NZ market ignores Budget to end day softer

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The New Zealand sharemarket largely ignored the Budget to end weaker, which was driven partly by a fall in infrastructure investor Infratil and offshore influences.

Friday, May 23rd 2025, 7:00PM

by BusinessDesk

The S&P/NZX 50 Index ended down 0.52%, or 65.75 points, at 12,596.50, with 44.7 million shares, worth $141.5m trading hands.

There were 73 rises and 63 falls on the main board.

Salt Funds managing director Matt Goodson said the Budget was seen as a mild positive for the market.

“A lot of the things in the Budget were positive at the margin for the economy, but they were pretty small. In terms of the economic trajectory or the path of interest rates, I don’t think there was anything to see.”

Global influence

Attention once again centred on global interest rates in light of the US Government’s burgeoning debt burden.

In Japan, 10-year bond yields were up at 1.56% from just 0.8% last October.

“That’s huge for Japan and for people who fund themselves in Japan, so there will be reverberations around the world,” Goodson said.

In the US, 10-year Treasuries traded at 4.53%, having started the month at just 4.16%, showing the “bond market vigilantes” were back in force.

Goodson said Infratil’s 36c (3%) fall to $11.15 was the result of America’s “Big Beautiful Bill” that cuts back on renewable energy investment.

The market saw it as negative for Infratil’s US renewables energy developer Longroad because it affects tax credits and the ability to trade them.

Longroad represents about 10% of Infratil’s valuation.

Uncertain times

As a sign of uncertain times, Restaurant Brands (up 10c at $3.30) did not give earnings guidance at its annual meeting.

“Looking ahead, the pace of recovery is proving slower than anticipated while inflation and volatility persist,” Restaurant Brands chair José Parés Gutierrez said.

Spark – the subject of flimsy rumours this week that it had attracted interest from two private equity investors – firmed 5c or 2.2% to $2.26.

Software specialist Gentrack rallied 32c or 2.8% to $11.75 on a rumour that it had won a contract in Bulgaria.

Infrastructure firm Channel gained 8c to $2.10 after telling shareholders at the annual meeting that the company’s dividend payout would lift to 70-90% of normalised free cash flow from 60-70%.

Channel also said it may seek foreign exempt dual-listing on the ASX.

Among the small caps, Wasteco was unchanged at 2.2c after the Christchurch-based company said it had won a $40m nine-year contract with the Ashburton District Council to deliver waste management services across the district.

Eroad drives up

One of the biggest gainers on the day was transport software specialist Eroad, which rallied by over 10% at one point, only to end just 3c higher at 94c.

Looking ahead, Turners Automotive (down 7c at $6.00) will report its annual result on Monday.

OCR move awaited

The Reserve Bank’s next decision on the Official Cash Rate is due on Wednesday. Most economists expect a 25-basis-point cut to 3.25%.

Fisher and Paykel Healthcare, whose stock fell 64c to $36.11, is due to report its annual result on the same day.

Fonterra (units down 22c at $6.01) will release its third quarter update and its first milk price forecast for 2025/26 on Thursday.

Ryman Healthcare (steady at $2.50) is due to report the same day, as is Mainfreight (up 64c at $67.00).

Tags: Market Close

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