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NZ shares fall as Aussie lockdown bites

New Zealand shares fell as new lockdown measures - placed over parts of Australia to stem a resurgence of covid-19 - weighed down financial and travel stocks on the local market. Fruit exporter Scales dropped on downgraded earnings.

Monday, August 3rd 2020, 7:22PM

by BusinessDesk

The S&P/NZX 50 Index fell 61.54 points, or 0.5 percent, to 11,666.09. Within the index, 36 stocks fell, six rose, and eight were unchanged. Turnover was unusually light at just $92.8 million.

The index was weaker as investors became concerned the new restrictions, imposed in Victoria, to halt the spread of the covid-19 virus, would hurt Australia's economy.

Yesterday, Premier Daniel Andrews declared a state of disaster and placed the city of Melbourne under another six weeks of lockdown with tough new rules. The decision came after Victoria recorded more than 1,000 cases and 10 deaths from the virus across the weekend.

While the news weighed down the NZ benchmark, Australia’s S&P/ASX 200 made a modest gain of 0.2 percent as listed gold mining stocks rose when the price of gold hit another record, closing in on US$1,980 per ounce.

Fears of further global economic fallout from rising virus cases has been driving demand for the safe-haven metal.

Australian-centric financial stocks fell lower on both sides of the Tasman, as investors revised their economic expectations downwards.

Australia and New Zealand Banking Group dropped 4.8 percent to $18.57 and Westpac Banking Corporation fell 3.9 percent to $17.70. Heartland Group Holdings, a specialist Kiwi lender, declined 0.8 percent to $1.30.

Travel stocks were also weaker as the prospect of a trans-Tasman bubble became a faraway hope.

Prime Minister Jacinda Ardern told media today it would be at least several months before the border between the country could be opened. Others have suggested it is unlikely to happen until next year. 

Air New Zealand fell 1.5 percent to $1.32, Tourism Holdings dropped 1.1 percent to $1.86 and Auckland International Airport declined 0.4 percent to $6.355.

“With the virus getting worse in Victoria that is going to delay any sort of trans-Tasman travel, obviously that is a negative,” Grant Williamson, director of investment firm Hamilton Hindin Greene said. 

While the trans-Tasman bubble may be on hold, Auckland Airport today announced it was preparing to separate groups of travellers in its international terminal, in anticipation of the border opening between New Zealand and the Cook Islands.

Scales Corp shares dropped 6.1 percent to $4.93 percent, leading the market lower, after the agribusiness was less upbeat about annual earnings as covid-19 hits global sales and prices.

Williamson said the correction would be limited as the company, though reliant on commodity prices, was still strong.

“Scales has a good history of managing things well and has a really solid balance sheet,” he said.

“Overall, the company is still very well positioned, and I just see this as a short-term fluctuation,” Williamson said.

The company said it expects underlying net profit to be at the bottom end of its $30 million-to-$36 million guidance range in calendar 2020. Underlying profit was $36.4 million in 2019.

Among the year’s best performing stocks: Pushpay Holdings dropped 4.9 percent to $7.55 and A2 Milk Company declined 0.2 percent to $20.80. Fisher & Paykel Healthcare rose 0.1 percent to $36.05, despite falling earlier in the session.

Manufacturer Skellerup Holdings posted the day’s biggest gain, rising 1.6 percent to $2.48.

Just six stocks made a gain today, three of which were utilities only exposed to the domestic economy. Contact Energy rose 0.2 percent to $5.85, Spark New Zealand gained 0.2 percent at $4.94 and Trustpower was up 0.5 at $6.65. Goodman Property Trust advanced 0.5 percent to $2.23.

Tags: Market Close

« NZ shares rise as local earnings salvage sentimentBetter news out of US and Europe drives NZX rally »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 ▼2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.15 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.00 3.13 3.02

Last updated: 21 September 2020 10:48am

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