Strong half-year results from leading stocks Fletcher Building and Ebos Group provided a boost to the New Zealand sharemarket, but its latest gain was hindered by a further rise in long-term wholesale interest rates.
The S&P/NZX 50 Index rose 63.25 points or 0.5 per cent to 12,673.97, spurred by further buying in Contact Energy and Meridian. There were 80 gainers and 67 decliners over the whole market on solid volume of 67.6 million share transactions worth $207.62 million.
Matt Goodson, managing director of Salt Funds Management, said there were very solid results from Fletcher Building and Ebos as expected, but the latest lift in bond yields will impact on the interest rate-sensitive stocks.
"There was also an interesting lead from the Australian ASX which had a negative reaction to good results over there and was down nearly half a per cent (at 5.45pm NZ time)," he said.
The US 10-year Treasury yield climbed 9.9 basis points to a one-year high of 1.298 per cent, the biggest one-day rise since November. The New Zealand 10-year Government Bond yield has risen from 0.5 per cent in September to the present 1.53 per cent.
Fletcher Building, with its residential division performing well, rose 5c to $6.50 after showing its business was in much better shape. The country's biggest construction company reported a 1 per cent increase in revenue to $3.98 billion, a 47 per cent rise in operating earnings (ebit) to $323m and a 48 per cent climb in net profit to $121m for the six months ending December.
Fletcher is paying an interim dividend of 12c a share on March 24, and is delivering $150m-plus annual gross cost reductions in the 2021 financial year.
Ebos Group closed down 6c to $29.11 after touching $30 earlier in the day, following another record half-year result. Revenue increased 6.3 per cent to $4.65b, net profit rose 13.7 per cent to $92.9m, and Ebos is paying an interim dividend 42.5c a share – an increase of 13.3 per cent - on March 18.
Ebos, which supplies healthcare and animal care products, said the robust trading conditions that drove the 2021 first half performance remain in place – January trading matched the earlier growth.
Goodson said there appeared to be further buying in Contact Energy and Meridian by the offshore clean energy passive funds. Contact increased 26c or 3.69 per cent to $7.31 on trade worth $20.5m, and Meridian climbed 32c or 5.49 per cent to $6.15 on trade worth $917.5m.
Mercury was down 3c to $6.60, while Tilt Renewables was up 27c or 4.27 per cent to $6.6.60, and Trustpower gained 10c to $8.70.
Amongst the blue chips, Fisher and Paykel Healthcare fell 15c to $32.25; Chorus decreased 10c to $8.27, Freightways declined 17c to $10.86; while a2 Milk was up 21c or 1.95 per cent to $10.98, Ryman Healthcare climbed 38c or 2.46 per cent to $15.80, and Summerset Group Holdings gained 9c to $13.02.
NZX gained 1c to $2 after reporting a 12.8 per cent rise in revenue to $78.42m, a 9.7 per cent increase in operating earnings to $34.4m, and a 20 per cent climb in net profit to $17.58 for the year ending December. The NZX experienced record trading levels with a 41.8 per rise in value traded to $53.7b, and is paying a dividend of 3.1c a share on March 26.
Dual-listed Westpac Banking Corporation rose $1.31 or 5.41 per cent to $25.52 in improved December quarterly profit of A$1.7b ($1.83b) and a writedown of A$501m in previously recorded impairments.
Third Age Health Services continued its spurt, up 20c or 8 per cent to $2.70 and rising 22 per cent in the past three trading days. NZME had another strong rise, up 6c or 7.23 per cent to 89c.
Wine exporter Delegat Group recovered 45c or 3.17 per cent to $14.65, and retailer The Warehouse Group shed 9c or 2.74 per cent to $3.20.
Millennium & Copthorne Hotels New Zealand reported a 25 per cent fall in revenue to $172m and a 7.4 per cent drop in net profit to $46m for the year ending December. The results reflected the contribution from its property development including majority-owned CDL Investments, and a significant tax credit. The hotel operations produced gross profit of $1.9m, down 94 per cent on the previous year.
Millennium's share price rose 8c or 3.69 per cent to $2.25, while CDL Investments, which reported a 3.29 per cent decline in revenue to $88.77m and 11.84 per cent fall in net profit to $30m, fell 4c or 3.77 per cent to $1.02.
Good Spirits Hospitality is buying three bars in downtown Wellington for $3.4m and its share price rose 0.006c or 8.11 per cent to 8c.