Entertainment stocks lead market rally
New Zealand shares rose in a broad-based rally, led by entertainment companies as the pandemic appeared to be coming under control in key markets. SkyCity Entertainment Group led the market higher.
Thursday, September 3rd 2020, 6:58PM
by BusinessDesk
The S&P/NZX 50 Index rose 152.07 points, or 1.3 percent, to 12,055.05. Within the index, 32 stocks rose, 12 fell and six were unchanged. Turnover was $236 million.
The benchmark gained as investors bought stocks hit hardest by covid-19 as important export markets appeared to be managing the virus, said Brad Gordon, an investment adviser at Hobson Wealth.
“In key nations it looks like covid is going through a more controlled period; that seems to be adding some confidence,” Gordon said.
Casino and hotel operator SkyCity led the market, rising 6.8 percent to $2.67, after it said it would pay a final dividend in late 2021 if there are no significant adverse changes to the current covid-19 status. Its earnings were at the top end of its June guidance.
Vista Group International rose 4.9 percent to $1.94 after the United States’ biggest cinema chain AMC announced it would have 70 percent of its theatres open by the end of the week.
The cinema software developer has rallied 43 percent since it reported better-than-expected earnings last Wednesday and the popularity of blockbuster release Tenet.
Travel stocks were also winners in the recovery theme: Auckland International Airport rose 3.9 percent to $7.00, while corporate travel management firm Serko rose 4 percent to $3.90.
The gains didn’t reach all parts of the sector, as Tourism Holdings dropped 0.9 percent to $2.18 — due to a fire damaging its Auckland property and 10 motorhomes — and Air New Zealand fell 1.1 percent to $1.355 after a key executive resigned.
Chief commercial and customer officer Cam Wallace resigned to find a role with global scope as the airline is “effectively a domestic carrier for the foreseeable future,” said chief executive Greg Foran.
Hobson Wealth’s Gordon said it wasn’t “a good look” but was understandable since there was little to do in the role until people were travelling again.
Metlifecare held at $5.95 even as an independent valuation put shares between $5.80 and $6.90. Swedish suitor EQT is attempting a takeover at $6 per share, which Metlifecare chair Kim Ellis is opposing, although the rest of the board is endorsing the deal. Shareholders will vote on the offer at a meeting set for Oct. 2.
A2 Milk rose 2.7 percent to $18.79, Synlait Milk gained 1 percent at $6.28, Skellerup Holdings advanced 1 percent to $2.85 and Fisher & Paykel Healthcare edged 0.2 percent higher at $36.21.
These exporters were likely encouraged by a break in the soaring kiwi dollar which dipped lower as the greenback bounced.
The kiwi dollar was trading 67.48 US cents at 5pm in Wellington, down from 67.80 cents yesterday.
The trade-weighted index was at 72.54 at 5pm, from 72.64 yesterday. The kiwi traded at 92.26 Australian cents up from 92.16 cents, 71.73 yen from 71.89 yen, 57.15 euro cents from 56.94 cents, 50.69 British pence from 50.67 pence, and 4.6159 Chinese yuan from 4.6303 yuan.
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