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Last Article Uploaded: Friday, December 3rd, 11:25AM

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The Markets

NZ shares flat as global markets fear Evergrande crisis

New Zealand’s defensive share market was mostly immune to global jitters as a giant Chinese firm looks ready to collapse under the weight of hundreds of billions of debt.

Tuesday, September 21st 2021, 6:40PM

by BusinessDesk

The S&P/NZX 50 Index was almost unchanged, down just 1.6 points, or 0.01%, at 13,165.94. Turnover was $173 million.

Key US indices each fell about 2% overnight, as investors worried that property developer Evergrande Group’s insolvency could lead to a liquidity shock in the wider market.

The Hang Seng Index was trading just 0.4% lower during the session, but this came after losing more than 3% on Monday as it neared a year low.

“Investors were already getting a little nervous before these developments, with the global economy having lost momentum over the last couple of months,” said Mark Lister, head of private wealth research at Craigs Investment Partners.

September is often thought to be a difficult month for share prices, and this year is no different with inflation pressures building and central banks looking to rein in monetary support, he said.

The NZX50 has declined half a percent during September, although it had a more than 5% run up during the end of August as companies reported earnings. 

“Even those with a positive medium-term view, like ourselves, must acknowledge it’s been some time since we've seen a sell-off of any magnitude,” Lister said in a note.

The local market only saw a tiny decline today, helped by a Reserve Bank of New Zealand assistant governor hosing down expectations of a 50-basis point interest rate hike next month.

ANZ chief economist Sharon Zollner said the speech confirmed her view that the RBNZ would raise rates incrementally in 25 basis point steps.

“In short: down the elevator and up the stairs. It’s long been the way monetary policy has been run, and remains the case today,” she said.

Market interest rates, which had climbed higher following the strong GDP data, dropped back to almost where they had been – giving equity markets a little more breathing room.

The kiwi dollar declined slightly – to 70.22 US cents – as traders absorbed the RBNZ’s speech which was interpreted as hinting that a smaller rate hike would be appropriate.

It was a motley crew of winners and losers on the NZX, with Sky Network Television leading the decline with a 2.4% drop to $2.01, followed by Fletcher Building down 2% at $7.22.

On the other hand, Vista Group had the biggest gain – up 3.3% at $2.52 – as its share price continues to bounce around, with Air New Zealand not far behind as it rose 2.3% to $1.57.

Synlait Milk climbed 1.3% to $3.16 as investors began to look ahead to its earnings report to be released on Monday. 

Analysts at Forsyth Barr said focus would be on the make-up of earnings and the company’s outlook as guidance was provided in late May, predicting a $20m-to-$30m net loss.

Shares in Tourism Holdings climbed 1.3% to $2.36 as the company flirted with the idea of taking up a dual listing on the ASX.

The company was included in a roadshow for prospective ASX initial public offering candidates in 2022 and told the NZX it is considering the possibility, but that no decision has been made.

Finally, Stride Property shares finished the day unchanged at $2.49 after it scrapped plans to spin off its office portfolio as a stand-alone company.

Goldman Sachs NZ was set to run a bookbuild for a $250m initial public offering today, but Stride scuppered those plans not wanting to take a risky move with lockdown and Evergrande Group’s insolvency creating uncertainty in the market.

Tags: Market Close

« NZ shares consolidate from Friday rallyNZ shares up with Evergrande lurking in background »

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Lender Flt 1yr 2yr 3yr
AIA ▲4.60 3.65 4.35 4.69
ANZ 4.79 4.25 4.95 5.35
ANZ Blueprint to Build 2.03 - - -
ANZ Special - 3.65 4.35 4.75
ASB Back My Build ▲2.29 - - -
ASB Bank ▲4.60 3.65 4.35 4.69
Avanti Finance 4.55 - - -
Basecorp Finance 5.49 - - -
Bluestone 3.74 3.54 3.89 4.09
BNZ - Classic - 3.65 4.35 4.69
BNZ - Mortgage One 5.15 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Rapid Repay ▲4.95 - - -
BNZ - Std, FlyBuys ▲4.95 4.25 4.95 5.29
BNZ - TotalMoney ▲4.95 - - -
CFML Loans ▲5.35 - - -
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 - - -
First Credit Union Special 5.85 3.59 4.09 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 5.25 4.00 4.60 -
HSBC Premier 4.49 2.19 2.45 2.69
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 4.15 3.29 3.85 4.19
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank ▲4.25 ▲4.54 ▲5.20 ▲5.54
Kiwibank - Offset ▲4.25 - - -
Kiwibank Special ▲4.25 ▲3.69 ▲4.35 ▲4.69
Liberty 4.84 - - -
Nelson Building Society 4.95 ▲4.29 ▲4.85 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.39 3.54 3.89 4.09
SBS Bank 4.79 3.65 4.19 4.25
SBS Bank Special - 3.15 3.69 3.75
Select Home Loans 3.49 3.34 2.99 3.34
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The Co-operative Bank - Standard ▲4.75 ▲4.15 ▲4.85 ▲5.19
TSB Bank 5.34 4.09 4.74 4.99
TSB Special 4.54 3.29 3.94 4.19
Unity 5.65 4.15 4.60 -
Wairarapa Building Society 4.99 ▲3.65 ▲4.05 -
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Westpac 5.09 ▲4.29 4.95 5.29
Westpac - Offset 5.09 - - -
Westpac Special - ▲3.69 4.35 4.69
Median 4.77 3.65 4.35 4.69

Last updated: 3 December 2021 8:16am

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