NZ sharemarket down slightly
The New Zealand sharemarket was down slightly, while investors across the Tasman were inspired by the Reserve Bank’s move to keep interest rates on hold.
Tuesday, May 7th 2024, 6:30PM
by BusinessDesk
The S&P/NZX 50 Index closed at 11,800.78, down 20 points or 0.17% after reaching an intraday high of 11,840.89.
There were 68 gainers and 72 decliners over the whole market on volumes of 35.14 million share transactions worth $115.75m.
The Reserve Bank of Australia (RBA) kept the official cash rate (OCR) at a 12-year high of 4.35% and said inflation continued to moderate but was declining more slowly than expected. Annual inflation there is running at 3.6%, down from 4.1% at the end of last year.
There was a fear that the bank would increase the OCR.
“It was a hawkish hold, with the bank having room to increase interest rates if they have to,” Jeremy Sullivan, an investment adviser with Hamilton Hindin Greene, said.
The RBA said the path of interest rates that will best ensure inflation returns to target (2-3%) in a reasonable timeframe remains uncertain, though it predicted the second half of next year, and the bank is not ruling anything in or out.
The S&P/ASX 200 Index had risen 1.3% to 7,781.9 points at 6pm NZ time.
Local market
At home, Tourism Holdings recovered 13c or 7.14% to $1.95 after falling 36% the day before on a significant profit downgrade.
“The stock was seen as oversold by the market,” Sullivan said. Spark was down a further 8c or 1.78% to $4.41 following its earnings downgrade.
Sullivan said Spark is a reliable blue-chip stock, and seeing the downgrade was disappointing. However, Spark has increased its IT services, and some government cloud computing projects are being delayed.
ANZ Banking Group was up 70c or 2.26% to $31.70 after reporting a half-year cash profit of A$3.55 billion (NZ$3.89b), down 1% on the previous half, and revenue of A$10.34b, down 4%. ANZ is paying an interim dividend of 83c a share and is buying back $2b worth of shares.
ANZ NZ’s cash profit was $852m, up 2%, with moderate balance sheet growth of 1% in lending and 2% in deposits despite challenging economic conditions.
Sullivan said ANZ NZ’s net interest margin of 2.59% was “pretty impressive” compared with Australia’s 1.56%.
“I’d put it down to New Zealanders' love of term deposits and having money in savings accounts earning very little, and this money can be used by the bank on high-yielding mortgages.”
Westpac gained 68c or 2.28% to $30.48, and Heartland Group eased 2c or 1.98% to 99c.
Other gainers were Oceania Healthcare, up 3c or 5.45% to 58c; Synlait Milk, increasing 2c or 4.55% to 46c; and Vista Group, adding 4c or 2.21% to $1.85.
Ebos Group was down 25c to $35.25; Skellerup declined 11c or 2.62% to $4.09; Turners Automotive decreased 10c or 2.36% to $4.13; Sky TV shed 6c or 2.14% to $2.74; and Comvita eased 4c or 2.14% to $1.83.
Pole monitoring technology company ikeGPS rose 7c or 16.67% to 49c after announcing five new subscription agreements with major United States power companies with an expected total contract value of $4m and annual recurring revenue of $1.3m.
IkeGPS said since launching its next-generation product late last year, it has added a total contract value of more than $12m, representing $4m of annual recurring revenue.
Briscoe Group, unchanged at $4.45, reported sales of $183m for the first quarter ending April 28, up 1.03% on the same period last year. The homeware sales declined 1.09% to $108.7m, and sporting goods were up 4.28% to $74.3m.
Fellow retailers Hallenstein Glasson was down 16c or 2.71% to $5.75, and The Warehouse declined 3c or 2.26% to $1.30.
Transport technology firm Eroad increased 2c or 2.38% to 86c after releasing its roadshow presentation which said the company expects to be free cashflow positive later this year.
Foley Wines, down 1c to 80c, told the market its harvest was down 21% to 6404 tonnes across its five wineries in Marlborough, Martinborough and Central Otago. Fellow wine exporter Delegat Group declined 12c or 2.06% to $5.70.
Rural services company PGG Wrightson continued its torrid run, falling 8c or 4.28% to $1.79 and nearing its all-time low of $1.67. It’s a far cry from its peak of $21.50 in August 2008.
Other decliners were Napier Port, down 7c or 2.92% to $2.33; Third Age Health, declining 3c or 1.83% to $1.61; Winton Land, easing 5c or 2.38% to $2.05; Pacific Edge, shedding 0.005c or 4.76% to 10c; and Move Logistics, falling 4c or 10.26% to 35c.
| « NZ sharemarket dragged down by THL, Spark | NZ sharemarket kept afloat thanks to F&P Healthcare » |
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