Delegat brings cheer to downward day

Index edges further 0.86 per cent closer to correction

Leading wine exporter Delegat Group provided a spark as the New Zealand sharemarket stayed perilously close to correction territory with another sharp fall.

The S&P/NZX 50 Index was down 106.42 points or 0.86 per cent to 12,282.42, similar to the level in early November and just shy of the 10 per cent fall from the all-time high in January that signals a formal technical correction.

There were 44 gainers and 97 decliners over the whole market, and trading was strong with 63.55 million shares worth $202.93m changing hands.

Dan Stratful, investment with Forsyth Barr, said the prospect of the economy entering a recession may have spooked the market.

“Three economists have come out and said we are going into a mild recession because of a summer tourism season that completely [ lacked] international visitors. They predict that the December and March GDP quarters will be mildly negative and that’s when we have a shallow, short recession. But markets price in a recession at least a month before. The local market is facing a combination of rising long-term interest rates, the exchange traded funds selling the energy stocks and now a possible recession.”

Stratful said the utilities and property stocks have been dragging down the market.

Delegat Group climbed 84c or 5.85 per cent to $15.20 after reporting record case sales and operating earnings for the six months ending December. Delegat sold 1.86m cases globally, up 7 per cent with the key market of North America having 17 per cent sales growth.

Another exporter, Foley Wines, fell 5c or 2.44 per cent to $2 after reporting a 2.2 per cent drop in revenue to $28.29m and 5.8 per cent decline in profit to $2.56m for the six months ending December. Foley’s total case sales were down 7 per cent to 281,000.

Telecommunications company Spark New Zealand was down 2c to $4.66 after reporting a half-year 11.4 per cent fall in net profit to $148m and a 1.5 per cent drop in revenue to $1.796 billion.

Spark is paying an interim dividend of 12.5c a share on April 9.

Meridian Energy fell 12c or 2.14 per cent to $5.50 — it was last at that level in early November — despite reporting a 5 per cent increase in revenue to $1.896b and 19 per cent rise in net profit to $227m. Generation volumes were down 7 per cent, and customer numbers are now more than half a million in New Zealand and Australia, 3 per cent growth since June last year.

Meridian is paying an interim dividend of 5.7c a share on April 16, and it is building a $395m wind farm in Hawke’s Bay, with 41 turbines generating 176 MW, to help transform the economy to clean energy sources,

NZME remained unchanged at 90c after posting a profit turnaround of $14.2m compared with a loss of $165.2m for the previous corresponding six months.

Personal lender Harmoney fell 12c or 5.06 per cent to $2.25 following its 126 per cent climb in half-year revenue to $19.4m.