Market commentary

WELLINGTON: The New Zealand sharemarket continued its uncertainty despite a big rebound on Wall Street — and Ryman Healthcare suffered heavily from selling pressure as it falls out of a major global index.

The S&P/NZX 50 Index traded steadily for the most of the day and then dropped off late in the afternoon, closing flat. The index was down 10.51 points or 0.09% to 11,157.66 on light volume of 36.7 million share transactions worth $103.1 million.

The intraday high was 11,276.5 points, and there were 89 gainers and 44 decliners across the main board.

Matt Goodson, managing director of Salt Funds Management, said the local market still had a sell tone to it as there was no follow through from a strong lead in the United States.

‘‘Why? Higher interest rates. We are now seeing New Zealand corporate bond issues with rates above mid5% and they are a powerful instrument for investors seeking alternatives to equity dividend earnings,’’ he said.

The New Zealand market rolled over the latest Chinese retail sales and industrial production showed falls in April. Retail sales fell 11.1% and industrial production was down 2.9% — far worse than analysts expected.

Mr Goodson said that was hardly surprising given the Covid lockdowns in China.

On Friday night (NZ time), the Nasdaq Composite in the US recovered 3.82% to 11,805 points; S&P 500 was up 2.39% to 4023.89; and Dow Jones Industrial Average increased 1.47% to 32,196.66.

The NZ dollar continued to weaken, trading at US62.42c against the American greenback after reaching an intraday high of US62.94c.

At home, Ryman Healthcare shed 73c or 7.77% to $8.66 on trade worth $9.79 million after the news that it will be removed from the MSCI Large Cap Index at the end of the month.

Mr Goodson said this move was widely expected and there had been pretrading. ‘‘But whether there has been sufficient trading, we have to wait and see. The pure passive investment funds have to sell, and there’s estimates that 25 million to 45 million of Ryman’s total shares have yet to be sold.’’

Manawa Energy (formerly Trustpower) increased 8c to $7.03 after reporting a 290% increase in net profit to $119.81 million on revenue of $1.018 billion, up 3% for the 12 months ending March. Generation was also up 3% to 1760 GWh.

Following the sale of Trustpower’s retail business to Mercury Energy, Manawa is paying a special dividend of 35c a share and final dividend of 16c a share on June 17. Manawa expects 2023 operating earnings (ebitdaf) of $140 million$160 million and capital expenditure of $45 million$55 million.

Mercury was up 11c or 1.95% to $5.76; Fletcher Building gained 13c or 2.21% to $6.01; and Synlait Milk was up 7c or 2.25% to $3.18. —