Sharemarket gains as Vista jumps on improved outlook for cinemas

Friday, 27 August 2021

The sharemarket edged up as investors favoured stocks such as cinema software company Vista Group which benefit as Covid-19 vaccination rates increase, allowing business to re-open.

The benchmark S&P/NZX 50 Index advanced 8.175 points, or 0.06 per cent, to 13,059.79 on Friday.

Vista jumped 8.4 per cent to $2.46, making it the biggest gainer on the NZX.

The company’s first-half loss narrowed to $2.6 million, from $43.2m, after it said blockbuster movies had started returning to cinemas, which were re-opening in its key markets.

Cinema re-openings around the world is good news for Vista Group.

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“Vista has got through the pandemic and investors are looking forward to the cinemas reopening, and in fact 80 per cent of key cinemas are open in the company’s markets,” said Fat Prophets head of research Greg Smith. “It was pretty much a write off last year for the cinema industry as a lot of blockbusters were going straight to streaming but the blockbuster will be back and that is going to be good for Vista.”

Comments from Australian airline Qantas that it expected overseas travel to resume late this year buoyed tourism stocks, Smith said.

On Thursday Qantas said, based on vaccination rate projections and the Australian Government’s plan for reopening borders, it expected flights to New Zealand, Fiji, Singapore, the United States, Japan, United Kingdom and Canada to resume later this year.

Smith said the potential re-opening of the global travel market bodes well for companies like Tourism Holdings, which has been hurt by border closures.

Tourism Holdings, which rents and sells campervans in New Zealand, Australia and the United States, gained 4.7 per cent to $2.44

Port of Tauranga rose 3.2 per cent to $7.38 after reporting full-year profit rose 15 per cent to $102m.

“They are doing quite well despite supply chain disruptions, and the need for expansion,” Smith said. “Logs and kiwifruit are flying out the door and that was a better-than-expected profit.”

Sky Network Television advanced 1.8 per cent to 16.6 cents after announcing it had signed an expanded and extended content deal with WarnerMedia. The agreement secures Sky’s existing content rights to shows and movies owned by HBO and its parent WarnerMedia, as well as the HBO shows that currently stream on HBO Max overseas.

Limiting further gains for the benchmark, was the continued decline in The A2 Milk Company following a disappointing full-year result on Thursday and ongoing uncertainty about the outlook for its key Chinese market.

A2 fell 3.9 per cent to $6.09, following the stock’s 11 per cent decline on Thursday.

Smith said some investors had been hopeful that A2’s daigou trade to China had improved, which wasn’t the case and there was concern competitive pressures were intensifying for the company.

Asian stock markets were mixed on Friday as investors awaited more guidance on the US Federal Reserve's easing plans.

Fed Chair Jerome Powell is scheduled to speak at the central bank's annual symposium in Jackson Hole, Wyoming, later on Friday. Any indicators when the bank will start scaling back on asset purchases will be watched.

Several Fed officials have suggested that the easing will take place sooner rather than later, although a firm timeline has not been set.

Wall Street indexes fell on Thursday after two suicide bombers and gunmen attacked the desperate crowds trying to flee Taliban-controlled Afghanistan.

Technology and communication companies led the broad sell-off, with 10 of the 11 sectors in the S&P 500 closing lower. The benchmark fell 0.6 per cent to 4,470 and broke its five-day winning streak.

– With AP