NZ shares slip again with Air New Zealand hit hard

Friday, 6 March 2020

New Zealand's sharemarket has closed down 1.8 per cent after a solid morning recovery fizzled out during afternoon trading.

Air New Zealand shares were hammered again, closing down 5.5 per cent at a new three-year low of $2.06.

However, local stocks still fared better than on Wall Street overnight, where the Dow Jones Industrial Average plunged 3.5 per cent after continued uncertainty over the coronavirus, also known as Covid-19.

Friday's drop followed two weeks of downward pressure in global sharemarkets, with the NZX-50 now down more than 1 per cent every day bar two since February 25.

The NZX-50 has reacted to negative cues from Wall St.

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Hamilton Hindin Greene investment adviser Jeremy Sullivan says investors need to consider their risk profiles during periods of uncertainty.

Jeremy Sullivan, investment adviser at Hamilton Hindin Greene, said the New Zealand sharemarket was reacting to the negative cues coming out of Wall St overnight.

'It's more of the same, really. People are still adjusting to the disruption in supply and what it will mean for the rest of the world as the virus continues to spread,' he said.

Sullivan's advice for investors was to consider how much risk they could take on board, and how soon they needed money from their investments.

'If you are concerned about your portfolios then maybe you are taking too much risk,' he said.

While today's drop was across the board, some industries would be struggling more than others, Sullivan said.

'One airline in the United Kingdom collapsed overnight and the cruise ship industry is struggling, and all the tourism operators.

'Logging is also struggling. But you would also expect to see a boost for healthcare stocks and supermarkets as well. They will be doing a roaring trade,' he said.

Napier Port, which listed on the NZX last year, reported on trading conditions resulting from coronavirus on Friday.

While trading had to date been in line with expectations, due to current market conditions and uncertainty around the duration of the virus' impact, the port expected a slowdown in log exports, with possible impacts on other cargo trades.

'While we are unable to quantify the potential financial impact at this time, these conditions represent a materially increased risk to the achievement of previous earnings forecasts,' chief executive Todd Dawson said.

Sharesies co-founders Leighton Roberts says companies will develop new strategies to cope with the current uncertain times.

Sharesies co-founder Leighton Roberts said if anything, the current volatility proved just how hard it was to pick whether the market had hit the bottom or the top.

'What we are saying to investors is stick to your strategy, whatever it was before this all happened,' Roberts said.

'We are in a period of huge uncertainty, with the coronavirus and the United States elections and the market is just reflecting that back to us.'

If there was ever a time not to look at the market every day, then this was it, he said.

Roberts said the sharemarket situation would become clearer in time as companies adjusted to the current challenges.

'Companies are really good at adjusting strategies to uncertain times. They will be doing that now.'