Market close: NZ sharemarket ends year in the red

Rakon was the best performing company on the NZ sharemarket in 2021. Photo / Natalie Slade

The New Zealand sharemarket, hit by rising inflation and interest rates and the global uncertainty of Covid-19, has finished the frustrating year on a very quiet and disappointing note.

The late rally petered out on the final day of trading for 2021- and the S&P/NZX 50 Gross Index finished nearly 0.5 per cent down for the year.

The previous worst performing years were in 2011 when the index fell 1.04 per cent and in 2018 when it gained 4.92 per cent.

The index did reach an intraday high of 13,081.58, but it was half-hearted and it closed at 13,033.77, down 7.17 points or 0.06 per cent on the half-day trading, after rising on six of the last seven trading days.

There were 77 gainers and 47 decliners over the whole market on light volume of 10.83 million share transactions worth $39.92m.

The index began the year at 13,091.64 points, and reached its all-time high on January 8 at 13,558.19 points when the offshore clean energy exchange traded funds were buying Contact and Meridian at over-valued prices.

Contact reached $10.75 and now sits at $8.10 after rising 11c on the final day. Meridian, unchanged at $4.85, hit a high of $9.40 and has fallen nearly 35 per cent for the year.

The index fell to 12,182 points at the end of May and then had a revival between late August and mid-November, reaching 13,337 in early October. But then the Reserve Bank began raising the official cash rate, and therefore interest rates, and tightened its monetary policy, unsettling the market.

The under-performing local market meandered to the end of the year. Across the Tasman the S&P/ASX 200 Index was up 12 per cent for the year and the benchmark S&P 500 in the United States surged 28 per cent.

Specialist electronics manufacturer Rakon, up 4c or 1.96 per cent to $2.08, was the NZX's best performer, climbing nearly 247 per cent in the last 12 months.

Nationwide publisher and broadcaster NZME, unchanged at $1.43, was the next best with a 104 per cent rise.

Michael Hill International, unchanged at $1.37, increased 90 per cent; carpet maker Bremworth, down 1c to 72c, climbed 84 per cent; and the resurgent Steel & Tube, up 2c to $1.55, improved by 64 per cent.

The best performing top 50 stock was Skellerup Holdings, down 7c to $6.34, with a 76 per cent rise, followed by Ebos Group – decreasing 20c to $41.20 – with a gain of more than 44 per cent during the last 12 months.

Global marketer a2 Milk, up 4c to $5.93, had four successive earnings downgrades and suffered a 51 per cent fall after starting the year at $12.17 and reaching a high of $21.51 on July 30, 2020.

Matt Goodson, managing director of Salt Funds Management, said during the year the New Zealand 10 Year Government Bond yield went from 1.2 per cent to 2.4 per cent - the key discount rate rose sharply.

It was a bad year for bond investors and the sharemarket has done well to hang in there with inflation taking hold, he said.

"The high-growth stocks have done well and high-yielding dividend stocks have been an alternative to bank deposits. But next year you'll see a shift to cyclical stocks whose earnings will benefit more in the inflationary environment."

Two of the market's newest listings closed out the year with rises. Winton Land collected 6c to $3.80. Transport and Logistics software firm Trade Window gained 5c or 2.17 per cent to $2.35 and has increased more than 22 per cent in three days trading.

The market's most expensive stock Mainfreight finished the year at $93.90, up $1.60 or 1.73 per cent; SkyCity Entertainment gained 4c to $3.12; DGL Group increased 7c or 2.17 per cent to $3.30; and New Zealand King Salmon Investments collected 4c or 2.99 per cent to $1.38.

Retirement village operators Summerset Group Holdings was up 21c to $13.68, Arvida gained 2c to $197; and Ryman Healthcare was down 9c to $12.25.

Fisher and Paykel Healthcare declined 24c to $32.76; Fletcher Building decreased 8c to $7.33; Spark shed 10c or 2.16 per cent to $4.52; Freightways was down 14c to $12.85; and Genesis Energy lost 4.5c to $2.86.