The New Zealand sharemarket is presently proving hard to please. Solid company results continue to flow through, and instead the market has shrugged its shoulders and neared correction territory with its 13th drop in 16 trading days this month.
The S&P/NZX 50 Index was down 37.39 points or 0.3 per cent to 12,388.84, just short of the 10 per cent correction mark after hitting an all-time high of 13,558.19 on January 8.
There 55 gainers and 89 decliners over the whole market on heavy volume of 61.7 million share transactions worth $214.57 million.
Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said the market has neared a technical correction smack bang in the middle of the reporting season.
"It's ironical. The reporting season has been holding up nicely and you can't blame the companies' performances. It doesn't warrant a 10 per cent reduction in our index, but our market is more focused on rising interest rates.
"The increase in the bond yields in United States have flown over here and our red-hot housing market is increasingly becoming unsustainable – a clampdown on investors may result in a rise in interest rates next year. We also have the strength of the NZ dollar and overseas investors may be taking advantage of that and bringing their money back home," Sullivan said.
There was a wad of company financial results. Mercury Energy and Vector both fell, even though they produced half-year profit increases.
Vector was down 15c or 3.55 per cent to $4.07 after reporting a 26.8 per cent rise in profit of $102.13m on revenue of $647.8m, down 7.4 per cent, and it is paying an interim dividend of 8.25c on April 8. Vector increased its 2021 full-year operating earnings guidance to $500m-$520m, up from $480m-$500m.
Mercury fell 23c or 3.61 per cent to $6.15 after lowering its 2021 operating earnings forecast to $520m, from $535m because of the dry weather in the Taupo catchment and a decrease in hydro generation. Mercury's half-year profit surged 56.6 per cent to $130m on revenue of $944m, and it is paying an interim dividend of 6.8c a share on April 1.
Summerset Group Holdings, with 32 retirement villages and nearly 6000 units in New Zealand and Australia, gained 22c to $12.79 after its solid result for the year ending December. Revenue was up 12 per cent to $172.42m and net profit increased 32 per cent to $230.8m, though underlying profit slipped 7.4 per cent to $98.3m because of the cost of keeping its residents safe during the Covid pandemic. Summerset is paying an interim dividend of 7c a share on March 22.
The NZ dollar was down a touch to US73.17c against the American greenback after rising to US73.39c the day before. Global exporter Fisher and Paykel Healthcare fell to an eight-month low of $30.57, down $1.30 or 4.08 per cent, after sitting at $30.25 on June 23 last year.
Ebos Group climbed 55c or 1.96 per cent to $28.55 after its mauling the day before; Port of Tauranga rose 19c or 2.65 per cent to $7.35; Ryman Healthcare was up 24c to $15.29; Briscoe Group picked up 14c or 2.47 per cent to $5.80; and T&G Global increased 8c or 2.76 per cent to $2.98.
Genesis Energy was down 8c or 2.27 per cent to $3.44, Tilt Renewables declined 17c or 2.58 per cent to $6.43; and Chorus fell 20c or 2.57 per cent to $7.57.
Rotation stocks Auckland International Airport climbed 27c or 3.93 per cent to $7.14; Air New Zealand rose 4c or 2.57 per cent to $1.595; and Fletcher Building was up 15c or 2.35 per cent to $6.54.
Longstanding rural services firm PGG Wrightson did warm the market's heart, rising 20c or 5.95 per cent to $3.56. For the six months ending December, PGG's revenue was up 6.4 per cent to $499.3m, operating earnings (ebitda) rose 21 per cent to $42.1m, and profit surged 41.4 per cent to $18m. It is paying an interim dividend of 12 a share on March 24.
Sky Network Television fell 0.008c or 4.4 per cent to 17.4c after producing strong profit growth for the six months ending December. Sky TV's profit surged from $11.9m to $39.58m on revenue of $356.87m, a decrease of 7.3 per cent on the previous corresponding period. The network has 926,530 customers and is finding strong growth in streaming revenue.
Fishing company Sanford has been fined $36,000 in the Christchurch District Court and had its vessel San Waitaki forfeited for bottom trawling in a benthic protected area. Sanford's share price fell 21c or 4.66 per cent to $4.30.