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Last Article Uploaded: Tuesday, November 30th, 7:17PM

Investments

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The Markets

Shares slump as rate hike looms

New Zealand's headline share index dropped on Monday as investors braced themselves for the Reserve Bank to hike the official cash rate later this week.

Tuesday, November 23rd 2021, 6:54PM

by BusinessDesk

The S&P/NZX 50 Index fell 132 points, or 1%, to 12,607.64. Turnover was $146 million.

Climbing interest rates have been weighing down the local equity market which has failed to make any lasting gains since this time last year.

On Wednesday, the central bank will release its November Monetary Policy Statement which was widely expected to contain a 0.25% increase to the official cash rate (OCR).

However, strong inflation expectations and a near-record-low unemployment rate have seen investors predicting a 45% chance of a 50-basis point hike.

A note from Craigs Investment Partners’ research team said they would expect to see a reaction across financial markets either way.

ASB economist Mike Jones said the Reserve Bank of New Zealand (RBNZ) meeting on Wednesday afternoon will be a “showstopper”. “

Once the dust settles, we suspect the lasting market reaction will be determined by how much the bank lifts its long-term OCR forecasts,” he said.

RBNZ had projected the cash rate to peak at 2.1% in August but could raise it to 2.5% – a level closer to market expectations of above 3%.

Investors appeared to be taking some risk off the table with a cross-section of stocks recording significant falls today.

Ryman Healthcare led the market lower, falling 3.7% to $12.50 after having already been the worst-performing stock last week.

Jarden analysts reiterated their ‘sell’ rating after the retirement village operator’s half-year earnings result was below their forecast.

The analysts said the stock was “unappealing” due to high levels of debt and a risk the share price could fall significantly.

However, Macquarie gave a different view saying that with strong demand and high property prices the stock deserved its price tag.

Electricity stocks were notably weak today, with Vector down 2.7% at $3.90, Genesis Energy off 2.7% to $2.92, and Meridian Energy closing 2.4% lower at $4.52.

Meridian Energy will sell its Australian electricity sector assets for A$729m (NZ$754m) to multinational oil company Shell and Infrastructure Capital Group.

Metro Performance Glass fell 8.5% to 37.5 cents per share after announcing it only just broke even in the first half of the year.

The NZX’s newest listing, logistics software Trade Window, jumped almost 85% on its share market debut after direct listing this morning.

Shares that floated at 92 cents were trading at $1.70 by market close, valuing the company at $146m.

The New Zealand Refining Company climbed 5.8% to 91 cents after it confirmed its decision to convert to an import-only fuel terminal.

The NZ dollar was trading 69.90 US cents at 3pm in Wellington, down from 70.36 cents on Friday.

Tags: Market Close

« Ryman Healthcare leads market lowerStock market rallies as RBNZ eases rates higher »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 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 2.04 - - -
ASB Bank 4.45 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 5.15 - - -
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 - 3.29 - -
The Co-operative Bank - Owner Occ ▲4.75 3.49 4.15 4.49
The Co-operative Bank - Standard ▲4.75 3.99 4.65 4.99
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 3.55 3.89 -
Lender Flt 1yr 2yr 3yr
Westpac ▲5.09 4.25 4.95 5.29
Westpac - Offset ▲5.09 - - -
Westpac Special - 3.65 4.35 4.69
Median 4.77 3.65 4.35 4.69

Last updated: 30 November 2021 11:15am

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