Market close: NZ sharemarket sinks to seven-month low

The S&P/NZX 50 Index has fallen 4.16 per cent this year. Photo / NZME

An ailing New Zealand sharemarket has now reached its lowest level in seven months after suffering its eighth fall in 12 trading days this year.

The S&P/NZX 50 Index fell 115.21 points or 0.91 per cent to 12,497.10, just below the close of 12,499.36 on June 21 last year.

Buffeted by the spectre of rising inflation, the index has fallen 4.16 per cent this year – and it is now more than 6 per cent below the 12-month high of 13,337.27, set on October 4 last year.

There were 98 decliners and 44 gainers across the whole market, and many investors are sitting on their hands as volumes were again light, with 32.99 million shares worth $111.8 million changing hands.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said: "We have had a massive amount of printing money to stimulate the economy, and New Zealand isn't going to allow inflation to get as high as in the United States (at 7 per cent). This affects the valuation of growth and income stocks."

He said this year may be tough for investors, but there will be buying opportunities, such as the retirement village sector.

"Ryman Healthcare has fallen more than 30 per cent in the last four months while house prices have headed in the opposite direction. Quite a lot of value is appearing in the market, and investors will be looking ahead to the reporting season [next month]."

ANZ Research now expects inflation to be running at 6 per cent, up from 4.9 per cent, with a 1.5 per cent rise in the consumer price index for the December quarter. The bank said: "The actual number is highly uncertain, but what's clear is that the inflation dragon, which has been asleep for decades, has well and truly awoken. Aggressive action by the Reserve Bank will be needed for inflation to be tamed."

Stats NZ reported that annual food prices rose 4.5 per cent in December compared with the same period a year ago – the highest increase since September 2011, with 4.7 per cent.

Ryman Healthcare fell 42c or 3.65 per cent to $11.08, its lowest level since early April 2020; and fellow retirement village operator Summerset Group Holdings was down 45c or 3.49 per cent to $12.43.

Rural services firm PGG Wrightson rose 30c or 5.57 per cent to $5.69 as record milk payments are encouraging further investment on the farms.

Eftpos provider Smartpay Holdings climbed 11c or 15.49 per cent to 82c after experiencing strong growth in the third quarter ending December. Group revenue year-on-year rose 43 per cent, with the Australian business having a record December.

Mainfreight was down $1.30 to $87.60; EBOS Group fell 88c or 2.2 per cent to $39.10; Mercury Energy decreased 12.5c or 2.06 per cent to $5.96; Auckland International Airport declined 9c to $7.41; and Port of Tauranga declined 5c to $6.55.

Napier Port was down 2c to $2.96 after reporting trading for the first quarter ending December. Bulk cargo of 980,000 tonnes increased 3.4 per cent with log exports rising 5.4 per cent compared with the same period a year ago. Container cargo was down 7.7 per cent to 53,000 TEUs (20 foot equivalent units), from 57,000 mainly because of less container repositioning.

Among other decliners, Sanford was down 22c or 4.4 per cent to $4.78; Air New Zealand gave up 3.5c or 2.33 per cent to $1.465; SkyCity Entertainment decreased 7c or 2.31 per cent to $2.96; Bremworth declined 3c or 4.48 per cent to 64c; and TradeWindow fell 31c or 12.16 per cent to $2.24.

Infratil was down 11c to $8.05; Briscoe Group lost 8c to $6.55; Delegat Group declined 25c to $14.05; Restaurant Brands decreased 18c to $14.47; Serko fell 11c or 1.83 per cent to $5.90; and Marlin Global fund was down 5c or 3.45 per cent to $1.40.

Meridian Energy gained 4c to $4.65; Carbon Fund increased 5c or 2.27 per cent to $2.25; Ventia Services Group collected 6c or 2.61 per cent to $2.36; and Vulcan Steel stopped its slide, gaining 5c to $9.80.

The country's biggest kiwifruit grower Seeka increased 7c to $5.27 after announcing a 2021 full-year dividend of 13c a share to be paid on February 23.

Online personal lender Harmoney rose 5c or 2.72 per cent after reaffirming its full-year guidance of at least $600m loan book, annual growth of 20 per cent, and revenue of at least of $92m, up 16 per cent.

Medicinal cannabis firm Rua Bioscience gained 1.5c or 3.09 per cent to 50c after shareholders voted in favour of buying Zalm Therapeutics for $10m through the issue of new Rua shares at 41c a share.