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The Markets

NZX50 rises on light volumes as inflation data is released

The New Zealand sharemarket made a small gain on further evidence that inflation is falling, but investors are wary that another official cash rate rise is on the cards by the end of the year.

Wednesday, July 19th 2023, 6:18PM

by BusinessDesk

The S&P/NZX 50 Index traded in a narrow range of 11,932.81 and 11,972.41 and closed at 11,944.54 – up 11.73 points or 0.1%.

There were 80 gainers and 48 decliners on the main board, but investors remained on the sideline with just 20 million shares worth $75.35m changing hands.

Annual inflation is now running at 6%, down from 6.7% at the end of March, after the June quarter consumer price index (CPI) increased 1.1%.

The latest inflation number was slightly stronger than the market expectation of 5.9% but below the Reserve Bank’s forecast of 6.1%.

There was a surprise move in the non-tradable (domestic) inflation component, increasing to 6.6% and ahead of the market expectation of 6.4% and the Reserve Bank of NZ’s 6.3%.

Tradable (imported) inflation was 5.2%, down from 6.4%, and benefited from an unexpectedly sharp fall in international airfares.

ANZ Research said the data showed risks to the inflation outlook remained firmly on the upside.

The market is pricing in an 80% chance of a 25 basis points increase in the official cash rate (to 5.75%) by the end of the year.

David McConnochie, investment adviser with Forsyth Barr, said the latest inflation rate was a touch higher than the market expected, driven by the rise in food prices.

“Inflation has come down steadily and that’s positive for future market certainty,” he said. “Non-tradable inflation is a little higher than we would like, and food and wage inflation are sticking points.

“We believe the Reserve Bank will put up with the noise and stay the course with a (peak) 5.5% OCR.”

NZ wholesale (swap) rates increased 10 basis points after the CPI release, and the NZ dollar went through the US63c mark against the American greenback before falling back to US62.54c.

Winners and losers

Fisher and Paykel Healthcare was up 55c or 2.27% to $24.75; Mercury Energy gained 7c to $6.40; Restaurant Brands collected 10c to $6.45; Comvita added 8c or 2.56% to $3.20; and Tourism Holdings increased 8c or 2.31% to $3.55.

Leading banks ANZ and Westpac added 52c or 1.93% to $27.47 and 39c to $23.84, respectively.

Ventia Services Group rose 20c or 6.33% to a new high of $3.36 on the news that it will be added to the S&P/ASX 200 Index next week, replacing Blackmores, which Kirin Holdings have bought.

Channel Infrastructure, up 3c or 1.85% to $1.65, increased throughput at its Marsden Point fuel import terminal by 10m litres to 821m litres in the second quarter, driven by strong aviation demand. Total throughput was 1.63 billion litres for the six months ending June. 

Channel has completed decommissioning the oil refinery with conversion costs of $170m to the end of the June within budget, including $30 million of private storage costs.

Precinct Properties, increasing 3c or 2.38% to $1.29, told the market that the sale of 40 and 44 Bowen Street in Wellington has gone unconditional. Argosy Property, down 1c to $1.16, has extended its syndicated banking facilities by $50m to $525m.

Other gainers were Vista Group up 6c or 3.28% to $1.89; 2 Cheap Cars increasing 3c or 4.84% to 65c; Move Logistics adding 2c or 2.47% to 83c; PGG Wrightson, up 11c or 2.7% to $4.19; and Vital improving 2.5c or 11.11% to 25c.

Meridian Energy was down 8c to $5.38; Contact shed 10c to $8.08; Freightways declined 15c to $8.50; Port of Tauranga decreased 10c to $6.18; Chorus fell 14.5c to $8.30; and Summerset Group was down 7c to $10.30.

Winton Land fell 9c or 4.21% to $2.05; Delegat Group was down 14c to $8.62; NZ Oil & Gas declined 1.5c or 3.8% to 38c; My Food Bag decreased 1.5c or 6.25% to 22.5c; and Blackpearl Group shed 3c or 5% to 57c.

Vulcan Steel continued to fall following its earnings downgrade, declining 39c or 4.53% to $8.21.

Tower declined 2.5c or 4.03% to 59.5c after downgrading its full-year net profit guidance to between a loss of $2m and a gain of $3m from the previous $8m-$13m profit. Gross written premiums were up 16.5% to $385m at the end of the third quarter.

Tower said inflation, motor crime and supply chain issues continued to worsen over the third quarter, with the average cost of motor claims increasing by 20% and premiums rising 26% over the past year.

Large events costs are now $39.5m, leaving $10.5m of Tower’s $50m allowance for the remainder of the year to Sept 30. Tower has now settled more than 50% of the claims from January’s Upper North Island flooding and Cyclone Gabrielle.

Tags: Market Close

« NZ sharemarket drifts as takeover bid rejectedNZ sharemarket subdued as the bulls charge on Wall Street »

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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 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
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BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
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BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
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Heartland Bank - Reverse Mortgage - - - -
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HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
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Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
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Resimac - LVR < 80% 8.84 8.09 7.59 7.29
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Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.29 6.59
SBS Bank Special - 7.14 6.69 5.99
SBS Construction lending for FHB - - - -
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SBS Unwind reverse equity 9.95 - - -
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TSB Bank 9.44 7.79 7.55 7.45
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Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.21 7.29 6.65

Last updated: 20 May 2024 10:01am

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