The prospect of further interest rate rises later this week unnerved the New Zealand sharemarket, which fell more than one per cent, with some dividend-paying energy and property stocks being hit.
The S&P/NZX 50 Index slipped all day, closing at 11,932.03 – down 134.24 points or 1.11 per cent. The index has fallen more than 8.5 per cent so far this year.
There were 51 gainers and 88 decliners on the main board of 189 stocks, with 44.27 million shares worth $141.98m changing hands.
Shane Solly, portfolio manager with Harbour Asset Management, said United States interest rates rose again on Friday night, and "our market was anxious over whether the Reserve Bank will hike the official cash rate by half a per cent". This flowed through to interest-rate sensitive stocks.
He said there was also continuing slowing activity in the global economy – not helped by the extended Covid lockdown in Shanghai, which is causing some social unrest, and talk of Russia intensifying its actions in Ukraine.
The Reserve Bank releases its latest monetary policy review on Wednesday, and all eyes will be on a 25- or 50-basis-point increase in the official cash rate. The bank has already hiked the cash rate three times since early October to 1 per cent, from 0.25 per cent.
The New Zealand 10 Year Government Bond yield increased 5.8 basis points to 3.507 per cent, and the US 10 Year Treasury Note yield was up 11 basis points to 2.77 per cent.
Among the dividend stocks, Meridian Energy fell 11.5c or 2.3 per cent to $4.788; Mercury was down 10c to $6.13; although Contact was up 15c or 1.91 per cent to $8.
Meridian and Contact may also be affected by this week's rebalancing in the iShares Global Clean Energy Exchange Traded Fund.
Among the property stocks, Precinct Properties was down 3.5c or 2.23 per cent to $1.535; Property for Industry declined 6.5c or 2.34 per cent to $2.71; Goodman Property Trust decreased 3.5c to $2.365; and Stride shed 3c to $1.95.
The a2 Milk Company was down 25c or 4.55 per cent to $5.24 following reports that several Chinese competitors have developed their own a2 infant formula variants and are increasing their marketing spend.
Fisher and Paykel Healthcare declined 79c or 3.3 per cent to $23.16; EBOS Group was down $1.90 or 4.5 per cent to $40.30; Freightways shed 16c to $12.40; Hallenstein Glasson decreased 20c or 3.13per cent to $6.27; Skellerup Holdings dropped 15c or 2.61 per cent to $5.60; and Delegat Group was down 20c to $13.
Other decliners were SkyCity Entertainment, down 5c to $2.82; Pacific Edge decreasing 3c or 3.13 per cent to 93; Harmoney falling 5c or 3.33 per cent to $1.45; Vulcan Steel shedding 17c to $9.59; Scales Corporation losing 15c or 2.94 per cent to $4.95; and Scott Technology down 9c or 2.76 per cent to $3.17.
Air New Zealand had a strong day, with its ordinary shares gaining 4.5c or 5.63 per cent to 84.5c (theoretical ex-rights price 77.5c) and the rights rising 3.5c or 7 per cent to 53.5c (reference price 49c). The Air New Zealand management made a presentation to Sharesies investors last week.
Summerset Group reported its second highest sales quarter of 279 – comprising 167 new and 112 resales for the three months ending March. A total of 251 units remain unsold and Summerset is building three new retirement villages, at Cambridge, Waikanae and Blenheim, and has 13 under construction. Summerset's share price was unchanged at $11.70.
Spark, unchanged at $4.84, has gone to the market seeking an investor in Spark TowerCo and its 1263 cell sites. Spark will maintain a shareholding, but competitor Vodafone, half-owned by Infratil, is seeking to sell its 1500 cell towers for around $1 billion.
Napier Port, down 5c to $2.91, told the market container volumes decreased 16.6 per cent and bulk cargo was down 8.7 per cent for the six months ending March because of supply chain disruption and labour shortages. Log export volumes fell 20.5 per cent.
The port company now expects half-year operating earnings of $16.4m, down from $21.3m in the previous corresponding period, and full-year earnings of $38m-$42m, less than the previous guidance of $43.8m.
Ventia Services Group increased 10c or 3.52 per cent to $2.94 after being awarded a 15-year contract to manage the Sydney Harbour Tunnel and the yet-to-be-built Western Harbour Tunnel. The contract, with two 10-year extension options, will generate about $450m in revenue.
Other gainers were My Food Bag, rising 3c or 2.94 per cent to $1.05; Sanford up 11c or 2.36 per cent to $4.78; Allied Farmers surging 7c or 8.97 per cent to 85c; and Cannasouth increasing 2.5c or 7.58 per cent to 35.5c.