Thursday 10 November 2016 05:30 PM
MARKET CLOSE: NZ shares recoup Trump losses, gains led by A2 Milk, Heartland Bank, Fletcher Building
By Sophie Boot
Nov. 10 (BusinessDesk) - New Zealand shares regained some of yesterday's losses, led upwards by A2 Milk Co, Heartland
Bank, and Fletcher Building, while Auckland International Airport declined.
The S/NZX 50 Index rose 1 percent, to 69.51 points, to 6,733.72. Within the index, 27 stocks rose, 20 fell and four were
unchanged. Turnover was $191 million.
The local benchmark index dropped 3.3 percent yesterday, turning to a loss around 3pm as it became increasingly apparent
the US public had voted for Donald Trump as their new president. This morning, it bounced by as much as 3.4 percent
after positive leads from Wall St and European markets but has pared those gains as the day wore on, lagging behind
Asian markets this afternoon.
At 5:05pm, Japan's Nikkei 225 was up 5.9 percent, Hong Kong's Hang Seng had gained 1.9 percent, and Australia's S/ASX 200 rose 2.8 percent.
"Our friends across the Tasman are trading significantly higher, it's a strong day for resources which is driving their
market, and we're crimped a bit because of the interest rate sensitive stocks we have," said Peter McIntyre, investment
adviser at Craigs Investment Partners. "We've seen swap rates both here and Australia really drive to the upside, on the
basis that some of Trump's policies are very inflationary, and the Reserve Bank saying unless something dramatic happens
we're unlikely to cut rates again.
"When longer-term bond yields rise, we're seeing a sell-off in our more interest rate sensitive stocks, and Auckland
Airport is a good example of that - it's a quality asset, but it's weaker," McIntyre said. Auckland International
Airport was the third-worst performer on the index today, down 2.6 percent to $6.32.
New Zealand's two-year swap rate rose five basis points to 2.2 percent and the ten-year swaps gained 25 basis points to
3.0875 percent.
A2 Milk Co led the index, up 9.2 percent to $2.14. Yesterday it dropped 4.9 percent to $1.96. On Tuesday, the milk
marketer said its first quarter sales of $112.5 million met expectations with sales driven by growth in infant formula
and milk.
"That story of exporting to China hasn't gone away because of Trump," McIntyre said. "They've done it again, that switch
trade below and above $2. Their first quarter update reaffirmed their position but was a bit soft to be fair, but the
market likes the story and it continues to be well bid on strong volumes. It's got a lot of liquidity so if investors
need to reduce quickly, they're able to, and we've seen the cut and thrust of the stock again. If it was to break out
above $2.20, the likelihood is it would go even higher from there."
Heartland Bank rose 6.3 percent to $1.51, while Australia & New Zealand Banking Group gained 5.9 percent to $28.95 and Fletcher Building advanced 5.5 percent to $10.02.
Meridian Energy was the worst performer, down 3.4 percent to $3.455, while Precinct Properties dropped 2.8 percent to
$1.20.
Vital Healthcare Property Trust shed 2 percent to $2.01. The Auckland-based hospital and healthcare property developer
and investor, which raised $160 million in July to help fund its growth strategy, says it's in a strong position for
growth and has A$77.9 million in six current developments across Australia.
Goodman Property Trust dropped 0.8 percent to $1.21. The NZX-listed commercial and industrial property investor,lifted
first-half profit 38 percent, largely due to valuation gains on its investment properties, and maintained its full-year
guidance.
Z Energy fell 0.1 percent to $7.40. The service station operator raised its first-half dividend as it posted a 22
percent gain in earnings and a 57 percent jump in fuel volumes following its acquisition of Chevron New Zealand's Caltex
and Challenge! brands.
(BusinessDesk)