Alexa

New Zealand stocks flat as local currency subdues investor interest

New Zealand stocks flat as local currency subdues investor interest

Investors shrugged off negative comments from heavyweight Telecom's annual general meeting Thursday, but stocks remained flat as the strong New Zealand dollar weighed on sentiment toward the market.
The benchmark NZX-50 index rose 2.3 points to 3,595.70.
New Zealand shares failed to tap into the positive sentiment from Wall Street and other offshore markets, with brokers saying the combination of a strong currency and lack of local corporate news could leave shares drifting again Friday.
"There's nothing out there to drive it upward. If we can't go up after a day or two on these sorts of markets then nothing's going to help us in the very short term," said ASB Securities adviser Stephen Wright.
The main focus for investors was bellwether Telecom's annual general meeting, where chairman Wayne Boyd warned investors the company faces "significant challenges" in the coming year as a new regulatory regime increases competition in both the fixed line and broadband markets.
However, investors welcomed its confirmation of a 75 percent dividend payout ratio target for the fiscal year. Telecom closed the day unchanged at NZ$4.27.
Elsewhere, the market was mixed, with investors concerned about the effect the strong New Zealand dollar could have on earnings, particularly for exporters or businesses with significant offshore earnings.
"Our earnings outlook is in no way as high as elsewhere and that in part is due to the high New Zealand dollar. Earnings is a key driver of share price, so that's what's behind the subdued market," said First NZ Capital research director Barry Lindsay.
Currency-related losers included building materials firm Fletcher Building, off 1.1 percent to NZ$8.51, resin maker Nuplex, down 0.8 percent to NZ$6.57 and Tourism Holdings, down 0.5 percent to NZ$1.89.
Auckland International Airport rose 0.5 percent to NZ$2.08 on strong volumes, buoyed by offshore buying, brokers said.


Updated : 2021-01-23 07:24 GMT+08:00