Sharemarket shrugs off profit results, follows overseas markets lower

Wednesday, 19 May 2021

The sharemarket shrugged off some “reasonable” profit results, and drifted lower in line with overseas markets.

The benchmark S&P/NZX 50 Index slipped 147.116 points, or 1.18 per cent, to 12,281.50 on Wednesday.

“The market is just drifting a little bit at the moment and is in need of some positive momentum,” said Hamilton Hindin Greene investment adviser Grant Davies. “The results that we have had out today were reasonable but we had a weak lead from the US overnight and good results are not always going to move the market.”

Still, Davies said long-term investors would be more concerned about profit results rather than what the market was doing on any given day.

* Kathmandu profit down $49m due to Covid-19

* Rip Curl's wave will take Kathmandu into global waters (mind the sharks)

Aeroplanes were grounded and travellers stayed home during lockdown in April 2020.

Serko fell 6.7 per cent to $6.25 after the corporate travel technology company posted a full-year loss of $29.4 million in the year to the end of March, from a $9.4m loss the previous year.

The company said its travel booking volumes slumped 63 per cent as business travel came to an abrupt halt due to the Covid-19 pandemic, but it was now seeing a pick up in Australia and New Zealand, and expects the regional market will fully recover in the year to the end of March 2023.

Davies said Serko’s share price had increased leading up to the result, and had now slipped back to its previous levels.

“Maybe it wasn’t as positive as some of those buyers hoped for, but it was reasonably solid considering the 12 months that they have been through,” he said.

The benchmark index drifted lower even though profit results were reasonable, analysts said.

Argosy Property fell 2.6 per cent to $1.51 after posting a full-year profit of $241.7m, a lift of 102 per cent over its profit of $119.1m the year before.

Davies said the company was “trucking along reasonable well”.

Infratil slipped 0.1 per cent to $7.29. The infrastructure investor posted a net loss of $49.2m for the year to March, driven by unrealised energy derivative losses at Trustpower, and an increase in management incentive fees.

Hamilton Hindin Greene analyst Jeremy Sullivan said it was a mixed result, reflecting in part the many businesses it was diversified across, but investors would be pleased with a slight increase in dividend to 11.5 cents per share.

The underlying business units themselves were largely stable, Sullivan said.

Kathmandu Holdings gained 0.6 per cent to $1.60 after announcing Michael Daly as its new chief executive, replacing Xavier Simonet. Daly has headed the company’s Rip Curl brand for eight years.

Davies noted the retailer’s shares touched $1.62 in intraday trading, their highest level since the Covid-19 pandemic pulled the rug out from under them in March last year.

“They were one of the hardest hit initially from the Covid sell-off,” Davies said. “Now their share price has recovered and there’s some good positive momentum.”

Stocks closed lower on Wall Street on Tuesday as a late-afternoon sell-off in technology companies helped nudge stock indexes into the red for a second straight day.

Japan's benchmark Nikkei 225 fell 1.4 per cent in morning trading to 28,008.09. Australia's S&P/ASX 200 slipped 1.9 per cent to 6,936.00. The Shanghai Composite slipped 0.4 per cent to 3,513.61. Markets were closed in Hong Kong and South Korea.

– With AP