Market close: Property stocks tumble as bond yields rise

The interest rate sensitive property stocks tumbled on the back of rising bond yields but overall the New Zealand sharemarket steadied itself from recent falls and went the other way.

The S&P/NZX 50 Index gained significantly in late trading, closing 59.96 points or 0.5 per cent ahead at 12,145.15 after reaching an intraday low of 12,057.9. There were 73 gainers and 68 decliners over the whole market with 66 million shares worth $211.2 million changing hands.

Matt Goodson, managing director of Salt Funds Management, said the market has a flighty and heavy feel about it. “You are getting 3/4/5 per cent price movements for no obvious reason.

“Mercury is down nearly 3 per cent and Meridian is up 4 per cent on no fundamental news. They are large predictable businesses, yet their share price is exceedingly volatile. At the moment there’s not a lot of breadth across the market,” he said.

Overnight, the US 10-Year Treasury yield spiked to a one-year high of more than 1.61 per cent after the Senate passed a US$1.9 trillion ($2.66t) Covid relief package – and the local property stocks were impacted.

Goodson said there has been an ongoing rotation out of the property stocks because of the continued pressure on bond yields. New Zealand has had a delayed reaction to the performance of the stocks compared with Australia and they have returned to more appropriate price levels.

Argosy Property fell 5c or 3.38 per cent to $1.43; Investore which owns bulk retail buildings was down 6c or 2.88 per cent to $2.02; Vital Healthcare, owner of private hospitals, declined 5.5c or 1.86 per cent to $2.895; and Goodman Property Trust decreased 2.5c to $2.19.

Stride Property fell 7.6c or 3.56 per cent to $2.06; Property for Industry was down 6c or 2.11 per cent to $2.78; and Precinct Properties which is a planning a $200m hotel and office redevelopment of the former HSBC building facing the Auckland waterfront declined 2.5c to $1.60.

More than 8 million units worth $11.4m were traded in the Smartshares NZ Property Exchange Traded Fund and its price fell 4.2c or 2.89 per cent to $1.409.

Energy stocks Meridian rose 21c or 4.08 per cent to $5.36; Contact gained 17c or 2.54 per cent to $6.85; Genesis was up 13.5c or 3.69 per cent to $3.795; Vector increased 11c or 2.72 per cent to $4.15; Trustpower picked up 8c to $8.15; and Tilt Renewables climbed 10c to $6.25. But Mercury fell 17c or 2.74 per cent to $6.03.

Market leader Fisher and Paykel Healthcare continues to have big swings, this time for the better after rising 95c or 3.47 per cent to $28.29.

Fletcher Building climbed 12c or 1.83 per cent to $6.68; insurer AMP was up 5c or 3.29 per cent to $1.57; kiwifruit grower and packer Seeka gained 7c to $4.85; cinema software firm Vista Group rose 9c or 5.33 per cent to $1.78; and The Warehouse Group increased 6c or 1.85 per cent to $3.30.

Third Age Health Services, one of the recent new listings, is also having a spurt, rising 21c or 8.97 per cent to $2.55 after announcing a special dividend. The latest listing My Food Bag is settling at a level around $1.70 after pricing its IPO at $1.85. It gained 2c to $1.72.

Mobile marketing firm Plexure Group increased 4c or 4.49 per cent to 93c after slightly upgrading its forecast for the 2021 financial year ending March. Plexure said its revenue is expected to be $29.2m instead of $29m and $4m or 15.8 per cent heads of the previous year’s result. Its operating earnings (ebitda) loss of $5.6m is $1.4m or 20 per cent less than originally.

On Wall Street, the Dow Jones Industrial Average reached a record intraday high before finishing its latest trading day at 31,802.44, up 306 points or 0.97 per cent. The technology-heavy Nasdaq Composite went into correction territory after falling 2.41 per cent to 12,609.16 – dipping more than 10 per cent from its February 12 high of 14,095.47.

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