New Zealand market falls nearly 2% on global currency volatility

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The New Zealand market was closed yesterday for the Queen Elizabeth Memorial Day holiday, but fell nearly 2% today due to global equity and currency market volatility.

Tuesday, September 27, 2022, 5:55 p.m.

by Business Desk

The S&P/NZX 50 Index fell 220.3 points, or 1.9%, to 11,214.49. Revenue was $156.2 million, higher than recent low volumes.

Devon Funds chief wealth officer Greg Smith said the New Zealand market was still holding up better than global markets – although the New Zealand market was still down almost 2%.

“Currencies have been a big talking point,” he said. “We saw a strong US dollar, the pound plummeting and many other currencies weaker as well, including the New Zealand dollar.”

Export stocks were increased due to the continued fall in the New Zealand dollar, he added.

But although major export healthcare maker Fisher & Paykel rose 1% earlier in the afternoon, the company’s stock fell 1% to $18.91 at the end of the month. the day.

Dairy exporter A2 Milk, however, rose 1.8% to $6.10, while global cinema software provider Vista Group rose 1.9% to $1.64.

Smith said it was interesting that Air NZ was down today – down 3.4% to 70.5 cents – as fuel prices had “cratered” over the past few months.

The Warehouse releases its full year results tomorrow and the stock was down 0.3% at $3.44.

Today, Briscoe Group was down 0.4% at $5.30 and KMD Brands was down 0.9% at $1.05. Michael Hill jumped 2.3% to $1.31.

Contact Energy fell 0.9% to $7.75. The energy retailer today confirmed that the company is offering up to $200 million in five-and-a-half-year fixed-rate, unsecured and unsubordinated green bonds to institutional investors as well as neo-retail investors. -zeelandish.

The $200 million offering also has the ability to accept up to an additional $50 million in oversubscriptions at Contact’s discretion, the company said.

Synlait Milk reported a jump in net profit for the full year this morning and said it was on track to return to “solid” profitability.

Net profit was $38.5 million in the 12 months to July 31, compared with a loss of $28.5 million in the same period a year earlier.

Smith said it was a positive result and it was good to see the company had strong cash flow. Synlait was down 5.3% at $3.37 in the early evening.

Fonterra Dairy Cooperative Shareholders’ Fund units fell 1.5% to $3.35.

Agribusiness group Scales Corp fell 6.8% to $4.66 after announcing plans to expand its global pet food and edible protein division into Australia in a $27 investment. million Australian dollars (30.8 million New Zealand dollars).

Chief Executive Andy Borland said the $27 million investment demonstrates Scales’ commitment to expanding its geographic reach as well as its product line.

“As demand for protein increases, access to global supply and key growth markets is becoming increasingly important,” he said in a statement.

Ad company Good Spirits Hospitality fell 10.6% to 4.2 cents in very light volume. Vulcan Steel also fell 5.9% to $7.72.

Vulcan Steel founder Peter Wells told NZX earlier this month that he was retiring after 27 years in the role.

The pound falls to a new low

BNZ interest rate strategist Nick Smyth said since Friday the UK had become the ‘centre of attention’ after the new government’s chancellor, Kwasi Kwarteng, announced a major fiscal spending package with significant tax cuts.

Smyth said the announcement drove people away from the pound, causing it to fall to an all-time low against the US dollar.

Today, the GBP was trading at US$1.074 at 3 p.m. Wellington, down from US$1.122 on Friday.

“The market response to the tax package has been a definite boost,” Smyth wrote in a note today.

ASB Chief Economist Nick Tuffley summed up the reaction to the fall in sterling in one word this morning: pounded.

“The events triggered by the UK draw much more attention to the fiscal fragilities of indebted governments in a rising interest rate environment,” he said in a note.

Tuffley said the Governor of the Bank of England had also made it clear that the BoE would not raise interest rates to defend the pound, which in turn could weaken the pound.

The New Zealand dollar was trading at 56.87 cents US at 3pm in Wellington today, down from 58.45 cents on Friday.

Tags: Market close

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