Sharechat Logo

MARKET CLOSE: NZX50 drops below 10,000 as blue-chips fall off the pace

Monday 29th April 2019

Text too small?

The S&P/NZX 50 Index fell back below 10,000 after becoming the most expensive across Asia based on forward-looking metrics. Blue-chip stocks including Spark New Zealand, Goodman Property Trust and Ryman Healthcare were among those sold down today. 

The benchmark index declined 77.17 points, or 0.8 percent, to 9,994.57. Within the index, 33 stocks fell, seven rose, and 10 were unchanged. Turnover was $124.7 million. 

The NZX50 broke through the 10,000 level this week, as the Easter and Anzac holidays thinned out trading rooms. The index is up 14 percent so far this year, with the prospect of low interest rates lasting for even longer supporting demand for companies offering reliable dividends. That has helped push the likes of Chorus, Meridian Energy, Mercury NZ and Genesis Energy to records. 

The utilities were mixed today, with Meridian posting the biggest gain on the day, up 1.2 percent at $4.14 on a volume of 1.1 million shares. Chorus was up 0.2 percent at $6.255, Genesis fell 0.7 percent to $3.07 and Mercury was down 1.7 percent at $3.80. 

The average dividend yield on the NZX50 is the third-highest among Asia-Pacific benchmark indices tracked by Refinitiv, however, a forward price-to-earnings ratio of 22.65 makes the local bourse the most expensive in the region. 

Greg Smith, head of research at Fat Prophets, said the holidays had affected trading this week with a lot of people taking leave around the Easter and Anzac Day holidays to extend their break.

That left the local market following international leads. While strong US earnings had supported stocks, the upcoming US GDP reading will be closely watched to see if the economic data backs up corporate results. 

"That could give a bit of a lift to our market next week. The NZX50 has gone through the 10,000 mark and that will be a guide to see whether it will hold."

Ryman led the market lower, down 3.3 percent at $11.89 on a volume of 640,000 shares, more than its 444,000 three-monthly average. Goodman Property Trust dipped 0.3 percent to $1.725 on a volume of 3.4 million units, more than five-times its 90-day average of 608,000. 

Spark New Zealand dropped 2.3 percent to $3.585 on a volume of 5.8 million shares and was the most traded stock on the market. The telecommunications company attracted more criticism over an outage on its new sports streaming platform during the trans-Tasman Anzac Day hockey test. 

Smith said Spark has to iron out those problems on the platform, which could dent the telco's reputation if it happened during the Rugby World Cup. Spark's success or failure in hosting that event will have a lot of bearing for Sky Network Television, which is trying to reposition itself as the broadcasting home of sports, he said. Sky shares fell 2.4 percent to $1.24 on a volume of 780,000.

Of other companies trading on volumes of more than a million shares, Contact Energy rose 0.6 percent to $6.75 and Kiwi Property Group increased 1 percent to $1.525. 

Air New Zealand declined 1.1 percent to $2.72. Its turbine business won a US$17 million contract with the US Navy, taking its total work with the maritime defence force to US$55 million since 2017. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar rises against Aussie, Chinese yuan
Geothermal production drives record Eastland earnings, payout
RBNZ to announce final decision on bank capital rules by November
Licensing key to medicinal cannabis firm Cannasouth's ambitions
PwC says NZ banks would effectively hold 27.1% equity if RBNZ proposals are adopted
Terra Vitae says poor harvest to hit sales, earnings
Weak services sector growth raises concerns about NZ economic slowdown
National sticks to bob-each-way on US-China relations in new policy paper
Kiwi Property lifts annual profit 15% as valuations rise
Kiwi Property lifts annual profit 15% as valuations rise

IRG See IRG research reports