NZ sharemarket makes small gain

A cautious New Zealand sharemarket crawled to a slight rise as it awaited two key economic events – here and in the United States.

Wednesday, March 20th 2024, 6:39PM

by BusinessDesk

The S&P/NZX 50 Index was down in the morning and up in the afternoon before closing at 11,832.71, up 14.8 points or 0.13% after reaching an intraday low of 11,768.7.

There were 66 gainers and 56 decliners over the whole market, with 28.54 million shares worth $110.13m changing hands.

Mark Lister, investment director with Craigs Investment Partners, said a lot is happening worldwide with central bank decisions, and markets are a little nervous.

“The main event is the US Federal Reserve (overnight), which will present a new set of economic forecasts and release its latest monetary policy decision. The markets are waiting to see when the Fed will start cutting interest rates, and they are still picking June or July,” he said.

“But there’s been two months of stronger-then-expected inflation reports. This might have unnerved the Fed and may mean the central bank doesn’t give the green light (for cuts) as soon as the markets think.”

He said the NZ gross domestic product (GDP) release for the December quarter will attract attention, even though it’s old news.

“If the GDP is another piece of evidence that the economy is slowing, then maybe the Reserve Bank will be inclined to take some action by cutting the official cash rate earlier than it’s let on.”

The latest Global Dairy Trade auction index dropped a further 2.8% following a 2.3% fall on March 5. Whole mile power was down 4.2% to US$3,143 (NZ$5,203) a metric tonne, and skim milk powder declined 4.8% to US$2,517.

Lister said dairy prices have had a hefty fall and that’s not great for the dairying sector.

“We want the payout to be at least $7.80 per kg of milk solids, and there’s a risk this could slip away with the way prices are tracking.”

Local market

The Warehouse Group increased 10c or 7.35% to $1.46 after reporting a first-half net loss of $23.66m and telling the market it is reducing costs and simplifying its business.

The group is selling or closing TheMarket.com platform by the middle of the year and redirecting online sales through The Warehouse site and app "where there is improved profitability".

Group sales for the six months ending Jan 28 were $1.63 billion, down 4.9% and net profit from continuing operations was $31.84m, up 34.6%.

The Warehouse store sales declined 4.7% to $9567.6m; Warehouse Stationery 5% to $117.9m; and Noel Leeming was down 2.2% to $544.4m. The Warehouse’s bottom-line result was mainly impacted by the $55.5m operating loss and write-down from Torpedo7, which was sold to Tahua Partners for $1.

Lister said, “We’ve seen a full set of numbers and know they were underwhelming, but they turned out to be slightly better than expected.

There was a relief rally in The Warehouse’s share price after a period of weakness. "The Warehouse, like other retailers, were facing quite a few challenges with tough market conditions.”

Other retail stocks Briscoe Group was down 4c to $4.56; Hallenstein Glasson declined 8c to $6.12; Michael Hill increased 5c or 6.94% to 77c; and KMD Brands was up 2c or 3.92% to 53c.

Spark was up 7c to $5; Summerset gained 10c to $11.10; a2 Milk added 8c to $6.56; Vista Group increased 4c or 2.09% to $1.95; and Vulcan Steel gained 15c to $8.70.

In the energy sector, Mercury was up 16c or 2.37% to $6.90; Meridian was down 4c to $5.755; and Manawa fell 12c or 2.74% to $4.26.

Fletcher Building declined 13c or 3.08% to $4.09; Ebos Group was down 76c or 2.08% to $35.77; Comvita shed 5c or 2.22% to $2.20; and Heartland Group decreased 4c or 3.36% to $1.15.

Rakon declined 6c or 4.96% to $1.17; Smartpay was down 3.5c or 2.39% to $1.43; Eroad decreased 3c or 3.9% to 74c; Accordant Group fell 5c or 7.35% to 63c; and Bremworth shed 2c or 4.08% to 47c.

Carbon Fund fell 16c or 8.79% to $1.66 following the latest auction, which saw 2.97m units, or 84% of those on offer, sold at the floor price of $64 a unit, fetching $190.35m. A unit represents one tonne of carbon, which emitters surrender to settle their emissions.

Tags: Market Close