INDEPENDENT NEWS

MARKET CLOSE: NZ shares flatline in light trading

Published: Mon 12 Aug 2019 09:53 PM
MARKET CLOSE: NZ shares flatline in light trading; Fonterra sinks after dropping dividend
By Paul McBeth
Aug. 12 (BusinessDesk) - New Zealand shares barely budged in relatively light trading as Contact Energy met earnings expectations in kicking off the reporting season. Fonterra Shareholders' Fund units sank as the dairy giant dashed hopes for a dividend this year.
The S/NZX 50 Index decreased 0.47 of a point, or 0.004 percent, to 10,872.74. Within the index, 25 stocks rose, 18 fell and seven were unchanged. Turnover was $92.2 million, with five companies trading on volumes of more than a million shares.
Contact decreased 0.5 percent to $8.26 on a volume of 1.3 million shares after reporting a 12 percent increase in operating earnings and met expectations with a final dividend of 23 cents per share.
"It was a reasonable result and in line with what the market was expecting as well," said Peter McIntyre, an investment advisor at Craigs Investment Partners. "There was a bit of talk about margin pressure with regards to the retail side of business, but every gen-tailer is finding that."
Fonterra Shareholders' Fund units led the market lower, down 5.1 percent at $3.57 on a volume of 411,000, more than twice its 90-day average of 175,000. Fonterra Cooperative Group said it will report an annual loss of up to $675 million after booking more than $800 million on assets worldwide, including its New Zealand consumer business.
The dairy exporter's board decided not to pay a dividend for the financial year, subordinating the interests of unitholders to protect farmgate returns for farmer-shareholders. The cooperative's farmer-owned shares were also down 5.1 percent at $3.57, valuing the company at $5.75 billion.
McIntyre said he wouldn't be surprised if the price tests the $3 level, with most institutional and retail investors having already quit the stock. "It just hasn't worked," he said.
A number of stocks trading near year-highs gave up some of those gains, including Kiwi Property Group, down 1.5 percent at $1.635 on a volume of 1.2 million shares. Argosy Property declined 1.4 percent to $1.44, Stride Property fell 1.3 percent to $2.30 and Infratil decreased 1.1 percent to $4.875.
Summerset Group was the most traded stock on a volume of 2.1 million shares, more than four times its 481,000 average. It was unchanged at $5.84 ahead of tomorrow's first-half result. Of other companies reporting tomorrow, NZX increased 0.8 percent to $1.20 and PGG Wrightson remained in a trading halt pending a 1-for-10 share consolidation.
Spark New Zealand decreased 0.7 percent to $4.10 with 1.4 million shares changing hands, less than half its 3.1 million average. Meridian Energy was unchanged at $5 on a volume of 1.3 million.
Gentrack Group rose 4.4 percent to $5.50 on a volume of 287,000 shares, more than twice its 90-day average of 113,000. McIntyre said the stock was upgraded in a broker's report, which noted that the software developer's services had helped some utilities in the UK lift their market share.
Tourism Holdings rose 1.3 percent to $3.96 on a volume of 74,000, less than half its average, after saying a tax benefit in the US meant it comfortably beat the top end of earnings guidance. Even without that tailwind, it said earnings would be at the top end, or slightly above, its twice downgraded forecasts.
Outside the benchmark index, Hallenstein Glasson rose 5.7 percent to $5.60 after the clothing retailer said annual profit was up by about 2 percent, with sales growth across its Glassons womenswear chain in New Zealand and Australia.
McIntyre said investors don't expect double-digit returns on retail stocks given the tough trading environment, and are satisfied with any level of expansion.
Metro Performance Glass was unchanged at 37 cents after announcing the exit of chief financial officer John Fraser-Mackenzie at the end of the year. He joined the glassmaker in 2015, almost a year after it went public.
Chorus's 2021 bonds paying annual interest of 4.12 percent were the most traded debt security with a volume of 505,000. The notes closed at a yield of 2.1 percent, down 9 basis points.
ASB Bank announced the details of its offer to sell up to $100 million of five-year bonds, with unlimited oversubscriptions. The indicative margin was set at 0.85-0.88 percent, implying an interest rate of 1.83-1.86 percent.
(BusinessDesk)
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy
By: Statistics New Zealand
Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate
By: Joint Press Release
Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea
By: Ministry For Primary Industries
New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand
By: IDC New Zealand Ltd
Whale-watching By Satellite – Follow Their Travels Online
By: University of Auckland
Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million
By: Commerce Commission
Public Transport Distancing Requirements Relaxed
By: Ministry of Health
New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs
By: New Zealand Hemp Industries Association Inc
One In 14 Employed People Report High Risk Of Losing Jobs
By: Statistics New Zealand
ASB Quarterly Economic Forecast Shows NZ Economy Doing Better Than Expected, But Challenges Remain
By: ASB
Successful Bridge Repair Opens Two Additional Lanes To Traffic
By: New Zealand Transport Agency
Engineers Assess Damage To Auckland Harbour Bridge After Truck Strike
By: NZ Transport Agency
Motorists Urged To Avoid Damaged Auckland Harbour Bridge
By: NZ Transport Agency
Harbour Bridge: Public Transport A Great Option And Plan Ahead
By: Auckland Transport
Second Harbour Crossing Needed Now, More Than Ever
By: New Zealand National Party
View as: DESKTOP | MOBILE © Scoop Media