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The Markets

Investors sell risk assets as delta variant causes alarm

New Zealand shares declined as covid-19 returned to centre-stage with even well-vaccinated countries struggling to stave off the delta variant.

Friday, July 9th 2021, 6:24PM

by BusinessDesk

The S&P/NZX 50 Index fell 62.16 points, or half a percent, to 12,690.35. Turnover was $185 million.

Asian share markets tumbled to a four-month low Friday as investors lost their nerve and sold risk assets in favour of bonds and the US dollar.

BNZ interest rate strategist Nick Smyth said the rapid spread of the covid-19 delta variant was making investors more cautious as it could slow the reopening of the global economy.

Japan has reluctantly declared a state of emergency as it will likely prevent spectators from attending the Olympics later this month. The delta variant has been spreading even in countries with high vaccination rates, such as Israel and the United Kingdom.  

The S&P 500 fell close to 1% overnight, EuroStoxx declined nearly 2% and Hong Kong’s Hang Seng index was down almost 3%.

On the NZX, specialist lender Heartland Group Holdings led the decline, falling 2.4% to $2.03, Sky Network Television dropped 2.4% to 16.6 cents, and Kathmandu Holdings was down 2% at $1.50

The yield on a 10-year NZ government bond dropped to its lowest level since March as investors took refuge in safer assets. The rush to safety also favoured the US dollar as the preferred place to park cash.

Kiwi at nine month low

The kiwi dollar dropped to trade at just 69.26 US cents at 3pm in Wellington, down from 69.84 cents yesterday – the lowest cross rate since November last year.

The trade-weighted index was at 73.46 at 5pm, from 73.96 yesterday. The kiwi traded at 93.43 Australian cents from 93.65, 76.05 yen from 77.14 yen, 58.50 euro cents from 59.25 cents, 50.28 British pence from 50.68 pence, and 4.4939 Chinese yuan from 4.5224 yuan.

Not all investors were risk-averse however, with two market events attracting strong interest from traders looking for opportunities.

Newly listed Radius Care raised $30m from investors and brokers at 52 cents per share, which was 2c above the floor price. These buyers included 3,000 Sharesies users who were quick enough to jump on the fast-moving placement at short notice.

Radius shares fell 11.1% to 80 cents following the raise but remain well above the placement price. The aged care company will follow up with an $5m-to-$10m offer to existing retail shareholders later in July.

Investors also snapped up Kiwi Property’s green bonds, prompting the company to set the yield at the minimum rate of 2.85% and sell an extra $50m worth.

The bonds will mature in July 2028 and have a "BBB+" credit rating from Standard & Poor's. Kiwi Property shares climbed 0.4% to $1.85, against market trends.

Heartland Group also upsized its bond offer in the Australian market, from a planned A$30 million to A$45 million after strong interest from fixed income investors.

Cancer diagnostics firm Pacific Edge gained another 0.8% today, now at $1.24 and up 120% in the past 12-months.

A note from Jarden Research welcomed Pacific Edge’s publication in Journal of Urology but left its $1.40 target price unchanged as the valuation model already assumes successful adoption of the product.

Freightways had the day’s biggest gain, climbing 1.8% to $12.75 as its share price continues to settle near its record high.

Tags: Market Close

« Pacific Edge gains while market flatlinesVista climbs on Black Widow debut »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
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 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 ▲2.29 ▲2.69 ▲2.99
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.69 2.99 3.29
SBS Bank Special - 2.19 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.68 2.99 3.29

Last updated: 29 July 2021 9:04am

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