New Zealand’s S&P/NZX 50 index was among the few stock markets to fall across Asia, as fears over a protracted downturn for Fletcher Building and new constituent Briscoe Group giving up some of its recent gains outweighed optimism there might be peace coming in the Middle East.
Blue chips including a2 Milk Co, Auckland International Airport and Fisher & Paykel Healthcare were also among the local decliners weighing on the index.
Meanwhile, across the Tasman Virgin Australia and Greatland Resources Group gave investors some IPO fever with strong debuts in their initial public offerings.
And NZ Windfarms shareholders voted to accept a takeover offer from Meridian Energy in the latest departure from the stock exchange.
A bourse alone
The NZX50 fell for a fifth day, sliding 67.54 points, or 0.5%, to 12,465.11, with 23 decliners, 25 gainers, and two stocks unchanged. Turnover across the main board was $111.7 million.
That was against a backdrop where most stock markets rallied across Asia, with Australia’s S&P/ASX 200 up 0.9%, Japan’s Nikkei 225 advancing 1.2% and Hong Kong’s Hang Seng rising 2% as investors were buoyed by the restrained retaliation by Iran to US strikes on its nuclear sites and the prosect of a ceasefire between it and Israel.
“Right now it’s rather unclear whether there is a ceasefire. Neither Israel nor Iran have acknowledged it, and more missiles have landed in Israel,” said Matt Goodson, managing director at Salt Funds Management. “It certainly excited markets which are trying to predict what happens next.”
The kiwi dollar climbed to 60.13 US cents at 5pm in Auckland from 59.76 cents at 7am and 59.21 cents yesterday.
Briscoe led the NZX50 lower, falling 5% to $5.65 after getting downgraded to ‘underperform’ by Forsyth Barr over its surge higher ahead of joining the benchmark index.
A long wait
Fletcher also declined, falling 3.6% to $2.97 after holding its long-awaited briefing for investors keen to get an update on the building materials firm’s strategic review. The company outlined extra impairment charges it faces in the coming year.
Goodson said Fletcher’s underlying earnings are just below analysts’ expectations.
“There could be significant value present if and when they turn things around, but that’s what investors have to weigh,” he said.
Auckland Airport was also weaker, falling 1.7% to $7.67 on the day’s biggest volume of 1.7 million shares. Forsyth Barr analysts held their target price on the national gateway at $7.95 and kept an ‘underperform’ rating, saying its regulatory environment is at its most uncertain point in a decade and may lead to a negative outcome for the airport.
Among other blue-chip companies on the decline, a2 Milk fell 2.2% to $8.49 and F&P Healthcare slipped 0.9% to $36.25.
Banking on it
Dual-listed lender Westpac Banking Corp posted the biggest gain on the NZX50, up 3.5% at $36.86, while ANZ Goup Holdings increased 1.8% to $31. The Commonwealth Bank of Australia hit a new record on the ASX.
Meanwhile, Australia’s bourse welcomed two newcomers with successful IPOs for Virgin Australia and Greatland Resources, which were up 9.1% and 13% from their offer prices in late trading. New Zealand’s stock market operator NZX gained 0.7% to $1.48.
ASX-listed Qantas Airways was up 2.9%, while Air New Zealand increased 0.9% to 57.5 cents on the NZX.
Outside the benchmark index, NZ Windfarms slipped 2%, or 0.5 of a cent, to 24.5 cents after its shareholders agreed to a 25 cents per share takeover by Meridian Energy, which was up 1.4% at $5.74.
Reporting by Paul McBeth. Image from Curious News.
