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NZ's sharemarket up while Australia's takes a dive

The New Zealand sharemarket went up while its counterpart across the Tasman dived on the shock move by the Reserve Bank of Australia to further increase interest rates.

Tuesday, May 2nd 2023, 6:21PM

by BusinessDesk

After trading flat for most of the day, the S&P/NZX 50 Index suddenly turned and closed at 12,037.81, up 34.84 points or 0.29%.

There were 62 gainers and 69 decliners over the whole market, with 35.9 million shares worth $107.07m changing hands.

The S&P/ASX 200 Index had fallen 0.86% to 7271.2 points (at 6pm NZ time) after the Reserve Bank of Australia (RBA) increased its cash rate 25 basis points to 3.85% when the market thought the central bank would pause rates for the second month running.

RBA governor Philip Lowe said inflation in Australia has passed its peak, but at 7% is still too high, and it will be some time yet before it is back in the target range (of 2-3%).

“Given the importance of returning inflation to target within a reasonable timeframe, the board judged that a further increase in interest rates was warranted,” he said. 

Lowe indicated that some further tightening of monetary policy may be required. The cash rate is now at the highest level since April 2012, when it was 4.25%. 

Greg Smith, head of retail with Devon Funds Management, said the Reserve Bank of NZ's financial stability report and the latest labour market numbers will be closely watched by the local market.

“There may be a message of reassurance that household budgets are resilient, and interest rates and cost-of-living increases have peaked. But the battle with inflation is not done yet.”

Smith said unemployment for the March quarter was expected to be steady at 3.4% and wage increases could rise from the record 4.1 % in the December quarter to 4.4 or 4.5%.

Fletcher Building increased 14c or 3.04% to $4.75 after presenting to the Macquarie Australia conference and telling the brokers it has “a strong, enduring financial position and is well positioned for a softer full 2024".

Fisher and Paykel Healthcare was up 39c to $27.80; Freightways gained 31c or 3.34% to $9.59; Port of Tauranga collected 7c to $6.39; Summerset Group improved 14c to $8.30; a2 Milk added 6c to $5.91; and Fonterra Shareholders’ Fund increased 12c or 3.48% to $3.57.

Restaurant Brands increased 18c or 2.43% to $7.60; Serko rose 11c or 5.19% to $2.23; Gentrack added 10c or 3.04% to $3.39; and Vista Group gained 3c or 2.4% to $1.28.

Comvita rose 18c or 6.38% to $3 after telling the market it is experiencing solid demand and gaining market share for its mānuka honey, propolis and olive-leaf extract products. 

Comvita said it is expecting a record fourth quarter to deliver the full-year guidance of double-digit growth in operating earnings (Ebitda), and “keep us on track to our full year 2025 target of $50m Ebitda".

Eftpos provider Smartpay Holdings reached a 20-year high after rising 6c or 3.66% to $1.70. It reached $1.60 on March 1, 2003.

Embark Education was up 5c or 8.2% to 66c after reporting increased occupancy at its early childcare centres and a 21% increase in Australian revenue to A$13.9m (NZ$14.9m) for the first quarter compared with the previous corresponding period.

Other gainers were Michael Hill, up 2c or 1.85% to $1.10; NZ Automotive Investments, improving 3.5c or 11.48% to 34c; Rakon, adding 2c or 1.9% to $1.07; and Marlin Global, increasing 2c or 2.38% to 86c.

Manawa Energy, up 5c to $4.95, has secured the rights to develop the Project Horikawa 230MW windfarm in central North Island. The wind development would generate about 800 gigawatt hours of electricity each year – enough to power 100,000 average NZ homes.

Auckland International Airport, down 7c to $8.75, is planning a bond offer that matures in November 2028. Hallenstein Glasson’s strong run ended, falling 19c or 2.95% to $6.24.

Meridian Energy, which also presented to the Macquarie Conference, declined 6c to $5.36; Ebos Group was down 31c to $43.69; Seeka decreased 13c or 4.64% to $2.67; and CDL Investments shed 4c or 5.06% to 75c.

Other decliners were Eroad was down 2c or 3.45% to 56c; NZME down 2c or 1.83% to $1.07; and Just Life decreasing 1.56c or 3.9% to 37c.

Chatham Rock Phosphate, up 0.002c to 15c, has provided samples of Queensland Korella Mine phosphate to seven fertiliser manufacturers in NZ, Australia, Canada and Europe.

Software firm AoFrio, down 0.003c or 2.94% to 9.9c, told the market it is maintaining its full-year guidance, with revenue expected to increase more than 30% to near $100m and operating earnings (Ebitda) reaching $3.5m. 

First quarter revenue was $14.7m compared with $18.4m for the same period last year, and Ebitda was running at a $400,000 loss.

Tags: Market Close

« Quiet start to NZ sharemarket's week, optimism for strong US earnings seasonUS banking and NZ inflation worries causes sharemarket slump »

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AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 ▼7.45 ▼7.09 ▼6.95
ANZ Blueprint to Build 7.39 - - -
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BNZ - Classic - ▼6.85 ▼6.49 ▼6.39
BNZ - Green Home Loan top-ups - - - 1.00
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BNZ - TotalMoney 8.69 - - -
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China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼6.59 - -
Co-operative Bank - Owner Occ 8.40 ▼6.79 ▼6.49 ▼6.35
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Co-operative Bank - Standard 8.40 ▼7.29 ▼6.99 ▼6.85
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HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
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SBS Bank Special - 7.14 6.49 6.35
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SBS FirstHome Combo 6.19 6.14 - -
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Westpac Offset 8.64 - - -
Westpac Special - 6.89 6.75 6.39
Median 8.64 7.14 6.82 6.44

Last updated: 19 July 2024 9:21am

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