NZ's swap rate hits 12-year high
New Zealand’s market was still digesting yesterday’s surprising inflation figures today, while dairy updates and swap rates were the biggest news for the rest of the market.
Wednesday, October 19th 2022, 5:59PM
by BusinessDesk
Peter McIntyre, an investment adviser from Craig’s IP, said NZ’s market had been quiet today as investors sat back and absorbed yesterday’s consumer price index (CPI) numbers, while fresh corporate news was slow.
“The big story of the day is just where our five-year swap-rate has gone,” he told BusinessDesk. “It's hit 5% today, which is a level not seen since 2010.”
The S&P/NZX 50 Index rose 69.4 points, or 0.64%, to 10,916.65. Turnover was $110.8 million.
The global dairy trade (GDT) index slumped by 4.6% overnight, with whole milk powder (WMP) falling 4.2% and skim milk powder dragging even further behind, dropping by 6.9%.
ASB’s Nathaniel Keal had one word in mind when summing up the GDT update: soggy.
“We’ve had a pretty soggy GDT overnight,” he wrote in an ASB rural economic report this afternoon.
He said the upward slope of the contract curve didn’t point to prices falling away “dramatically” but prices had lost part of the upward force they’d tentatively shown at the start of spring.
“Over the medium term, we just don’t think there will be enough supply to meet demand, and that should be a boon for dairy prices,” he said.
“Add a very weak New Zealand dollar into the mix and it’s a positive outlook for farmgate returns.”
Fonterra Shareholders' Fund units were flat at $3. Synlait shares were down 1% to $3.09 and A2 Milk was up 1% to $6.02.
This afternoon, A2 Milk announced that it was reviewing its executive remuneration practices to align across its Australian and NZ operations.
This includes revising its short-term incentive plan – which would allow the board to defer part of chief executive David Bortolussi's incentive payment – assuming that he qualifies for one in 2023.
Bortolussi is on a base remuneration of A$1.8m (N$2m), inclusive of superannuation.
Medicinal cannabis company Rua Bioscience was up 1.9% to 25.5 cents. It told the New Zealand stock exchange (NZX) this morning it had received its first order via its German distributor, Nimbus Health, which marked a “significant” commercial milestone for the export-focused company.
“Receiving this order for dried flower from Nimbus signifies just how close we are to cementing export revenues and providing German patients with a sustainable supply of Rua medicines,” managing director Anna Stove said.
Earlier this month, rival medicinal cannabis company Cannasouth announced it had received its first shipment of verified cannabis medicines. The stock was up 1.6% to 31.5 cents.
Greenfern Industries fell by 6% to 12.5 cents.
There’s a smattering of annual meetings tomorrow, with Auckland International Airport the first out of the gate in the morning.
The airport said it was considering a retail bond offer of fixed-rate bonds that were maturing in May 2028, but hadn’t yet come to a decision. The stock also rose 0.4% to $7.21.
Steel distributor Vulcan Steel and freight and logistics firm Move Logistics also have their annual meetings tomorrow.
This evening, Move Logistics edged up 0.9% to $1.12 while Vulcan Steel was down 0.3% to $7.72.
McIntyre said logistics company Freightways had an excellent day and was up by 5.9% to $10.06, which helped haul the market higher.
Utility pole management company ikeGPS was up 2.2% to 93 cents today. Shares lifted 8.3% yesterday on the news of a “strongly cash positive” first half of its 2023 financial year.
Eftpos processor Smartpay Holdings, which also jumped 8% yesterday, edged up by just 2% to 76 cents by early evening.
Smartpay had told the market that more than 1,600 new transacting terminals have been added through to the end of September 2022.
The NZ dollar has been sneaking slowly upwards this week and was trading at 56.96 US cents at 3pm in Wellington, up from 56.66 US cents yesterday.
| « CPI data shocks NZ market – but was not as high as many feared | F&P Healthcare drags market lower » |
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