by BusinessDesk
New Zealand shares found some solid ground on Wednesday as some investors stepped in to buy stocks that had been brutally sold off over the past few days.
The S&P/NZX 50 Index rose 3.7 points, or 0.03%, to 11,233.17. Turnover was $150 million.
US stocks rebounded overnight led by the technology companies which were worst affected by the recent correction.
The Nasdaq Composite climbed almost 1%, while the Dow Jones fell another 0.3%.
BNZ interest rate strategist Nick Smyth said investors were still “very cautious” due to monetary policy tightening, China in lockdown, and the risk of an energy crisis in Europe.
“The rebound in equities looks much more like a correction – some might say a bear market rally – rather than a change in trend,” he wrote in a note.
Some poor-performing NZX-listed companies led the local market higher, including My Food Bag which bounced 5% – from an all-time low of 79 cents – to reach 84 cents today.
Craigs Investment Partners research analyst, Joshua Dale, today reiterated his positive view of the meal-kit company but cut its target price 11.6% to $1.50 – due to a higher cost of capital for investors.
The analyst said the company’s shares were worth less now the yield on a 10-year NZ government bond has climbed to 3.8%.
“Our analysis of My Food Bag versus its small cap peers leaves the company looking materially undervalued on a multiples and yield basis,” Dale wrote.
A2 Milk Company bounced 4.8% to $4.55 – having slid 10% in the past month – and DGL Group pulled out of a nosedive after it fell 22% in the past five days.
The chemical logistics company has been in free-fall ever since its chief executive made disparaging comments about My Food Bag co-founder, Nadia Lim.
After an official apology today, DGL’s share price stopped falling and moved up 1.6% to $3.21.
Shares in Air NZ jumped 4.3% to 73 cents, also reversing a sharp decline, after the government said it would completely open the borders from August 1.
The decision brings forward by two months the previous complete reopening of the border for non-visa waiver countries, which had previously been timed for Oct 1, although always with the potential for a reschedule.
Other travel stocks did not have the same positive reaction.
Tourism Holdings fell 1.5% to $2.68 and Auckland International Airport declined 2.2% to $7.17.
SkyCity Entertainment Group and Millennium & Copthorne Hotels were both unchanged at $2.78 and $2.37, respectively.
Pushpay Holdings declined 2.4% to $1.30 after reporting earnings much in line with market expectations.
The company picked up some new customers during the 2022 financial year, but not as many as it had hoped.
Jarden analyst Guy Hooper said the result contained “few surprises” but the company did give an upbeat outlook commentary and forward targets which were ahead of Jarden’s own estimates.
Pushpay declined to answer analyst questions about the takeover interest it has received but flagged it was being advised by Goldman Sachs.
The NZ dollar also halted its decline against the US dollar and was trading at 63.06 US cents at 3pm in Wellington, up marginally from 63.03 cents yesterday. Westpac’s head of NZ strategy, Imre Speizer said there was potential for the Kiwi to drop as low as 62.30 US cents in the coming days.
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