Vaccine hopes spur shares higher
Investors move into riskier stocks on news of promising first-phase trial
New Zealand shares rose as promising results from a Covid-19 vaccine trial spurred optimistic investors to take positions in riskier stocks. Kathmandu Holdings led the market higher.
The S&P/NZX 50 index advanced 152.25 points, or 1.3 per cent, to 11,502.52. Within the index, 33 stocks rose, 12 fell and five were unchanged. Turnover was $156 million.
Stephen Innes, chief global market strategist at AxiCorp, said the vaccine data from BioNTech and Pfizer was the most promising so far, even though it was only a first-phase trial. The companies plan to stage a larger trial of 30,000 within weeks, provided they receive regulatory approval.
NZ joined the regional rising trend, with demand for companies on strong growth trajectories, such as Pushpay Holdings, and firms that may be on the mend from the initial Covid hit.
Matthew Goodson, managing director at Salt Funds Management, said the day was full of unpredictable trading with “very aggressive moves on extremely light volumes”.
For example, Pushpay rose 9.1 per cent to $9.40 on a volume of just 450,000 shares without any obvious reason, he said. Air New Zealand advanced 8.5 per cent to $1.47, while Auckland
International Airport dropped 0.9 per cent to $6.36. “It is bizarre to see Air New Zealand up at a time when Auckland Airport, which is clearly struggling, is down,” Goodson said.
Kathmandu led the market higher, climbing 11.4 per cent to $1.27 after the retailer detailed strong sales recovery over the past six weeks and said it will stay profitable at an operational level for the rest of the year.
Excluding stores that remain closed, Rip Curl sales rose 21 per cent and the Kathmandu brand lifted sales 12.5 per cent. The group expects earnings to be above $70m for the year ending July 31.
Goodson said while the trading update was good news, what really mattered was future earnings, which were still unknown.
“There will certainly be upgrades for this year, but it clearly it was a trough year anyway and what really matters is the shape of earnings in the couple of years thereafter,” he said.
New Zealand Refining rose 6.9 per cent to 77c with 160,000 shares changing hands. Fuel retailer Z En
ergy, which has been struggling with weak demand, increased 2.6 per cent at $2.75.
Goodman Property Trust advanced 3.9 per cent to $2.12 on a volume of just 450,000 shares. Cinema software firm Vista Group
International fell 1.4 per cent to $1.39. Delayed releases of blockbuster movies are halting the reopening of movie theatres around the world.
Tourism Holdings posted the day’s biggest decline, dropping 4 per cent to $1.92. Sky Network Tele
vision fell 2 per cent to 14.9c. In a statement just before trading closed, the pay-TV operator said it’s revised its satellite contract with Optus.
Metlifecare shares declined 1 per cent to $5.14. The New Zealand Shareholders’ Association said it will reluctantly vote in favour of Metlifecare’s litigation aimed at forcing Sweden’s EQT to proceed with its $1.5 billion takeover offer, despite expecting court costs to be high and the process slow.