NZX50 nudges lower in mixed Asian session; 2degrees shows some ankle

New Zealand’s S&P/NZX 50 index was among the laggards across Asia, as Chinese tech firms gave up some of their recent gains, while record gold prices continued to buoy Australia’s mining sector.

KMD Brands paced the day’s declines ahead of its annual result on Wednesday as the retailer focuses on extracting costs from its business, while Fonterra Cooperative Group’s earnings on Thursday will be the local highlight for the week.

Air New Zealand was softer after an executive reshuffle ahead of its annual meeting on Thursday, which will be last for chief executive Greg Foran.

Meanwhile Ebos Group was at the top of the charts as the animal and healthcare products maker continues to wax and wane after its disappointing result last month.

Weighty FPH

The NZX50 was marginally lower as it decreased 1.25 points at 13,227.9, with 22 stocks declining, 23 gaining and five unchanged. Turnover was $125.2 million across the main board, with Fisher & Paykel Healthcare accounting for $20.8 million as it dipped 1.6% to $37.40.

Stock markets across Asia were mixed, with Hong Kong’s Hang Seng down 1.1% in late trading and China’s Shanghai Composite sliding 1.3% as Chinese tech companies gave up recent gains after Nvidia unveiled plans to invest up to US$100 billion in ChatGPT maker OpenAI, buoying the tech-heavy Nasdaq on Wall Street overnight.

Meanwhile, Japan’s Nikkei 225 advanced 1% while Australia’s S&P 500 index gained 0.5% in late trading, with mining companies such as Emerald Resources and Westgold enjoying the boom in gold prices.

The NZX-listed Smart Gold exchange traded fund rose 1.8% at $3.481 in trading today and is up almost 37% so far this year.

The NZX50 was weighed down by heavyweights including F&P Healthcare, while Mainfreight fell 1.4% to $62.10 and Summerset Group Holdings slipped 1.7% to $10.60. Ryman Healthcare led the benchmark lower, falling 2.9% to $2.35.

KMD Brands was among those pacing the declines as it slipped 2.1% to 23 cents ahead of reporting its annual result tomorrow. The retailer outlined a sharp focus on cutting costs at its recent investor day.

“I can’t imagine anything particularly encouraging on the retail front with the New Zealand economy at this stage,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene.

Not far removed

Spark New Zealand slipped 0.8% to $2.35. Smaller rival 2degrees Group lodged its financial statements with the Companies Office today, showing a 3.2% increased in revenue and earnings growth of about 8.6%, even as depreciation, interest costs and a fair value adjustment widened the bottom line loss to $18.2 million.

Among the highlights for the week is Fonterra’s annual result on Thursday, which might also shed some light on the dairy exporter’s sale of the Mainland consumer business to France’s Lactalis for $4.2 billion. The Fonterra Shareholders’ Fund units rose 2.7% to a record high $7.45, on an adjusted basis. The cooperative’s shares, which can only be traded among farmers, were unchanged at $6.

Air New Zealand declined 0.8% to 59 cents after announcing an executive reshuffle ahead of Thursday’s annual meeting, which will be the last for chief executive Greg Foran, who landed the top job just as carriers around the world were grounded by the covid pandemic.

Auckland International Airport decreased 0.3% to $7.76.

SkyCity Entertainment Group was the most heavily traded stock as 7.8 million shares changed hands, with the price closing unchanged at 66 cents.

Ebos posted the biggest gain on the day, up 2.9% at $29.54, with the firm continuing to get pushed around since reporting a slower pathway to cutting costs in its earnings announcement last month.

Stock market operator NZX rose 0.7% to $1.38 after announcing a new addition to the bourse from next week, when ASX-listed Manuka Resources takes up a secondary listing on this side of the Tasman.

Would-be gold miner Santana Minerals was the last addition to the NZX when it took a secondary listing in New Zealand last year, and it rose 2.8% to 91.5 cents.

The kiwi dollar traded at 58.46 US cents at 5pm in Auckland from 58.58 cents yesterday, with reports that the government is poised to announce a new governor for the Reserve Bank on Wednesday. The local currency traded at 88.83 Australian cents from 88.84 cents yesterday.

Reporting by Paul McBeth. Image from Curious News.