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NZ shares bounce from week's losses

New Zealand’s benchmark index eked out a small gain on Friday, closing a week plagued by market volatility and steadily climbing interest rates.

Friday, February 5th 2021, 6:32PM

by BusinessDesk

The S&P/NZX 50 Index rose 61.73 points, or 0.5 percent, to 13,053.87. Within the index, 35 stocks rose, 10 fell and five were unchanged. Turnover was $152 million.

BNZ interest rate strategist Nick Smyth said risk sentiment had returned as investors put the GameStop drama behind them. Despite the bounce the index still fell more than half percent this week.  

This weakness in the local market was more driven by climbing interest rates than by the volatile meme-stocks that absorbed so much attention.

Long-term NZ rates continued to head higher yesterday. The yield on a 10-year government bond is now 1.4 percent, having added 20 basis points just this week.

The yield has climbed almost 40 percent since the start of the year as the New Zealand economy has outperformed expectations.

Mike Jones, an economist at ASB, said investors are beginning to price in the possibility of the Reserve Bank of New Zealand tightening its monetary policy.

The central bank announced that it would again purchase just $570 million of government bonds over the coming week, as it had done during the past week.

Last week, traders were surprised by the reduced rate of bond buying—a $100 million reduction—raising questions about whether the bank was starting to taper its quantitative easing program.

The higher interest rates contributed to falling share prices across the week, although many saw a small bounce today.

Fishing company Sanford led the market higher, rising 4 percent to $4.90 on light volume.

Logistics company Mainfreight rose 2.9 percent to $67.30 and electricity firm Genesis Energy was up 2.8 percent at $3.8850.

Fisher & Paykel Healthcare posted the day’s biggest loss, falling 1.3 percent to $33.50, holding the index down despite the majority of stocks moving higher. The manufacturer dropped 3.2 percent across the week. 

Sky Network Television was the biggest winner of the week, up 11.6 percent after adding another 1.7 percent today. Investors were heartened after the pay-TV company upped its revenue guidance for the second time since November.

Vista Group International climbed 2 percent today and has improved 6 percent this week, buoyed by a sudden wave of retail buying in US cinema-chain AMC Entertainment. 

Z Energy rallied 1.8 percent on the day but finished the week down 3.7 percent. The fuel retailer was picked out as one of the stocks most negatively affected by the draft carbon budget released at the start of the week. 

The New Zealand dollar failed to hold above 72 US cents and also finished the week slightly below where it started.

The kiwi dollar was trading 71.45 US cents at 5pm in Wellington, down from 71.92 cents yesterday and 71.99 on Monday.

The trade-weighted index was at 74.56 at 5pm, from 74.86 yesterday. The kiwi traded at 94.10 Australian cents from 94.32 cents, 75.41 yen from 75.58 yen, 59.76 euro cents from 59.83 cents, 52.25 British pence from 52.83 pence, and 4.6275 Chinese yuan from 4.6447 yuan.

Tags: Market Close

« Higher bond yields push equity prices lowerEquities fall as inflation expectations rise »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 ▼2.29 ▼2.59 ▼2.65
ANZ 4.44 2.89 3.25 3.39
ANZ Special - 2.29 2.69 2.79
ASB Bank 4.45 2.29 2.59 2.65
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BNZ - Classic - 2.29 2.59 2.79
BNZ - Mortgage One 5.15 - - -
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BNZ - Std, FlyBuys 4.55 2.89 3.19 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
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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 Bank - Online 2.50 1.99 2.35 2.45
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HSBC Premier LVR > 80% - - - -
HSBC Special - 1.99 - -
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ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.79 3.04 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
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Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 2.65 2.65
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Last updated: 26 February 2021 11:27am

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