Eyes on Aussie interest rate
“The market awaits Tuesday’s meeting of the Reserve Bank of Australia, and there’s an even chance they will hike interest rates. If they do that, it will lead to further weakness in the NZ dollar. Central banks are being placed in a difficult position by the oil crisis.”
Brent Crude oil had climbed to US$104.7 ($151.65) a barrel at 5.30pm NZ time.
Finance Minister Nicola Willis said a worst-case scenario, assuming a long Middle East conflict, would see inflation rising from 3.1% to 3.7% but peaking lower than the current Australian rate of 3.8%.
The NZ dollar weakened against the American greenback to US58.07c, and was at A82.88c against the Australian.
Goodson said despite uncertainty, the US dollar was apparently the safe haven “for reasons that are beyond my pay grade”.
Local stocks
Fisher & Paykel Healthcare led the market down, falling 59c to $38.35, a2 Milk was down 11c to $11.44; SkyCity declined 2c (2.52%) to 77.5c; Vista Group fell 14.5c (7.44%) to $1.805; Sky TV decreased 8c (2.45%) to $3.19; and Tourism Holdings shed 8c (3.45%) to $2.24.
Auckland International Airport was down 12c to $8.29 after reporting a 5% increase in total passengers to 1.61m during February. International passengers increased 3% to 873,163 and domestic rose 7% to 739,295.
Air New Zealand, hit by rising fuel costs, was at its lowest level in more than 20 years after declining 1.5c (3.33%) to 43.5c.
KMD Brands declined 3c to 20.5c after confirming that Goldman Sachs is assisting with its treasury and capital management plan as part of an ongoing review of funding options. The group is in discussions with lenders on the refinancing of its long-term debt facilities.
Other decliners were Metro Performance Glass, falling 15c (12.5%) to $1.05; Santana Minerals down 6c to 94c; Manuka Resources decreasing 2.1c (13.13%) to 13.9c; and Move Logistics shedding 1.5c (6.25%) to 22.5c.
Fuel importer Channel Infrastructure increased 8c to $2.94, with broker Forsyth Barr saying it is probably the most defensive stock listed on the NZX in the current geopolitical environment.
Other gainers were Ebos Group up 37c to $22.64; Chorus increasing 17c (1.9%) to $9.11; Mainfreight collecting $2.30 (3.8%) to $62.80; Spark adding 4c to $2.29; and Skellerup up 12c (2.17%) to $5.64.
Comvita sweet
Manuka honey producer Comvita, gaining 2c to 72c, upgraded its full-year operating earnings (ebit) guidance to $15.5m, from $14.3m, after Chinese Lunar New Year trading was better than expected.
Comvita said there were solid performances across key Asian markets and the North American club retail partnership.
Goodson said it was a surprise earnings upgrade. Comvita was on its knees, but had a reasonable sales period, notwithstanding soft consumer sentiment.
“The whole manuka honey sector has been through a challenging period and Comvita is better placed than others. By slashing costs and making more sales, it may just push through the other side.”
Energy stocks
Meridian Energy, up 3c to $5.38, told the market that inflows eased in February, the first below-average month for half a year.
Meridian’s February retail sales were 2.7% lower than the same month last year on lower irrigation demand, and customer numbers increased 2.1%, lifting yearly growth to nearly 20%.
Mercury Energy, gaining 6c to $6.40, is planning a $200m offer of seven-year, fixed-rate green bonds with the ability to accept up to $50m of oversubscriptions.
Fonterra chief executive Miles Hurrell has resigned after 25 years working at the co-operative, and has given six months’ notice.
Fonterra Co-operative’s share price was down 3c to $2.25, and Fonterra Shareholders’ Fund decreased 17.3c or 2.09% to $8.12.
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