Post-election, the local market has had a firmish tone, but last night's close of 7113.32 on the benchmark S&P/NZX 50 Index was well short of last September's record high of 7571.1.
THE BIG ROTATION
"Rotation" is fast becoming a familiar term for local investors. Up until last year, the market enjoyed a strong run thanks to its role as a kind of surrogate bond market while yields sank to abnormally low levels the world over.
"What you have seen globally is a rotation towards cyclical stocks - particularly the mining and building stocks - and especially in the United States," said Salt Funds managing director Matt Goodson.
"The market tends to be full of bond-proxy type securities - the power generator /retailers, Spark and the property stocks," he said. "So one would not expect our market to have performed as strongly [as the US], and that indeed has been the case."
COMVITA REBOUNDS
The summer, or more precisely the lack of one, has had its impact on some stocks.
It seems that bees, like people, prefer to stay indoors when the weather is wet, cold and windy.
Stay-at-home bees, and cooler weather affecting the nectar that plants produce, has had a big impact on honey production, so much so that Comvita - New Zealand's biggest manuka honey maker - has had to substantially lower its operating earnings forecasts for the current year.
A poor season would bring a 60 per cent shortfall in its manuka honey harvest which, together with slower sales through China's informal trading channels, would drag its June year operating earnings down to about $5 million to $7m from a previous forecast of $17.1m, it said.
The company expects a honey crop of 380 tonnes in the 2017 year, compared to an average harvest of 974 tonnes.
The stock quickly sank by $1.33 to $6.50 on the news but it has since clawed back some ground, closing last night at $7.20, having hit a record high last year of $12.87.
For the moment, the downtrade is being viewed as an industry-wide phenomenon and part and parcel of being an agriculture-based company with exposure to the differing weather patterns.
OCEANIA MISSES
Another honey maker, Oceania Natural, which trades on the alternative NXT market, has slashed its 2017 revenue forecast as deep discounts on rival honey products undermine sales into China.
The Auckland-based company lowered its revenue target to $2.2m for the year ending March 31 from $5.4m. Sales into China via distributors are expected to be $605,000, down from a previous forecast of $4m, while Oceania's direct sales are projected to be $1.6m, up from $1.4m.
China's crackdown on grey market traders is weighing on a variety of exporters relying on those distribution channels, such as infant formula makers.
CLASS ACTION
Missing earnings forecasts can be a messy business. The once-high flying ASX-listed infant formula maker Bellamy's now faces two class actions from disaffected shareholders over alleged breaches of its corporate disclosure responsibilities.
In the latest action, specialised litigation funder IMF Bentham said it proposed to fund claims of certain current and former shareholders of Bellamy's. The claims relate to alleged misleading or deceptive conduct and an alleged breach by Bellamy's of its continuous disclosure obligations in connection with its trading prospects and future earnings performance during the period between April and December last year.
Bellamy's shares were suspended from trade in mid-December after the company warned of weaker-than-expected sales. The stock remained under doward pressure when trade resumed on January 11. It traded at A$3.81 yesterday - down from A$12.13 at the start of last December.
