NZ sharemarket’s new year low
Kathmandu and Heartland Group lead stocks down
New Zealand shares fell in the first trading of 2019, led lower by Kathmandu Holdings, which was punished for posting weaker-thanexpected Christmas sales.
The S&P/NZX50 dropped 78.9 points, or 0.9 per cent, to 8732.37. Within the index, 38 stocks fell, six rose, and six were unchanged. Turnover was $85.6 million.
Kathmandu sank 14 per cent to $2.37, a six-month low, after saying trading fell short of management’s expectations through the Christmas period, with sales down 1 per cent in the 22 weeks through December 30 from a year earlier. Still, it managed to improve gross margins by 60 basis points to 64 per cent, and said firsthalf profit will likely rise 4-8 per cent.
“Sales growth was below expectations, albeit margins were still pretty solid,” said Matt Goodson, managing director at Salt Funds Management. “This is a market where, if a company disappoints, it takes no prisoners.” Heartland Group remained under pressure, down 4.4 per cent at $1.32, a new two-year low. The lender has been under pressure since the Reserve Bank said it will impose tougher capital requirements on licensed banks. New Zealand Refining fell 3.8 per cent to $2.26 on twice its average volume, while Mercury NZ was down 3.7 per cent at $3.51 on half its average volume.
Large defensive stocks were among the few gainers on large volumes. Electricity generatorretailer Meridian Energy rose 0.4 per cent to $3.42 on a volume of 1 million, while Precinct Properties
New Zealand was up 0.3 per cent at $1.485 on a volume of 1.2 million and Auckland International Airport increased 0.3 per cent to $7.20 on a volume of 1.2 million. Kiwi Property Group was the most actively traded stock with a volume of 2.2 million, almost twice its 90-day average. It fell 1.8 per cent to $1.34. Spark New Zealand decreased 0.2 per cent to $4.14 on a volume of 1.5 million, half its average.
Goodson said defensive stocks remained attractive in a volatile environment. There were sharp global currency movements after Apple downgraded its earnings guidance, based in part on weakness in Chinese leading indicators. Fonterra Shareholders Fund
units rose 0.2 per cent to $4.65 after prices at the Global Dairy Trade auction rose in the first event of 2019, on smaller supply. Fonterra Cooperative
Group’s shares, which trade in a closed market for farmers, fell 0.6 per cent to $4.64. Rival processor Synlait Milk was unchanged at $9, while milk marketing firm a2 Milk fell 1.4 per cent to $11.
Sky Network Television rose 2.7 per cent to $1.90, the biggest gain on the day.
Outside the benchmark index,
Promisia Integrative was unchanged at 0.2 cents after the dietary supplements firm raised $1.35m in a 3-for-1 rights issue.