NZ share market unruffled despite Covid worries across the Tasman

Monday, 21 December 2020

The growing community Covid-19 spread in Sydney is deflating our chances of a Trans-Tasman bubble.

The NZX remained steady in the face of a resurgence of Covid-19 in Australia with growing community transmission in Sydney likely to further delay a Trans-Tasman bubble.

The share market closed at 12607.740, down 74.260 points (0.59 per cent) from a high of 12714.360.

Hamilton Hindin and Greene investment advisor Grant Davies said that in terms of tourism stocks, Air New Zealand bore the brunt of the bad news falling 1.67 per cent to $1.77.

On Monday the NSW cluster grew to 83 prompting Australian states to tighten internal border restrictions to prevent spread of the virus, and economists here are predicting that we will likely be waiting longer for the benefits of Trans-Tasman tourism.

The Warehouse saw a slight rise in its share price off the back of a positive trading update in the lead up to Christmas.

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Davies said the outbreak might also have rubbed off on Ryman Healthcare shares which fell 55c (3.6 per cent) to $14.70.

“That’s potentially speculation around their Melbourne villages, although obviously the current issue in Australian is in New South Wales, but maybe some investors are drawing a parallel there and becoming a little bit more concerned.”

In terms of gains, Davies said a few of the power companies, except for Meridian, went up strongly, possibly influenced by speculation about the future of the Tiwai Point aluminium smelter, and the competition report due out on Tuesday.

Contact Energy was up 3.3 per cent to $8.25, and Genesis Energy rose 3.4 per cent to $3.52, while Meridian dropped 1.8 per cent to $6.56.

The Warehouse closed up 3c (1.19 per cent) to $2.55 shortly after announcing its half year net profit after tax was expected to exceed $70m, and it will repay the almost $70 million it received from the Government’s wage subsidy earlier this year.

“That’s good news for The Warehouse in terms of their earnings, but also good news for the New Zealand taxpayer as well,” Davies said.