 813,000 and it is paying an interim dividend of 10.5c a share on April 13. But the market raised an eyebrow at Chorus’ capital expenditure forecast of $670 million to $700 million.
Freightways shed 23c, or 2.12%, to $10.63 despite producing a steady firsthalf result. Its revenue rose 29% to $410.3 million, net profit fell 25% to $21.96 million and it is paying an interim dividend of 15.5c a share on April 1.
Fisher & Paykel Healthcare, which exports medical devices, tumbled on the day the New Zealand dollar rose sharply, falling $1.08, or 3.28%, to $31.87. Mr Goodson said the firm would be well hedged for the next two to three years and then it would have to reset its future currency exchange.
Infratil was included in the FTSE Russell AllWorld Index at the expense of Ebos Group — based on market cap size — and they had quite different days. Infratil was unchanged at $7.28, and Ebos fell $1.10, or 3.78%, to $28.
Cancer diagnostic firm Pacific Edge and Skellerup Holdings will soon be added to the FTSE Global Small Cap Index. Skellerup surged 35c, or 8.33%, to $4.55 and Pacific Edge climbed 7c, or 6.93%, to $1.08.
Among the energy stocks, Contact was down 11c to $7; Meridian declined 17c to $5.63; Trustpower fell 17c, or 2.03%, to $8.21; and Tilt Renewables gained 21c, or 3.29%, to $6.60.
The travel stocks had a better day. Auckland International Airport climbed 12c, or 1.78%, to $6.87, and Air New Zealand rose 3.5c, or 2.30%, to $1.555.
The a2 Milk Company increased 17c to $11.34; Fonterra Shareholders’ Fund rose 21c, or 4.38%, to $5; and Comvita was up 8c, or 2.47%, to $3.32. Mainfreight fell $1.85, or 2.72%, to $66.26 and Port of Tauranga was down 23c, or 3.11%, to $7.16.
Asset Plus rose 1.5c, or 4.29%, to 36.5c after announcing it had sold its struggling Eastgate Shopping Centre in Christchurch to a private investor for $43.5 million. Mr Goodson said the shopping centre was viewed as a difficult asset and had not fully recovered since the earthquakes.