NZX50 dips as investors wait on data

The New Zealand sharemarket opened a crucial week for the economy with a fall of more than half a percent, punctured by some unusually large downward moves in some leading stocks.

Monday, June 12th 2023, 6:25PM

by BusinessDesk

With the Australian market closed for King’s Birthday weekend, the S&P/NZX 50 Index was uninspired and closed at 11,615.55, down 74.79 points or 0.64%.

There were 47 gainers and 82 decliners over the whole market on volumes of 24.1 million share transactions worth $114.63m. Infratil, up 1c to $9.86, led the individual trading list with $33.9m worth of shares changing hands.

Paul Robertshawe, chief investment officer for Octagon Asset Management, said “the market felt very light with Aussie closed and some of the moves looked a bit over-sized, to me. It wasn’t a good guide for the rest of the week.”

Retail (electronic card) spending declined $113m or 1.7% in May compared with April – the first monthly fall since February. Westpac said the spending was weaker than expected and reinforced expectations for a downturn in domestic economic conditions over the coming months.

The market will now be closely watching the March quarter gross domestic product (GDP) on Thursday and whether NZ is in a technical recession following a 0.6% contraction in the economy in the December quarter.

Some economists are predicting that the country may just squeeze out with 0.2% GDP growth in the March quarter, and the Reserve Bank of NZ has forecast 0.3%.

The United States Federal Reserve is meeting this week and there’s a 70% consensus amongst analysts that interest rate rises will pause as inflation begins to fall. Whatever, the Fed will set the tone for global markets.

Greg Smith, head of retail with Devon Funds Management, said the Federal Reserve decision will be a close call. If it did pause, it would be the first time in 18 months.

“It will be significant particularly given that where the Fed goes, many other central banks tend to follow. We will get a sighter with US CPI numbers out before the Fed meets,” he said.

Airport talk

Freightways fell 34c or 3.89% to $8.41; a2 Milk declined 18c or 3.14% to $5.56; and Auckland International Airport was down 25c or 2.86% to $8.50 following Auckland Council’s decision to sell 7% of its 18% shareholding.

Robertshawe said a report speculated that if the stake was sold as a whole then there would be a takeover bid for the airport company.

“I think that’s a bit misguided. It’s a very hard asset to take over and the Overseas Investment Office would have something to say about that. It could only happen with a local bidder. I expect the council shareholding will be sold through a placement,” he said.

Robertshawe said he found the a2 Milk fall perplexing as the data coming out of China in terms of market share is positive and their SAMR licence is very important.

Mainfreight was down 77c to $69.23; Meridian Energy decreased 11c or 2.05% to $5.25; Ebos Group gave up 25c to $35.60; Skellerup Holdings declined 11c or 2.39% to $4.49; Summerset Group shed 9c to $8.90; and Restaurant Brands was down 15c or 2.23% to $6.58.

Retailers Hallenstein Glasson declined 13c or 2.16% to $5.90; Briscoe Group was down 10c or 2.3% to $4.25; Warehouse Group decreased 4c or 2.38% to $1.64; and Michael Hill was up 3c or 3.13% to 99c.

Chorus was down 18c or 2.12% to $8.30; South Port NZ fell 44c or 5.66% to $7.33; Eroad gave up 5c or 6.17% to 76c; Seeka shed 6c or 2.26% to $2.59; and Sky TV declined 4c to $2.53.

Move Logistics decreased 3c or 3.26% to 89c; Task Group was down 2c or 4% to 48c; and NZ Rural Land declined 3c or 3.33% to 87c.

Serko rose 19c or 5.49% to $3.65; Contact Energy was up 12c to $7.94; Port of Tauranga collected 9c to $6.21; Gentrack gained 8c or 1.9% to $4.28; and Green Cross Health improved 4c or 2.86% to $1.44.

PGG Wrightson was up 10c or 2.5% to $4.10; NZ Automotive Investments increased 1.5c or 5.66% to 28c; and T&G Global added 3c to $2.04.

WasteCo, last trading at 7.5c, went into a trading halt while it makes a placement with selected wholesale investors at 6.5c a share. WasteCo will soon announce a share purchase plan to enable existing shareholders to also participate in funding further growth.

Tags: Market Close