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Last Article Uploaded: Friday, December 3rd, 9:22PM

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The Markets

NZ shares slide as inflation expectations jump

New Zealand’s sharemarket dipped again on Thursday as a Reserve Bank survey showed inflation expectations for the next two years had jumped to just under 3%.

Thursday, November 18th 2021, 6:52PM

by BusinessDesk

All eyes will now turn to the Reserve Bank of New Zealand (RBNZ) to see how aggressively they move to curtail inflation.

Senior ASB economist, Mark Smith said the 3% figure essentially locks in another official cash rate hike next week and raises the possibility of a 50-basis-point hike.

“The RBNZ will be concerned by these figures but will be comforted that longer-term inflation expectations have remained anchored close to 2%,” he said. 

Smith said he still expected a 25-point increase but said it will be a “very close call” between that and a 50-point hike.

The yield on a 2-year government bond jumped from 2.05% to 2.1% following the survey’s release at 3pm, but longer-dated bond yields moderated slightly.

The S&P/NZX 50 Index fell 37 points, or 0.3%, to 12800.33. Turnover was $145 million.

Investore Property led the index lower, down 2.6% to $1.88, with property stocks among the most affected by higher interest rates.

Today, Jarden analysts lowered Vital Healthcare Property trusts target price from $2.42 to $2.36 as higher interest rates are reducing its relative yield. The stock traded down 0.2% at $2.92 today.

Evolve Education Group $-0.030 -3.19 %

Fonterra Shareholders' Fund Units dropped 2.1% to $3.72. The cooperative’s chair told BusinessDesk he was confident the proposed capital change structure will get shareholder approval, despite government concerns. 

Agriculture minister Damien O’Connor has said the government would not support the proposal as it stands.

The latest version of the proposal caps the size of the Fonterra Shareholders’ Fund at 10% and lowers the minimum shareholder requirement for farmers.

Shares in My Food Bag dropped 1.6% to $1.20 ahead of the meal-kit company’s interim result report tomorrow morning.

Today’s earnings results were mostly positive, with Turners Automotive Group climbing 3% to $4.50 having reported profit up 26% to $16.9m

AFT Pharmaceuticals jumped 3.9% to $4.83 having tripled its first-half profit and reaffirmed guidance.

Dunedin-based Blis Technologies was not so lucky, falling 10% to 5.4 cents per share after recording a net loss of $1.8m.

Media company NZME's share price lifted another 1.5% to $1.35, after reporting strong progress on its digital transformation at a closed-door investor day.

The NZ dollar was trading at 70.05 US cents today, up from 69.91 yesterday, climbing after the inflation survey was released.

Tags: Market Close

« NZ sharemarket lower as Plexure falls 13%Ryman Healthcare leads market lower »

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Lender Flt 1yr 2yr 3yr
AIA ▲4.60 3.65 4.35 4.69
ANZ 4.79 4.25 4.95 5.35
ANZ Blueprint to Build 2.03 - - -
ANZ Special - 3.65 4.35 4.75
ASB Back My Build ▲2.29 - - -
ASB Bank ▲4.60 3.65 4.35 4.69
Avanti Finance 4.55 - - -
Basecorp Finance 5.49 - - -
Bluestone 3.74 3.54 3.89 4.09
BNZ - Classic - 3.65 4.35 4.69
BNZ - Mortgage One 5.15 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Rapid Repay 4.95 - - -
BNZ - Std, FlyBuys 4.95 4.25 4.95 5.29
BNZ - TotalMoney 4.95 - - -
CFML Loans ▲5.35 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 3.59 4.09 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 5.25 4.00 4.60 -
HSBC Premier 4.49 2.19 2.45 2.69
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 4.15 3.29 3.85 4.19
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank ▲4.25 ▲4.54 ▲5.20 ▲5.54
Kiwibank - Offset ▲4.25 - - -
Kiwibank Special ▲4.25 ▲3.69 ▲4.35 ▲4.69
Liberty 4.84 - - -
Nelson Building Society 4.95 ▲4.29 ▲4.85 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.39 3.54 3.89 4.09
SBS Bank 4.79 3.65 4.19 4.25
SBS Bank Special - 3.15 3.69 3.75
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲3.45 - -
The Co-operative Bank - Owner Occ ▲4.75 ▲3.65 ▲4.35 ▲4.69
The Co-operative Bank - Standard ▲4.75 ▲4.15 ▲4.85 ▲5.19
TSB Bank 5.34 4.09 4.74 4.99
TSB Special 4.54 3.29 3.94 4.19
Unity 5.65 4.15 4.60 -
Wairarapa Building Society 4.99 ▲3.65 ▲4.05 -
Lender Flt 1yr 2yr 3yr
Westpac 5.09 ▲4.29 4.95 5.29
Westpac - Offset 5.09 - - -
Westpac Special - ▲3.69 4.35 4.69
Median 4.77 3.65 4.35 4.69

Last updated: 3 December 2021 8:16am

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