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The Markets

Third consecutive day of gains on NZX as optimism persists

New Zealand shares rose for a third day as investors remain upbeat about the potential recovery from the pandemic disruption.

Thursday, June 4th 2020, 7:17PM

by BusinessDesk

The S&P/NZX 50 Index advanced 104.53 points, or 0.9 percent, to 11,222.80. Within the index, 37 stocks rose, 10 fell, and three were unchanged. Turnover was $307.5 million.

The benchmark index's strength has followed global markets as investors become increasingly confident the world economy would return to its former strength swiftly.

Investors have been seeking bargains, buying companies that have lagged behind the recent rally and selling out of firms that remained strong through the pandemic.

“The pockets that have performed well are the ones that hadn’t recovered yet from the covid selloff in March,” said Sam Trethewey, a portfolio manager at Milford Asset Management.

“Investors are looking at them as an opportunity on the view the downturn might not be as bad.”

Bank economists have started to adopt a less gloomy outlook on economic recovery in recent days. BNZ head of research Stephen Toplis said with more than a week with zero new covid cases, there were grounds for optimism. He now expects GDP to return to pre-covid levels in the second half of 2022, a full year earlier than previously forecast.

Milford's Trethewey said whether the increased economic activity will last was the key question for investors.

“We are seeing real time indicators, which the bank economists are looking at, spiking up at the moment,” he said. “But is this just a catch up after a quiet couple of months? Or is this level sustained?”

Refining NZ led the market higher, climbing 8.8 percent to 87 cents. Trethewey said investors were happy to buy the refinery operator on the expectation of growing demand for fuel as the economy bounces back. The share price is still half where it started the year, despite jumping more 20 percent this week.

Tourism Holdings rose 7.8 percent to $2.34, bringing its gain for the week to more than 30 percent. Today the government announced the company would receive $4 million to support its Discover Waitomo business as part of an effort to protect strategic tourism assets.

“It is certainly positive at the margin that the government is willing to step in and help with those sorts of assets,” Trethewey said.

Gentrack advanced 7 percent to $1.85, also climbing roughly 30 percent through the week.

Heartland Group Holdings increased 5.6 percent to $1.33. Trethewey said the specialist banking provider was closely tied to economic conditions as it engaged in more marginal lending.

Air New Zealand rose 4.1 percent to $1.51 and Auckland International Airport advanced 3.6 percent to $7.10.

The national carrier today announced its plans to increase operations to 55 percent of normal domestic capacity. The news coincided with progress on a trans-Tasman bubble with a detailed set of proposals due to be delivered to the New Zealand and Australian governments by the end of the week.

NZX rose 1.4 percent to $1.43. Today the securities exchange operator said trading volumes in May more than doubled those last year at 1.04 million trades, with an average daily value of $208 million.

Vista Group International posted the day’s biggest decline, dropping 6.5 percent to $1.86. The cinema software developer's recently rally stumbled following an indication that it would need to downsize its business to match the new operating environment.

Tags: Market Close

« Investors eye covid recoveryNZ shares fall as kiwi dollar weighs on offshore earners »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
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Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.00 3.13 3.02

Last updated: 21 September 2020 10:48am

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