NZ shares take a breather after hitting a fresh record
By Jenny Ruth
July 24 (BusinessDesk) - New Zealand shares were mixed after five successive daily gains with leading stocks A2 Milk, Fisher & Paykel Healthcare and Ryman Healthcare surrendering some of their recent gains.
The S&P/NZX 50 Index fell 54.71 points, or 0.5 percent to 10,812.54. Earlier in the day, the index hit a fresh record at 10,892.01.
Within the index, 17 stocks increased, 9 were unchanged and 24 fell. Turnover was light at $98.05 million.
“It’s just reversing some of the last few days’ meteoric gains,” says David Price, a broker at Jarden.
“The volumes are really, really weak and the news flow has been particularly quiet,” Price says.
A2 Milk shares fell 2.46 percent to $17.02 after hitting a record $17.57 yesterday and is still up more than 19 percent in the past month.
Fisher & Paykel Healthcare eased 1.52 percent to $16.15 while Ryman sank 2.84 percent to $12.99, making it the day's largest decliner.
Given falling interest rates globally, stocks that pay healthy dividends remain in demand and Price says he expects that to continue “with the promise of more juice for the patient coming up in the form of lower interest rates.”
The New Zealand market’s median price-to-earnings ratio currently is a stellar 23 times earnings, but when the risk-free rate falls, that makes share prices appear reasonable, he says.
Contact Energy, which paid a first-half dividend of 16 cents per share and predicted a full-year payout of 39 cents, up from 32 cents the previous year, gained 0.13 percent to $7.82 but was earlier up as high as $7.97.
Fellow utility Meridian Energy advanced 1 percent to $4.99 while the other two major electricity generators and retailers, Mercury New Zealand and Genesis Energy, were unchanged at $4.75 and $3.44 respectively.
Telecommunications network provider Chorus rose 0.56 percent to $5.42.
Logistics heavyweight Mainfreight also defied the downward trend, gaining another 0.14 percent to $42.14. Mainfreight will hold its annual shareholders’ meeting next week and the New Zealand Shareholders’ Association has reminded members that it gave chief executive Don Braid, who led the company since 2000, its Beacon Award last year for outstanding performance.
Mainfreight “has continued to grow and prosper over a long period” and its share price has risen from $23.80 in July 2017, NZSA said.
Among the day’s largest gainers were out-of-favour stocks Sky Network Television, up 1.59 percent at $1.28, and Fletcher Building, up 1.03 percent at $4.91.
Fletcher shares are down 30 percent from a year ago while Sky TV shares are down 50 percent.