NZ left behind as other exchanges power ahead

The New Zealand sharemarket continued the trend of the week with another incremental rise, but as the end of the half-year approaches, the market’s performance is well short of the kind of gains seen on major offshore bourses.

By the close, the S&P/NZX50 Index was at 12,626.09, up 39.2 points or 0.31 per cent, having lost a shade under 7 per cent since hitting its record high of 13,558.19 in early January. In contrast, the US sharemarket, boosted by President Joe Biden’s plans to rejuvenate the economy, has gone from strength to strength, the key S&P500 index hitting a record 4266.49 after gaining 13.6 per cent since the start of the year.

Likewise, the Aussie sharemarket has performed strongly, the ASX200 gaining about 11 per cent since the start of the year.

European markets have done similarly well.

“It has vastly underperformed the European, US and Australian markets, which have had double-digit growth,” said Forsyth Barr investment adviser Dan Stratful.

“The utilities have driven the market down by the index-related selling early in the year, which affected Meridian and Contact Energy,” he said.

Meridian finished the day at up 3c at $5.24 while Contact closed a cent higher at $8.10.

Genesis, which firmed 4c to $3.38, and Mercury, steady on $6.50, have remained generally flat since the start of the year.

Stratful said the local market’s relative underperformance could also be put down to a flat listed property sector.

Together, the property and power sectors occupy the high-yielding, dividend-paying segment of the market, which has fallen from favour thanks to early signs of firming interest rates.

Infant formula company a2 Milk and its closely allied manufacturer Synlait were both firm, gaining 19c to $6.75 and 5c to $3.73 respectively, having fallen sharply since late last year due to a2 Milk’s woes in the “daigou” trade into China.

“They have fallen so much that there is going to come a time when there will be renewed interest in the dairy processing sector, and there will come a time when there is a rebound,” Stratful said.

Shares in manuka honey exporter Comvita topped the list of gainers — rising 16c or 4.9 per cent to $3.44 after the company reported that it was the leading brand in the category in the recently completed “618” shopping festival in China.

Comvita’s total sales through the festival increased by 31 per cent on last year, reflecting strong consumer awareness.