New Zealand shares fell today despite overseas gains, as local investors didn’t buy the news from Michael Hill and Summerset.
The NZX50 index climbed 32.52 points to 9029.13, on turnover of $91 million.
“We’ve had a bit of a weak day, we’ve sort of bucked some trends from the US with the S&P500 reasonably positive but unfortunately the New Zealand market has weakened slightly,” says Hamilton Hindin Greene investment adviser Grant Davies.
The S&P 500 was up 0.9% at 2784.17, while the Dow Jones Industrial Average rose 320.22 points, or 1.3%, to 24,776.70.
Michael Hill, which today announced increased revenue 3.3% from 2017 to $A599.7 million in its 2018 fiscal year, fell 2c to $1.04.
“It’s also currently closing a lot of its US stores across its network, so there's a little bit of right-sizing its business and returning to its core competencies,” says Mr Davies.
Earlier this year, Michael Hill said it would close its loss-making US stores, and also reduce the number of stores in its under-performing Emma & Roe chain.
Summerset today its first-half profit was between $43m and $45m for the six months ended June 30, an increase of as much as 26% from their year earlier.
“A pretty solid update there and that’s really on the back of strong development margins in their retirement village builds,” says Mr Davies.
But the company climbed just 3c to $7.56.
A2 Milk rose 22c to $11.56, while its supplier Synlait Milk was steady at $11.39.
Fisher & Paykel Healthcare fell 23c to $14.91.
PGG Wrightson climbed 3c, or 4.76%, to 66c.
Its ASX-listed counterpart, rural services company Elders, today dismissed media speculation it is poised to make a bid for the company.
“Because it’s in the newspaper doesn’t mean it’s true, we all know that, but it certainly helped PGG Wrightson today,” says Mr Davies.
NBR understands a further announcement on a strategic review announced in October is expected in the next two weeks.
Eroad fell 24c, or 6.88%, to $3.25 after a market update said first-quarter sales were much slower than anticipated due to delayed contracts.
However, Mr Davies says “hopes are pretty high” for the company’s future in the US market because of new laws requiring all long-haul trucks to have electronic logging devices, which Eroad introduced to the US last year.
On the ASX, Xero was down $A0.8c to $A45.45 at 5:05pm NZST.
The company today announced it is losing its chief financial and chief operating officer Sankar Narayan at the end of the calendar year.
Mr Narayan wants to pursue other opportunities and he will be replaced as chief financial officer by Kirsty Godfrey-Billy from October 1.
Tourism Holdings dropped 11c to $6.40, while Steel & Tube sank 3c to $1.49.
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