MARKET WRAP: NZ shares fall, tech stocks gain

New Zealand shares fell below the 9000 mark today, despite a solid trading day for technology stocks and for retailer Kathmandu.

The S&P NZX50 index fell 43.88 points to 8,980.31, on turnover of $159 million.

Harbour Asset Management managing director Andrew Bascand says in a continuation of light holiday trading, market volumes were muted.

“This week is a big data download around the world, with many inflation outcomes expected in Europe and Asia,” Mr Bascand says.

Delegat Group disclosed an unaudited operating after-tax profit of $44.9 million for the year to June 30. This is up 17% on the previous year of $38.5m. The company has seen a 33% rise in the share price over the past year.

The company also made slight downgrades to the volume of case sales, but that didn’t dent investor enthusiasm as Delegat shares gained 1.16% to $8.75.

Kathmandu was among the strongest performers, following on from its earnings upgrade last month and recent price strength. Today its shares gained 3.27% to $3.16.

Last month the outdoor retailer said it expects net profit after tax to be in the range of $48-52m (up from $38m last year), for the year ended July 31, 2018. 

“It was a fairly sizable move. Investors and analysts have taken a positive read-through for margins and sales through a colder winter period,” Mr Bascand says.

NZ Refining had a slight recovery after last month’s announcement it expects to take a $40m hit on net profit as a result of maintenance costs on the unit, up from previous estimates of $30m.

Its shares gained 2c to $2.52.

New Zealand stocks in the technology sector had a positive day trading, with Gentrack, Serko and Vista Group all up on light volumes.

Mr Bascand attributes those strong performances to retail buying after investor tours which provided good insights, particularly into Serko and Gentrack.

Gentrack shares gained during the day but closed flat at $7. In June, it announced that it had entered into an agreement to acquire Evolve Parent Limited and Evolve Analytics, which helps big energy utilities in the UK handle their settlement and billing data, for £23.0m ($44.2m).

Serko gained 4c to $2.94. Last month, the Auckland-based company listed on the ASX at $A2.60. The corporate travel booking software developer did a foreign exempt compliance listing and retains its primary listing on the NZX.

Vista Group shares also gained 2.63% extending recent gains to $3.90.

Healthcare stocks were weaker, with Ryman Healthcare shares down 1.21% to $12.25 and Fisher & Paykel Healthcare shares down 1.82% to $14.53.

Mr Bascand says perhaps the healthcare stocks are “taking a lead” from the Australian listed healthcare companies that were also down on the day.

Earlier today, Chinese data for GDP came out in line at 6.7%. Mr Bascand says industrial production was slightly weaker, but retail sales were stronger.

Investors will be keeping an eye on several key data points throughout the week with more New Zealand companies expected to pre-announce earnings. Trustpower has an investor data on Tuesday and Z Energy will release its operating statistics on Wednesday.

NZ CPI and NZ REINZ House Sales are out on Tuesday. On Wednesday there's the global dairy auction and in the US Morgan Stanley, American Express and IBM will report earnings.

On Thursday Australia Employment statistics are out and Microsoft will report its earnings.