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NZ shares fall as kiwi dollar weighs on offshore earners

New Zealand shares fell as the strengthening kiwi dollar weighed on firms exposed to overseas earnings. Gentrack led the market lower.

Friday, June 5th 2020, 10:35PM

by BusinessDesk

The S&P/NZX 50 Index declined 51.14 points, or 0.5 percent, to 11,171.80. Within the index, 29 stocks rose, 18 fell, and three were unchanged. Turnover was $238.5 million.

The rising kiwi dollar, which climbed to near 65 US cents today, cut short a week-long rally on the benchmark index as firms which earn foreign currencies fell away. Despite today’s fall the NZX 50 rose 2.6 percent across the week.

General manager at CMC Markets NZ, Chris Smith said the strengthening kiwi had been the big story as it continued to recover against the weakening US dollar.

“We are seeing stocks that are exposed to the US dollar and offshore earnings weaker and local names do better,” he said.

Gentrack led the market lower, dropping 4.9 percent to $1.76, trimming a 24 percent gain over the previous three sessions to 17 percent. Gentrack has key markets in the United Kingdom and Singapore.

US faith sector donations firm Pushpay Holdings slipped 2.9 percent to $7.06. 

Fisher & Paykel Healthcare fell 2.5 percent to $28.08 and A2 Milk Co declined 1.8 percent to $19. These two exporters make up 30 percent of the index and are exposed to a weaker currency.

Global cinema software provider Vista Group International was also weaker, slipping 0.5 percent to $1.85.

While the index dipped lower, more stocks rose than fell as the bargain hunting fuelled by the promise of economic recovery seen earlier in the week continued.

Kathmandu Holdings posted the largest gain, up 10.9 percent at $1.22 as investors continued to position for a faster than expected move to alert level 1.

Smith said life was returning to consumer companies as the economy seemed to be bouncing back.

“We are seeing some signs of hope on the horizon that the recovery will be faster than expected,” he said. 

Fuel retailer Z Energy, who has been struggling with weak demand, rose 1 percent to $3.06.

Air New Zealand rose 8.6 percent to $1.64, with 9 million shares traded, after the carrier said further layoffs could be on the cards as it attempts to cut another $150 million from its operating expenses.

Smith said a strong performance overnight from US airline stocks may have spilled over into our market and investors would have been encouraged to see a solid plan from the company.

Auckland International Airport dropped 2 percent to $6.96.

Utility stocks had a strong day. Genesis Energy rose 1.7 percent to $3, Mercury NZ increased 1.4 percent to $4.77, Meridian Energy advanced 0.8 percent to $4.92 and Contact Energy gained 0.3 percent at $6.36.

Tourism Holdings rounded out a landmark rally with a small gain, up 0.4 percent to $2.35. The stock has risen more than 30 percent this week.

SkyCity Entertainment Group fell 2.4 percent to $2.88, trimming its gain this week to 16 percent.

Smith said investors would be looking at the jobs data coming out of the United States tonight to set the tone for next week's trading.

“All eyes are on the jobs report tonight,” he said. “Expectations are for 8 million job losses, which is less than the 20 million in the April report. May could mark the low with recovery in June.”

Tags: Market Close

« Third consecutive day of gains on NZX as optimism persistsNZX50 back in positive territory on optimism over recovery »

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Last updated: 3 July 2020 8:15am

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