Commercial landlords including Precinct Properties NZ, Kiwi Property Group, Investore Property and Stride Property were at the forefront of domestic trading today, changing hands on heavy volumes at a time when their valuations might be at the bottom of the market.
That also extended to the residential property-linked retirement village operators, with Ryman Healthcare and Summerset Group Holdings falling in tandem.
The heavy trading flows coming in at the end of the month, when institutional investors often rejig their portfolios, weighed on the S&P/NZX 50 index as it lagged behind most of Asia and notched up its fourth straight monthly decline in what’s been a hectic April.
Meanwhile, the kiwi dollar drifted lower against its trans-Tasman counterpart after the ANZ business outlook survey showed local firms' confidence held up through the month, and as Australian inflation remained largely in check.
April is the cruellest month
The NZX50 fell for a second day, declining 122.14 points, or 1%, to 11,903.31, to end the month down 3%. Turnover was bigger than normal at $302 million across the main board, with property stocks attracting heavy trading for another day.
Stocks across Asia were broadly stronger, following the upbeat lead from Wall Street, with Australia’s S&P/ASX 200 index up 0.3% in late trading, while Japan’s Nikkei 225 index rose 0.3% and Hong Kong’s Hang Seng increased 0.2%. S&P 500 futures were pointing to a 0.5% decline.
Precinct was again the most traded stock on a volume of 16.5 million as it increased 0.5% to $1.08, while Kiwi Property fell 0.6% to 82.5 cents on a volume of 13.4 million. Investore declined 1% to $1.02 with 7.7 million shares changing hands and Stride slipped 0.5% to $1.10 on a volume of 7.1 million, while Goodman Property Trust decreased 1.9% to $1.835 with 5.7 million units traded.
“Over the last couple of days, we’ve seen some very large trades in property stocks that looks like some kind of shift out of them for whatever reason,” said Matt Goodson, managing director at Salt Funds Management. “It’s interesting that it’s maybe when valuations won’t be too far from the bottom, and when they’re at a reasonable discount to their NTA,” he said, referring to net tangible asset value of the companies.
Separately, shareholder notices today showed FirstCape emerged as a substantial shareholder of Kiwi Property with a 5% stake, while Milford Asset management lifted its holding of Precinct to 9% from 7.9%.
Retirement village operators, which investors often tie to the fortunes of the residential market, were also weaker, with Ryman sliding 5.6% to $2.21, its lowest on an adjusted basis since October 2011, and Summerset falling 2.2% to $10.78. Oceania Healthcare rose 1.6% to 65 cents.
Tourism Holdings led the benchmark index lower, falling 6.2% to $1.37 to take its monthly slump to almost 23%.
Double vision
Auckland International Airport fell for another day as investors digested the potential regulation facing the sector and its new long-term strategy, which delayed the building of a second runway by a decade. The shares fell 3.3% to $7.52.
Meanwhile, Vista Group International posted the biggest gain on the day, up 4.4% at $3.55, with software firms broadly stronger as Serko advanced 2.9% to $3.60 and Gentrack rose 1% to $11.73. Eroad gained 1.1% to 90 cents.
The kiwi dollar traded at 59.33 US cents at 5pm in Auckland from 59.39 cents at 7am and 59.51 cents yesterday after the ANZ business outlook showed firms’ confidence shrank 9 points to a net 49% of respondents expecting better economic times ahead in April, while expectations for their own activity only dipped by 1 point to a net 48% predicting growth.
“The ANZ April business opinion survey – the first one held since the US ‘Liberation Day’ tariff announcement – was remarkably steady,” Westpac NZ senior economist Michael Gordon said in a note. “Sentiment about general conditions was softer compared to March, but firm’s own-activity expectations were little changed, and remain at high levels.”
The kiwi fell to 92.52 Australian cents from 92.80 cents yesterday after the annual pace of Australia’s underlying inflation measure slowed to 2.9% in the March quarter.
Reporting by Paul McBeth. Image from Curious News.
