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NZ market edges down as employment confidence hits low point

New Zealand's benchmark share index slid into the red as local employment confidence hit its lowest point since December 2020.

Wednesday, September 27th 2023, 6:03PM

by BusinessDesk

The SP/NZX 50 Index edged down 26.01 points, or 0.2%, to 11,316.81. Turnover was $101.3 million and there were 35 gainers and 90 decliners on the main board. 

Devon Funds head of retail Greg Smith said it was quieter “in the skies and on the market boards” during the school holidays.

In September 2023, employment confidence in NZ hit its lowest point since December 2020, with more people expressing pessimism than optimism, according to the Westpac McDermott Miller Employment Confidence Index.

The index, which surveyed 1,551 respondents from Sept 1-13, measures various aspects of the labour market, including perceptions of job availability. A score above 100 indicates optimism outweighs pessimism, but the Sept quarter recorded a score of 98.3, a 7.4-point drop from June. 

This marked the first time since March 2021 that respondents had an overall negative view of the labour market. 

Westpac senior economist Darren Gibbs noted that this decline reflected workers' growing perception that it's becoming increasingly challenging to secure employment.

Smith said the data is a sign that consumers are starting to “price in” the gloom around the outlook of the economy.

The Warehouse Group reports its full-year results tomorrow, while Hallenstein Glasson Holdings reports on Friday. Smith said it would be interesting to see how the retailers’ outlook “squared up” with the survey.

The Warehouse hasn’t provided revenue or earnings guidance for the full year, but Hallenstein told the market at the end of August that group sales for the 12 months ended Aug 1 were $409.7m, up 16.7% on the prior year of $351.2m in group sales.

Group net profit after tax is expected to be within the range of $31.8m to $32.3m, an increase of approximately 25.2% on the prior year ($25.6m).

The Warehouse Group was up 1 cent or 0.6% to $1.75 on Wednesday, while Hallenstein Glassons was down 5 cents or 0.9% to $5.75.

In an update to the market on Wednesday, fleet company Eroad announced that “approximately $50m in gross proceeds” was raised via the company’s equity raise.

Chair Susan Paterson said the $50m would help its capital structure as Eroad continued to add “game-changing functionality” for its customers and launch its decarbonisation tool.

The stock fell 3 cents or 4.3% to 67 cents.

Geneva Finance told the market this morning that the Reserve Bank of NZ (RBNZ) had initiated an investigation into an insurance company owned by Geneva.  

The investigation concerns potential violations of the Insurance (Prudential Supervision) Act, primarily related to the insurance company's failure to establish a statutory fund when required and maintain the minimum solvency margin mandated by its insurance license conditions. 

Quest Insurance Group, the subsidiary of Geneva Finance, maintains that it had sufficient funds to meet its obligations. These concerns pertain to actions in 2021 and 2022, and Quest had self-reported the issues. 

Geneva's annual report for the year ending March 31 reveals that Quest reported a pretax profit of $4.4m, down 6% from the previous period. 

The decrease was due to higher claims costs, notably from the Auckland floods and, to a lesser extent, claims from Cyclone Gabrielle. Geneva Finance shares were flat at 40.5 cents per share by early evening.

Shares in real estate investment company Argosy Property were also flat at $1.10. Today, it told the market it had concluded leasing transactions over further green-certified space in its portfolio.

“As the market changes, it is clear that occupiers have a strong and increasing preference for green buildings,” chief executive Peter Mence said.

This includes entering into a 12-year lease conditional agreement with Niwa for approximately 2,650 square metres on the ground floor and level 1 of 82 Wyndham St, Auckland. 

The company said the lease will start on Jan 1 and includes 80 car parks.

“We are very pleased to have retained Niwa in the portfolio. The market demand for green buildings remains strong,” Mence said.

Property developer Mansons TCLM has exercised its option to extend the settlement date on the purchase of a large Auckland office building, formerly the Auckland council service centre at 35 Graham St, from its listed landlord Asset Plus. 

The original sale price was $65m plus GST, with plans for potential redevelopment. Mansons' decision to extend the settlement date by 12 months to Nov 29, 2024 has led to an increased purchase price of $68m, along with a higher deposit requirement of 20% of the new price. 

Asset Plus was up 1 cent or 4.2% to 25 cents.

Goodman Property was up 1 cent or 0.5% to $2.11, Precinct Properties fell 3 cents or 2.6% to $1.14, and Kiwi Property was down half a cent or 0.6% to 84.5 cents.

Investore Property was down 2 cents or 1.6% to $1.27, as was Property for Industry, which fell 1 cent or 0.4% to $2.25.

The NZ dollar was trading at 59.44 US cents at 3pm in Wellington, down from 59.65 on Tuesday. The trade-weighted index was at 70.57, from 70.67 on Tuesday.

Tags: Market Close

« NZ market down as investors press pauseNZX50 drops more than 1% as bond yields rise »

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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
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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 - - -
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China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
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HSBC Premier LVR > 80% - - - -
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Kainga Ora - First Home Buyer Special - - - -
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TSB Bank 9.44 7.79 7.55 7.45
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Median 8.64 7.14 6.82 6.65

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