NZX 50 fell 8.5% this year
The New Zealand benchmark ended the week down 8.5% year-to-date as bond yields climb higher and investors sell lower stocks that have. reaped disproportionate gains in 2020.
Friday May 28, 2021, 6:04 p.m.
The S & P / NZX 50 index fell 61.09 points, or half a percent to 12,182.25. Within the index, 22 stocks fell, 21 rose and six remained unchanged.
Fisher & Paykel Healthcare was once again one of the main causes of the index weakness. Heavyweight stock fell 1.7% to $ 29.21 today, bringing its total drop last month to nearly 20%.
Fat Prophets Research Director Greg Smith said the lack of forecast scared investors who were struggling to justify the stock’s ultra-high valuation without knowing what future earnings would be.
Smith said investing in the healthcare exporter “was starting to look attractive” at these prices as the company was exposed to the reopening of the economy as well as the pandemic.
While the company has seen incredibly high sales of its hospital products, its home care and sleep apnea products have been hit. Sales in these divisions are expected to increase even if sales related to the pandemic stabilize, he said.
Mercury NZ suffered the biggest loss of the day, down 5.8% to $ 6.54, after retreating from a sudden surge in stock prices yesterday. The stock ended the week unchanged from its start on Monday.
Auckland Airport recorded the biggest gain, up 4.1% to $ 7.30, but still down 1.1% on the week.
Pushpay Holdings also ended the week unchanged, after falling 2.9% to $ 1.70 today. The rise in the Kiwi dollar will hurt US profits.
Smith said the Reserve Bank of New Zealand’s hint that it would soon raise interest rates pushed the Kiwi dollar higher and created headwinds for U.S. dollar earnings stocks.
“The RBNZ is a bit more realistic than some of its peers,” he said. “New Zealand may be the first country to raise interest rates, which partly removes the appeal of yield stocks.”
New Zealand’s 5-year swap rate jumped 8 basis points to 1.39% on Thursday as the market continued to account for possible rate hikes from the middle of next year .
Gentrack was the big winner, gaining 22% over the week and hitting a 14-month record at $ 1.89, after reporting half-year profits well above analysts’ expectations – $ 7 million versus $ 1.5 million of Jarden dollars.
The utility software company expects to earn between $ 5 million and $ 10 million in 2021, which will prompt analysts at Jarden to add 52 cents to raise their target price to $ 1.92.
Eroad increased profits 13% to $ 30.7 million from $ 27.1 million last year by increasing the number of units under contract by nearly 10,000 in the year ended March . Its share rose 2.8% to $ 5.56 today.
The Kiwi dollar was trading 72.77 cents US at 3pm in Wellington, down slightly from 72.81 cents yesterday.
The trade-weighted index was at 75.51 by 3pm, down from 75.63 yesterday. The kiwi traded at 93.96 Australian cents from 94.14 cents, 79.98 yen from 79.46 yen, 59.73 cents from 59.76 cents, 51.30 British pence from 51.64 pence and 4.6399 Chinese yuan of 4.6542 yuan.
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