Contact Energy reports its half-year result on Monday, followed by Vulcan Steel, Fletcher Building, Steel & Tube and SkyCity over the next two days.
Sullivan said Treasury failed to fill a $200m, five-year government bond at 4.09 per cent, attracting $188m worth of buyers. “This is a real anomaly that doesn’t happen very often.”
In December, a $200m, five-year bond tender was not filled for the first time in a decade. Sullivan said Treasury commented then that this wouldn’t occur again and yet two months later it has happened.
“The interest rate obviously needs to be higher to get the tender away,” he said. Two other issues - a $150m 2034 bond at 4.25 per cent and a $50m 2051 bond – were oversubscribed.
Global transport and logistics company Mainfreight slumped $2.30 or 2.99 per cent to $74.60 after again producing satisfactory earnings numbers but reporting a downturn in trading conditions in late December and into January, particularly in the United States and Asia.
In its trading update for 43 weeks from April to December, Mainfreight earned revenue of $4.82 billion, up 17 per cent and profit before tax of $490.2m, an increase of 32 per cent. Its revenue in the US was steady at $1.34b and Asia’s fell 32 per cent to $217.33m.
The company said the combination of lower international sea freight and airfreight volumes and lower trading rates are reflected in reduced revenue and profit before tax levels for the US and Asia.
Overall, it was a satisfactory year-to-date result, but a less than satisfactory contribution from the US and Asia in the 17 weeks post its half year, Mainfreight told the market. The company is reviewing freight rates to address inflationary cost pressures and “we continue to find new customer opportunities in each region”.
Sullivan said Mainfreight is facing more competition now that borders have reopened and its margins are lower. “While the headline figures were good, their outlook was subdued and this disappointed the market. Mainfreight is a quality blue-chip stock and it will do well in the long run.”
Fisher and Paykel Healthcare was down 15c to $25.91; Spark declined 5.5c to $5.25; Chorus fell 25c or 2.87 per cent to $8.45; Mercury Energy decreased 18c or 2.8 per cent to $6.24; Auckland International Airport shed 9.5c to $8.53; and Meridian was down 6.5c to $5.395.
Contact Energy, declining 3c to $7.72, has won the contract to develop a 300ha solar farm on Christchurch Airport land along with its partner Lightsource bp. The farm will generate 290 GWh per year - equivalent to powering 36,000 homes or half of Christchurch’s domestic flights being converted to low-emission technologies.
Other decliners were Freightways, down 15c to $9.42; Synlait Milk which shed 8c or 2.26 per cent to $3.46. Restaurant Brands decreased 11c to $6.45; AFT Pharmaceuticals fell 9c or 2.31 per cent to $3.80; and Comvita was down 7c or 2.05 per cent to $3.35.
Green Cross Health shed 3c or 2.21 per cent to $1.33; Rakon was down 3c or 2.78 per cent to $1.05; Winton Land declined 4c or 1.99 per cent to $1.97; Cooks Coffee decreased 2.5c or 6.41 per cent to 36.5c; and NZ King Salmon Investments gave up 1c or 4.55 per cent to 21c.
Gentrack rose 16c or 5.95 per cent to $2.85; Ventia Services rebounded 11c or 4.18 per cent to $2.74; Air New Zealand was up 1.5c or 1.88 per cent to 81.5c; NZME increased 2c to $1.17; MHM Automation gained 2c or 2.27 per cent to 90c; and Third Age Health improved 4c or 2.67 per cent to $1.54.
Tower, down 1c to 67c, provided a further update on the impact of the upper North Island flooding, including Auckland, saying 3600 customers have lodged 4810 policy claims – 2600 are home insurance claims. Tower’s full-year guidance remained unchanged.
Rua Bioscience was up 1.1c or 6.04 per cent to 19.3c after the appointment of Paul Naske, formerly chief operations officer, as chief executive, and interim managing director Anna Stove takes over as chairwoman, replacing Trevor Burt who is retiring.
Fellow medicinal cannabis company Cannasouth gained 1c or 3.45 per cent to 30c.
