NZX 50 falls as high New Zealand dollar weighs on exporters

Tuesday, 1 December 2020

Sky Television shares fell after the listed pay-TV company said chief executive Martin Stewart, pictured, was leaving the company after just 21 months.

The New Zealand sharemarket slid from record levels as the high value of the local currency weighed on the outlook for exporters.

The benchmark NZX 50 index fell 0.3 per cent, or 38.610 points, to 12,729.91 on Tuesday. It had ended November at a record high of 12,768.52 on Monday.

“November ended globally one of the strongest months on record, which was certainly a huge rebound in what was a pretty volatile month. And our New Zealand market had a very strong performance but was trading was off a little bit today as we start December,” Chris Smith, the general manager of CMC Markets NZ, said on Tuesday.

“We are seeing a lot of the export-driven companies trading down today as our New Zealand dollar continues to trade at very elevated levels.”

The benchmark NZX 50 index has fallen 0.3 per cent from Monday’s record high.

* NZX slumps after US stocks suffer biggest fall since June

* NZ dollar and NZX miss out on strong rally after Covid-free streak ends

Companies that rely on overseas earnings, including specialty milk marketer The a2 Milk Company, medical device manufacturer Fisher & Paykel Healthcare, and Auckland International Airport, experienced share-price falls.

The dollar has risen above US70 cents, and Westpac’s economics team said in a note published on Tuesday that it expected the upward trend to continue, with the currency likely to hit US74c by the middle of next year.

The a2 Milk Company closed down 3.7 per cent at $14.21 a share, while Fisher & Paykel Healthcare slid 1.1 per cent to $35.51 and Auckland International Airport dropped 1.2 per cent to $7.685.

Shares in Sky Network Television were the most heavily traded on the market on Tuesday, with 7.8 million shares changing hands. The stock dropped 3.6 per cent to 16.2c after the pay-TV company said its chief executive, Martin Stewart, had resigned after just 21 months in the job and would return to Europe. He was replaced by chief commercial officer Sophie Moloney.

“Sky TV has been underperforming for many years, and any change in leader of the business the market will always take with caution,” Smith said.

“It is a bit of a revolving door of CEOs at Sky TV in what is a challenging sector. It’s no surprise the stock is trading lower on unexpected news of a new CEO change and it will take a little bit of time for investors to gain more confidence back in that stock.”

Smith said it was “a mixed bag” on the local market on Tuesday, with many stocks also rising.

Among the gainers, telecommunications company Spark New Zealand increased 1.3 per cent to $4.62 per share, and Pushpay Holdings, which provides a digital payment platform for churches, rose 6.2 per cent to $1.88.