NZ shares flat as tech rally balances covid fears

New Zealand shares edged higher as gains in local software companies spurred on by Wall Street's tech rally just offset the general malaise of the latest covid-19 lockdown.

Thursday, August 13th 2020, 7:17PM

by BusinessDesk

The S&P/NZX 50 Index rose 8.91 points, or 0.1 percent, to 11,500.82. Within the index, 21 rose, and eight were unchanged. Turnover was $211.3 million.

Cinema software developer Vista Group International led the market higher, up 4.3 percent at $1.21 as it bounced back from yesterday's drop after covid restrictions were re-imposed on Auckland where community transmission of the coronavirus has broken out. Pushpay Holdings rose 2.1 percent to $8.14.

“There was the strong lead from offshore and a bit of stabilisation as the market gets it head around what lockdown means for New Zealand stocks that were sold off heavily yesterday,” said Brad Gordon, an investment adviser at Hobson Wealth Partners.

Gordon said investor sentiment had also been lifted by positive earnings results.

Stock market operator NZX reported a 21.5 percent increase in first-half operating profit due to a marked increase in capital raisings and a surge of new retail investors driving trading activity. Shares of the company rose 2.6 percent to $1.57.

Gordon said the result was underpinned by listed companies raised capital, but that NZX needed more new listings to have a sustainable increase in revenue.

Precinct Properties New Zealand hiked its dividend on an 11.8 percent increase in operating income. Its share price rose 2.7 percent to $1.70, with 5.6 million shares traded.

Other property stocks also gained. Argosy Property advanced 2 percent at $1.25 and Goodman Property Trust also rose 2 percent to $2.30.

Gordon said the newly-imposed Auckland lockdown continued to weigh on the stocks “in the eye of the storm.”

Kathmandu Holdings fell a further 2.6 percent to $1.11, adding to the 2.6 percent fall yesterday. SkyCity Entertainment Group dropped 1.2 percent to $2.40 and Tourism Holdings declined 0.6 percent to $1.74. Both stocks have suspended their Auckland operations.

The kiwi dollar remained under pressure as investors continued to digest yesterday's Reserve Bank policy review, which expanded its quantitative easing programme and hinted at introducing negative interest rates. The official cash rate stayed at 0.25 percent.

“The RBNZ continues to bang the drum on pushing back against NZ dollar strength,” said Stephen Innes, chief global markets strategist at AxiCorp.

The NZ dollar traded at 65.62 US cents at 5pm in Wellington from 65.40 cents yesterday. The trade-weighted index was at 71.19 from 71.16.

The kiwi traded at 91.57 Australian cents from 91.95 cents yesterday, 70.06 yen from 69.85 yen, 55.60 euro cents from 55.87 cents, 50.28 British pence from 50.23 pence, and 4.5553 Chinese yuan from 4.5475 yuan.

Tags: Market Close

« Reserve Bank measures limit virus-driven stock slideDomestic bellwether stock Freightways leds NZX lower »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

© Copyright 1997-2021 Tarawera Publishing Ltd. All Rights Reserved