The new restrictions cast a shadow over the NZ market as the NZ Prime Minister Jacinda Ardern announced that alert level 3 in Auckland would be extended for 12 days. 

She said there is nothing to suggest a move to alert level 4 was required.

The market was down 2.5% in early trading - its biggest fall in two months - but went up as investors processed the impacts of the lockdown and the Reserve Bank announced further stimulus which will support financial markets.

The shutdown will have a limited effect, at this stage, as it is not nationwide, and many companies have rebuilt their balance sheets to be more resilient.

Let’s review about the troubled stock AMP climbed 12% after reporting a special dividend and a $200 million share buyback programme after the sale of its life insurance division.

Sometimes, such an approach may indicate a company sees few opportunities to actually invest cash back into the business. 

Let’s talk about Heartland Group Holdings, a regional bank that may be exposed to mortgage defaults, fell 7%. However, ANZ and Westpac climbed 7% and 9% respectively.

That’s because they had dividend party in Australia! Westpac and ANZ led the rise in financials, after Commonwealth Bank of Australia reported their full year earnings, with a solid dividend. Despite their full-year cash profit falling, a robust balance sheet and the bank paying the maximum dividend allowed in this environment, the result is generally a positive sign for the sector. 

Next is Retail property investor Kiwi Property Group which declined 6%. Sylvia Park is a massive part of the company’s assets, so lockdown will have a big impact that investors are trying to price in. 

However, were you surprised by the traffic jams during Level 1 and Level 2? Not all people are working from home. We still go to offices and shops. Therefore, investors realise this virus will go away and commercial property will enjoy some demand. Yes, it won’t be 99% occupancy but still high enough to offer good return on investment.

Let’s talk about aged-care providers. Arvida and Oceania who saw some losses as investors were concerned about exposure to elderly communities which are at higher risk to covid-19. Arvida and Oceania had the sector’s biggest loss, falling 7%. However, the swift tightening of companies’ protocols who can enter the retirement village and other health & safety rules cushioned the stock falls.

Learn other tips at https://www.MaximSherstobitov.NZ/

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