NZ sharemarket up more than 0.5%

The New Zealand sharemarket had a welcome rise of more than 0.5% as Australia kept interest rates unchanged and Japan raised theirs in a historic move.

Tuesday, March 19th 2024, 6:23PM

by BusinessDesk

The S&P/NZX 50 Index climbed steadily, especially after the Reserve Bank of Australia (RBA) announcement, and closed at 11,817.91, up 89.9 points or 0.77%.

There were 80 gainers and 52 decliners over the whole market on volumes of 30.86 million share transactions worth $126.23m.

Chorus, removed from the FTSE Russell Small Cap Index, topped the individual trading with $27.4m worth of its shares changing hands. Chorus was down 9c to $7.59.

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said the lift in the local market was broad-based across all sectors.

“The Reserve Bank of Australia’s latest move was the key piece of news for our market. Keeping rates on hold had already been priced into the market, and people wanted to see the wording around the outlook and when the bank would look at cutting (rates)."

The RBA kept its cash rate at a 12-year high of 4.35% and said: “While there are encouraging signs that inflation is moderating, the economic outlook remains uncertain.

The December quarter national accounts data confirmed growth has slowed".

“The path of interest rates that will best ensure inflation returns to the target range of 2-3% in a reasonable timeframe remains uncertain, and the board is not ruling anything in or out.”

There was no firm indication of the timing for rate cuts, and the RBA is forecasting a return to the target inflation next year or in the middle of 2026.

The S&P/ASX 200 Index had gained 0.41% to 7,707 points at 6pm NZ time.

The Bank of Japan raised short-term interest rates from minus 0.1% to between 0% and 0.1% because of increased wages – thus ending the negative rates regime after nearly eight years and heralding the first rate rise in 17 years.

Japanese unions have clocked the largest wage increases in more than three decades.

Local market

At home, KMD Brands was down 1c or 1.92% to a new post-covid low of 51c – its high was $2.62 on Oct 1, 2013 – after reporting a net loss of $9.66m for the six months ending January. The retailer had earlier warned the market about a slump in sales.

Group revenue fell 14.5% to $468.64m because of “weaker consumer sentiment, the warmest winter on record in Australia and an over-reliance on winter weight product.” Gross margin improved 10 basis points to 58.8%.

Kathmandu’s sales were down 21.5% to $152.3m; Rip Curl’s declined 9.2% to $278.3m, and Oboz’s fell 20% to $38m. KMD is not paying an interim dividend.

Sullivan said KMD reiterated its earnings guidance. “There was no surprise there, but nonetheless, it was a disappointing interim result.”

Other retailers Briscoe Group was down 2.5c to $4.60; Hallenstein Glasson declined 10c to $6.20; The Warehouse decreased 2c to $1.36; and Michael Hill was unchanged at 72c.

Mainfreight was up $1.19 or 1.76% to $68.69; a2 Milk gained 12c or 1.89% to $6.48; Auckland International Airport added 10.8c to $8.20; Freightways collected 23c or 2.73% to $8.65; and Restaurant Brands increased 8c or 2.46% to $3.33.

In the energy sector, Meridian was up 19.5c or 3.48% to $5.795, and Contact increased 19c or 2.33% to $8.36.

Heartland Group rebounded 2c or 1.71% to $1.19; Scales Corp rose 14c or 4.44% to $3.29; Kiwi Property was up 2c or 2.44% to 84c; Vulcan Steel increased 15c or 1.79% to $8.55; Steel & Tube gained 2c or 1.94% to $1.05; and Synlait Milk added 2c or 2.86% to 72c.

Scott Technology declined 10c or 3.33% to $2.90 after telling the market its chief executive, John Kippenberger, is stepping down at the end of May after nearly five years in the role.

Ebos Group was down 54c to $36.53; Tourism Holdings declined 6c or 1.83% to $3.22; AFT Pharmaceuticals shed 12c or 3.85% to $3; Third Age Health decreased 3c or 1.79% to $1.65; and Green Cross Health was down 2c or 1.85% to $1.50.

Arvida Group, unchanged at $1.04, has a conditional agreement for the $30m sale of Strathallan retirement village in Timaru. The deal is likely to be completed at the end of next month.

Tags: Market Close