Listed exporters hurting from sky high kiwi

With the kiwi dollar sitting comfortably at 30-month highs and flirting with a break above 71 US cents investors today sold their holdings in exporters drawing revenue from the United States.

Thursday, December 3rd 2020, 7:20PM

by BusinessDesk

Fisher & Paykel Healthcare led the market lower, dropping 3.8 percent to $33.64, as the strong exchange rate eats into its margins.

The kiwi dollar was trading at 70.67 US cents at 5pm in Wellington, down slightly from 70.72 cents yesterday after climbing as high as 70.85 cents overnight.

The medical device exporter was likely further slowed by the United Kingdom giving the Pifzer vaccine emergency authorisation, although investors have largely absorbed the vaccine news.

“The speed of the rollout is expected to be pretty quick and there is quite a lot of optimism. If anything, there is potential for hiccups to [negatively] affect the market,” said Grant Davies, an investment adviser at Hamilton Hindin Greene.

“Any new developments around efficacy or ability to mass produce will move the dial, but the benefits are probably baked into the market to a certain extent now.”

The S&P/NZX 50 Index fell 79.78 points, or 0.6 percent, to 12,648.91. Within the index, 22 stocks fell, 23 rose and five were unchanged. Turnover was $209.4 million.

The three biggest declines on the index all came from stocks earning US dollars and which were strong performers during the covid crisis.

US-focused online church management platform Pushpay Holdings declined 3.2 percent to $1.83 as it gave back some gains after a 7 percent surge earlier in the week.

Meanwhile, dairy product marketer and distributer A2 Milk dropped 2.3 percent to $13.70. The company mainly exports to China, although views the US as a potential growth market.

“There is a little bit of concern around the escalating tensions between Australia and China that might be weighing on A2 at the moment,” Davies said.

The two nations have been clashing over trade settings and geopolitical control as China expands its global influence.

Mercury NZ posted the day’s biggest gain, climbing 4.2 percent to $6.41, followed by Heartland Bank which continued its rally, adding 3.3 percent to reach $1.58.

Three listed companies have seen executive resignations in the past week, and all had their share price fall in response.

Today, SkyCity Entertainment recovered 2.9 percent at $3.20 as it steadied itself following the resignation of three top executives, and Kathmandu, which lost its experienced fashion industry executive, clawed back 2.4 percent at $1.26.

The most recent company to lose its top boss, Sky Network Television, continued to slide, dropping 1.2 percent to 16.3 cents.

The travel industry seemed to be buoyed by the vaccine progress. Tourism Holdings rose 2.8 percent to $2.57, Air New Zealand edged up 0.8 percent at $1.875 and Serko was up 1.7 percent at $5.52.

Davies said the easing of travel restrictions in Australia was helping the online travel booking company, which today reported transaction volumes had increased to 44 percent of prior year volumes for the month of November, up from 35 percent in October.

Units in Fonterra Shareholders’ Fund dropped half a percent ahead of its first-quarter business update tomorrow.

In currency markets, the kiwi traded at 95.36 Australian cents from 95.79 cents yesterday, 73.80 yen from 73.82 yen, 58.28 euro cents from 58.53 cents, 52.78 British pence from 52.68 pence, and 4.6340 Chinese yuan from 4.6337 yuan. The trade-weighted index was at 74.24 at 5pm, from 74.34.

Tags: Market Close