Market commentary
SERVICE station operator Z Energy got the latest local reporting season under way with a solid profit and price rise, but a shaky New Zealand sharemarket ignored that and fell more than half a percent.
The S&P/NZX 50 Index was down 96.63 points, or 0.75%, to 12,751.67. The index has fallen 3% this year, while offshore markets have risen 7%.
There were 53 gainers and 82 decliners over the whole market on steady volume of 57.85 million share transactions worth $188.51 million.
Mark Lister, head of private wealth research with Craigs Investment Partners, said the local market was having a difficult ride and continuing to lag offshore markets.
‘‘There is nervousness about higher interest rates and inflationary pressures, and the Fonterra capital restructure could have been disruptive for the broader market,’’ he said.
Overnight, US Treasury Secretary Janet Yellen clarified her interest rates comment, saying she was not predicting or recommending rate hikes and there was not an inflationary problem. The Dow Jones Industrial Average rose to a record, increasing
0.29% to 34,230.34.
Z Energy rose 9c to $2.75 after striking a 165% increase in net profit to $57 million for the 12 months ending March, turning around a loss of
$88 million in the previous year. Cost savings totalled $49 million.
Revenue was down 29% to $3.52 billion, and total marketing volume fell 22% to 3.08 billion litres, mainly involving jet fuel, bitumen and marine fuel. Z Energy is paying a final dividend of 14c a share on June 2, and its 2022 fullyear operating earnings (ebitdaf) guidance is $270 million to $310 million, compared with $238 million in the past year.
Z Energy’s share price is just above its low of $2.64, achieved on March 23 last year, and far below the twoyear high of $6.70 set on August 13, 2019.
The big cap stocks continue to drag the market down. Fisher and Paykel Healthcare was down 75c to $33.80, on trade worth $28 million, after reaching $36.46 last week.
Auckland International Airport fell 17.5c to $7.57, a2 Milk slipped a further 26c to $7.72, Chorus declined 11c to $6.65, Ebos Group was down 50c to $30.20 and Fletcher Building decreased 13c to $7.28. Synlait Milk fell 8c to $3.40.
Mr Lister said a2 Milk was in the firing line with investors worried about another earnings downgrade and the possibility of it falling out of the MSCI global index.
The energy stocks again had mixed days. Meridian was down 6c to $5.46 and Mercury declined 7c to $6.90, while Contact was up 7c to $7.72 and Genesis gained another 5c to $3.55.
The shining light was Mainfreight, which burst through the $76 mark, rising $1.10 to $76.40.
Other gainers were Ryman Healthcare, up 25c to $14.35, Scott Technology gaining 5c to $2.60; NZME increasing 3c to 77c; and Rakon also picking up 3c to 95c.
Reopening stocks were knocked around. SkyCity Entertainment fell 12c to $3.50 after presenting in Australia the day before, Vista Group declined 4c to $2.46 and Serko was down 10c to $6.65. But Tourism Holdings rose 4c to $2.65.
Property for Industry has bought a 3.64ha industrial site in Wiri for $91.68 million, and its share price edged ahead 2.5c to $2.88. —