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The Markets

Local market in lock-step with ASX

Shares in New Zealand’s benchmark index were buoyed by strength in the Australian market and an as-expected earnings report from Contact Energy.

Monday, August 10th 2020, 6:46PM

by BusinessDesk

The S&P/NZX 50 closed up 0.3 percent, or 36.76 points, at 11,683.44. Within the index, 31 stocks were up, 14 were down and five were unchanged. Turnover was $112.5 million.

Stocks with exposure to the Australian market led gains on the local market as new fiscal stimulus in the United States, which investors expect to support the global economy, helped to start the week with a bounce.

Australian-owned banks were among the stocks making the biggest gains. Westpac Banking Corp rose 4.2 percent to $18.80 and Australia & New Zealand Banking Group was up 3.4 percent to $19.70.

Peter McIntyre, an investment advisor at Craigs Investment Partners, said banking stocks were trading higher on the ASX as investors sought out a cash return on investment. 

“A lot of those stocks are trading on historical yields of more than 4 percent, particularly in Australia,” he said. “Even though bank profitability is going to be under pressure over the next six months, investors are still looking at the sector for that yield.”

Kathmandu Holdings, which also carries heavy exposure to the Australian market, rose 3.6 percent to $1.16. McIntyre said some brokers had upgraded their rating of the stock and investors were buying in reaction.

New Zealand’s earnings season kicked off with electricity generator and retailer Contact Energy today reporting a 64 percent decline in full-year net profit due to lower wholesale prices and reduced production from its hydro scheme.

Still, the share price rose 2 percent, to $6.22, as the company announced a 23 cent final dividend that will take the full-year payout to 39 cents, unchanged from last year.

McIntyre said with returns on term deposits sitting below 2 percent, investors were still looking to the electricity sector for yields, even with the uncertainty of how future earnings will play out after the Tiwai Point aluminium smelter is closed.

Meridian Energy dropped 3.2 percent to $4.82, the day’s biggest loss, after it said it had not received a response to its proposal to keep the smelter open for up to four years.           

Vital Healthcare Property Trust was the other local company to report earnings today, showing its portfolio's value rose by $249.9 million, or 13.6 percent, in the latest year.

The company’s shares dropped 0.2 percent to $2.625 and are down 6.9 percent year to date. However, they are trading at a premium to net asset backing at June 30 of $2.38.

The two biggest export stocks both rose as the kiwi dollar eased slightly. A2 Milk Company was up 1 percent at $20.73, while Fisher & Paykel Healthcare was up 0.4 percent to $35.56.

Currency markets were fairly muted as better-than-expected US jobs data helped the greenback rally, but tensions with China limited that rise.

The kiwi traded at 66.05 US cents at 5pm in Wellington from 66.65 cents on Friday. The trade-weighted index was at 72.71 from 72.23 on Friday.

The kiwi traded at 92.24 Australian cents from 92.56 cents on Friday, 70.85 yen from 70.39 yen, 56.02 euro cents from 56.31 cents, 50.55 British pence from 50.82 pence, and 4.6023 Chinese yuan from 4.6423 yuan.

Tags: Market Close

« Energy sector leads sharemarket lowerSharemarket investors go bargain hunting »

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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 - - - -
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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
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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
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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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