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How are New Zealand-based ASX shares performing ahead of a likely recession?

We track how 3 New Zealand-based ASX shares are performing as the country potentially heads towards an economic recession.
The post How are New Zealand-based ASX shares performing ahead of a likely recession? appeared first on The Motley Fool Australia. –

New Zealand $10 note being squeezed by an orange string to show recession

If you’ve been noticing the news recently, you might be wondering how New Zealand-based ASX shares are performing.

New Zealand is projected to be heading for a recession, in contrast to the broader ASX, which is a bull market at the moment as confidence rides high following an electric rebound after the COVID-19 pandemic.

While much remains uncertain regarding the economic output across the ditch, with so many interesting Kiwi companies listed on the ASX, it’s worth taking stock of how three of New Zealand’s biggest companies have been performing over the past few months.

3 ASX shares that call New Zealand home

New Zealand Media and Entertainment (ASX: NZM) 

NZME is New Zealand’s leading integrated print, radio and digital media and entertainment business. The firm has a portfolio of publishing, radio, digital, newspapers, and e-commerce brands. This business model makes it particularly susceptible to economic downturns.

NZME carries a substantial amount of debt and its advertising revenues were slashed during the COVID-19 pandemic, with the business still unable to recoup those losses entirely. However, it was quick to cut its operational expenditure and has managed to make some of those cuts permanent.

While the NZME share price is down 6% this month, it’s up over 287% in the last 12 months.

Tilt Renewables Ltd (ASX: TLT)

New Zealand energy supplier Tilt Renewables has recently been the subject of a takeover from Mercury NZ Ltd (ASX: MCY). Mercury is a 51% New Zealand government-owned, 100% renewable energy generator that more than doubled its share price between 2017 and January this year.

Tilt is the owner, operator and developer of a number of established wind farms and an extensive wind and solar development pipeline across the south-east of Australia and the north and south islands of New Zealand. 

Mercury has lost 15% YTD, but Tilt is up 141% in that time period, beating the utilities sector by a similar margin. At the time of writing, its price-to-earnings ratio is 6. Both Tilt and Mercury have benefited from a high-priced wholesale energy market in New Zealand.

Xero Limited (ASX: XRO) 

Xero is one of the giants of the S&P/ASX All Technology Index (ASX: XTX) and one of the highest performing companies from across the Tasman. It provides a platform for online accounting and business services to small businesses, specialising in cloud computing. 

The Xero share price is down 1.89% this month, down 17% YTD, and down 26.9% against its technology sector over the past 12 months. This is despite acquiring workforce management platform Planday at the beginning of this month.

Between March 2020 and December 2020, Xero shares share increased from $63 to $154, but are currently sitting around $123.

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Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX and Vista Group Intl. The Motley Fool Australia owns shares of Xero. The Motley Fool Australia has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post How are New Zealand-based ASX shares performing ahead of a likely recession? appeared first on The Motley Fool Australia.

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