New Zealand market share drops 0.4%, restaurant brands join fall with 1.9% loss
Investors sent shares of operator KFC Restaurant Brands down 1.9% after news announced that two key figures would retire in 2023.
The New Zealand stock market fell 50 points on Wednesday but held off the biggest declines seen overseas.
The benchmark S&P/NZX50 index closed down 0.4% at 11,548 after a slight loss of 0.1% on Tuesday.
CMC Markets analyst Tina Teng said the NZX had been under pressure in recent days as global stock markets resumed selling.
The selloff was driven by a resurgence in global bond yields, deteriorating Chinese economic growth prospects and the European Union’s energy crisis, she said.
* Contact Energy invests $300 million in Taupō’s fourth power plant
* Dairy prices rebound at auction, halting five straight declines
* New Zealand market share down 0.1%, Infratil pulls back from new high
Investors were fairly risk averse despite the positive corporate outlook during the recent reporting season.
“But the NZX continues to outperform major global indices recently, with some quality stocks remaining strong, such as a2 milk, Infratil, Spark and Chorus.”
Despite their recent gains, these stocks mostly broke their winning streak on Wednesday. A2 Milk fell 2.6% to $6.18, Infratil lost 1.1% to $9.40 and Spark was down 0.4% to $5.41, while Chorus was up 0, 7% to $8.01.
Greg Smith, head of retail at Devon Funds, said Fisher & Paykel Healthcare recovered somewhat on Wednesday, but traded at levels not seen since before Covid hit.
Fisher & Paykel Healthcare rose 1.5% to $19.20, after falling to $18.90 on Tuesday.
“It had a few days down,” he said.
Fisher & Paykel Healthcare had good business before Covid, Smith said, and it received a huge boost from demand for its products in hospitals around the world when the pandemic hit.
Hospitalizations were now declining, raising questions about what his income would look like in the future.
Last month, Fisher & Paykel Healthcare said first-half profits could fall as much as 62% due to slowing demand from hospitals for its breathing aids.
Fast food operator Restaurant Brands fell 1.9% to $8.05, its lowest level since March 2020. The local owner of KFC and Pizza Hut franchises said Wednesday that chief executive Russel Creedy and director financier Grant Ellis would retire in early 2023.
Creedy first joined the company in 2001 as Supply Chain Manager and also served as Managing Director of Pizza Hut in New Zealand. He was named CEO in 2007.
“They’ve been a bit under the pump, struggling to pass on costs, they haven’t shown much pricing power,” Smith said.
Among energy stocks, Meridian Energy fell 0.3% to $4.87, Mercury Energy lost 0.8% to $5.99 and Contact Energy fell 0.6% to $8.04.
There were 96 declines and 44 rises in the market.
Australia’s S&P/ASX200 index closed 1.4% lower at 6729, and stocks were mostly down across Asia as pessimism prevailed about an upcoming interest rate hike.
Earlier, Wall Street stocks tumbled ahead of a holiday-shortened week. The benchmark S&P 500 fell 0.4% to 3908.19 after bouncing between a 0.5% gain and a 1% loss.
The Dow Jones Industrial Average fell 0.6% to 31,145.30 and the tech-heavy Nasdaq lost 0.7% to 11,544.91.
The major indexes have just had their third consecutive week of declines, part of a late summer slump that erased much of the benchmark S&P 500’s gains from July and early August.
Oil prices have fallen. Brent, the international standard, fell US$1.34 to US$91.49 a barrel.