MARKET CLOSE: NZ shares extend slide 15 Sep 2016
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- OceanaGold finds new gold deposits at Fraser mine Business
- Transpower gets go-ahead for $170m SI upgrade Business
- NZ home sales creep up in March, still subdued Property
- NZ economy expands at fastest pace in two years Business
- New Zealand food prices fall in February Business
Wednesday 14 September 2016 05:45 PM
MARKET CLOSE: NZ
shares extend slide; Mercury, Meridian and Air NZ
decline
By Sophie Boot
Sept. 14 (BusinessDesk) - New Zealand shares extended their slide with little positive news to stem the decline. Mercury New Zealand, Meridian Energy and Air New Zealand fell.
The S&P/NZX 50 Index dropped 38.5 points, or 0.5 percent, to 7,210.73. Within the index, 30 stocks fell, 12 rose and eight were unchanged. Turnover was $197 million.
Investors are waiting for positive company news to reassure them as local index selling, which began on Monday following a Wall Street selloff driven by comments made by US Federal Reserve officials about the likelihood of a US rate increase, continues, Peter McIntyre, investment adviser at Craigs Investment Partners, said.
"We're heading into annual general meeting season and a lot of investors and analysts are looking for company outlooks," McIntyre said. "We had a strong reporting season, now we've got volatility driven from offshore, and there's just a lack of news which is probably going to drive investors to the sideline. Unless we start getting some really positive commentary from the AGMs to further confirm company outlooks. A lot of the market has been driven higher by offshore investors, and they don't like higher interest rates."
Mercury New Zealand was the worst performer, down 8.3 percent to $2.87. The stock has shed 12.7 percent since last Tuesday, when it reached an eighteen-month high of $3.288 having risen following its annual earnings announcement in August.
Risk aversion and a global rout in bonds have pushed up interest rates, denting the appeal of stock yields. Local interest rate swaps rates have gained, with the 10-year swap rate up more than 18 basis points to about 2.59 in the past week.
"We've seen our interest rate swaps rise quite dramatically since Monday, that's where our banks swap their fixed and floating rates and it's a benchmark for setting interest rates for the likes of corporate bonds which has a direct pricing into equities," McIntyre said. "We've seen some interest-rate-sensitive stocks being sold off on the basis of that, and it's a question of who's going to run first at the moment it seems. Particularly the utility-based investments - Chorus, Genesis, Meridian - and the property-based stocks - Goodman and Precinct - they're all interest rate-sensitive stocks, the uplift in the swap rates has had an impact on our market."
Meridian Energy dropped 3.3 percent to $2.77, Goodman Property fell 3 percent to $1.31, Genesis Energy declined 2.6 percent to $2.24 and Chorus gave up 1.6 percent to $3.985.
Air New Zealand fell 2.5 percent to $1.935. The airline gave its August operating statistics today, and said load factors had fallen on domestic, trans-Tasman and long haul routes.
"It's disappointing - they're finding things are a little weaker within their own business and competitors are coming into the market, which will have an impact on yields and margins eventually," McIntyre said. "They gave good guidance around their reporting time, saying they're not expecting the same profitability over the next twelve months as they have previously, but certainly the last two operating and statistical performances they've put out have been weaker."
Skellerup Holdings was the best performer, up 3 percent to $1.36.
"They're having a strong day on really good volume for them, it's a cyclical stock and with the uptick in the dairy sector after the last three Global Dairy Trade auctions it's looking far brighter than what it has," McIntyre said. "The dairy sector's looking far more positive and they sell products which have to be used on a weekly basis, so I think investors have a lot more confidence."
Tegel Group rose 1.8 percent to $1.72 and Sky Network Television gained 1.5 percent to $4.79.
Outside the main index, Veritas dropped 9.1 percent to 20 cents. Salt Funds Management, which manages $1.6 billion of assets, has lifted its stake in the Mad Butcher franchisor, taking advantage of a slump in its share price, which has tumbled since it filed its 2016 unaudited financial results on Aug. 29 when the shares were trading at 47 cents.
Turners gained 1.6 percent to $3.13. The financial services firm, formerly known as Dorchester Pacific, said pretax earnings may rise 14 percent in the first half, putting the company on track for annual profit growth.
(BusinessDesk)
ends
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more