Market close: Strong NZ dollar and mixed results weigh down sharemarket

The travel stocks had a better day on the renewed hope of border re-openings. Photo / File

There was plenty of action involving the New Zealand sharemarket, but in the end it fell one per cent, weighed down by mixed company results, rising wholesale interest rates and a strong NZ dollar.

The S&P/NZX 50 Index was down 122.39 points or 0.98 per cent to 12,426.24 after reaching an intraday high of 12,588.38. There were 54 gainers and 90 decliners over the whole market on strong trading of 50.86 million shares worth $191.55 million.

The yield on the New Zealand 10 Year Government Bond rose 13 basis points to 1.65 per cent, and the NZ dollar strengthened during the day against the American greenback, trading in a range of US72.84c to US73.39, after S&P upgraded New Zealand's credit rating.

"With bond yields rising so sharply, it's not a great surprise that the market has fallen," said Matt Goodson, managing director of Salt Funds Management. "Chorus is one stock affected by this, and the utilities again had some sharp moves."

Chorus fell 28c or 3.48 per cent to $7.77 after reporting a 2 per cent drop in revenue to $473m and a 23 per cent decrease in profit to $24m for the six months ending December. Operating earnings (ebitda) were $323m compared with $332m for the previous corresponding period.

Chorus increased its fibre connections by 62,000 to 813,000 and it is paying an interim dividend of 10.5c a share on April 13. But the market raised an eyebrow at Chorus' capital expenditure forecast of $670m-$700m.

Freightways shed 23c or 2.12 per cent to $10.63 despite producing a steady first half result. Its revenue rose 29 per cent to $410.3m, net profit fell 25 per cent to $21.96m and it is paying an interim dividend of 15.5c a share on April 1.

Goodson said Freightways' result was solid across all its divisions and it had a strong run leading up to the announcement – the result was not enough to see a further upgrade.

Fisher and Paykel Healthcare, which exports medical devices around the world, tumbled on the day the NZ dollar rose sharply, falling $1.08 or 3.28 per cent to $31.87. Goodson said Fisher and Paykel will be well hedged for the next two to three years and then it will have to reset its future currency exchange.

Infratil was included in the FTSE Russell All-World Index at the expense of Ebos Group – based on market cap size – and they had quite different days. Infratil was unchanged at $7.28, and Ebos fell $1.10 or 3.78 per cent to $28.

Cancer diagnostic firm Pacific Edge and Skellerup Holdings will soon be added to the FTSE Global Small Cap Index. Skellerup surged 35c or 8.33 per cent to $4.55, and Pacific Edge climbed 7c or 6.93 per cent to $1.08.

Among the energy stocks, Contact was down 11c to $7; Meridian declined 17c to $5.63; Trustpower fell 17c or 2.03 per cent to $8.21; and Tilt Renewables gained 21c or 3.29 per cent to $6.60.

The travel stocks had a better day on the renewed hope of border reopenings as Covid cases fall and the vaccine takes hold. Auckland International Airport climbed 12c or 1.78 per cent to $6.87, and Air New Zealand increased 3.5c or 2.30 per cent to $1.555.

The a2 Milk Company increased 17c to $11.34; Fonterra Shareholders' Fund rose 21c or 4.38 per cent to $5; and Comvita was up 8c or 2.47 per cent to $3.32. Mainfreight, always a steady performer, fell $1.85 or 2.72 per cent to $66.26, and Port of Tauranga was down 23c or 3.11 per cent to $7.16.

Metro Performance Glass put out a lower earnings forecast, saying its operating earnings (ebit) for the year ending March will be $16.5m-$18m compared with $21.8m for the previous year. Metro fell 2c or 4.49 per cent to 42.5c.

Asset Plus rose 1.5c or 4.29 per cent to 36.5c after announcing it has sold its struggling Eastgate Shopping Centre in Christchurch to a private investor for $43.5m. Goodson said the shopping centre was viewed as a difficult asset and had not fully recovered since the earthquakes.

Property for Industry was down 2c to $2.86 after reporting a 36 per cent fall in net profit, from $176.3m to $113.45m for the 2020 financial year. The company had a lower revaluation on its investment properties, a gain of $72.5 compared with $125.2m the previous year. Stride Property also fell 7c or 3 per cent to $2.26.