by Paul McBeth
New Zealand’s S&P/NZX 50 index edged lower in a soft start to July across Asia, with power companies Meridian Energy and Mercury NZ weighing on the benchmark, while Australian banks were a drag across the Tasman.
Exporters such as Fisher & Paykel Healthcare and a2 Milk Co were generally weaker as the kiwi dollar gained ground against the greenback, with investors pondering whether the Reserve Bank will hike interest rates next week after the International Monetary Fund recommended monetary stimulus be dialled back.
Communications companies were mixed after the government announced its plans for the upcoming radio spectrum auction used for mobile services, with Spark New Zealand advancing and broadband network operator Chorus declining, while Infratil's One New Zealand is set for a leadership change.
And Bremworth surged to a six-month high after the Commerce Commission cleared the carpetmaker to sell its assets to rival Godfrey Hirst’s parent.
A new month
The NZX 50 decreased 11.16 points, or 0.1%, to 13,610.5, with 22 stocks declining, 21 gaining and seven unchanged. The S&P/NZX 20 index futures contract for September was untraded, with the NZX 20 edging down half a point to 7,710.02.
Turnover across the main board was $177.5 million, of which Auckland International Airport accounted for $24.3 million as it climbed 3.4% to $8.63 on the day’s biggest volume of 2.8 million shares.
“New Zealand’s share market hit a four-month high yesterday and it’s giving back a little bit of those gains today,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene.
Stock markets across Asia were mixed in the first day of the new quarter, with Australia’s S&P/ASX 200 index down 0.7% in late trading, Japan’s Nikkei 225 index up 0.7% and South Korea’s Kospi falling 1.4%.
Dual-listed lender ANZ Group Holdings posted the steepest decline on the local benchmark, falling 3.3% to $41.57, with Australian banks weaker across the Tasman. Westpac Banking Corp fell 2.4% to $41.97 on the NZX.
Meanwhile, the power companies were the biggest drag on the NZX 50 as Meridian fell 2.1% to $5.70, Mercury declined 1.2% to $6.82 and Contact Energy slipped 0.9% to $9.24. Genesis Energy bucked the trend, gaining 0.4% to $2.60.
Interest-rate sensitive companies were mixed after ASB Bank cut some mortgage and term deposit rates to match the recent declines in swap rates, while the IMF’s latest report on New Zealand recommended the Reserve Bank should start unwinding monetary stimulus this year.
Fletcher Building fell 3.2% to $3.28 and Ryman Healthcare declined 1.8% to $2.22, while Goodman New Zealand advanced 3% to $2.09 and Summerset Group Holdings rose 1.5% to $8.83.
Rate reviews
Bond traders are pricing in a 78% chance New Zealand’s Reserve Bank will raise the 2.25% official cash rate at next week’s policy review, a view shared by ANZ economists, although other bank economics teams have pushed out their expectations for the initial hike to September.
“The recent business confidence survey will have given the RBNZ some confidence that they’re on the right course of action, with inflation expectations tracking north of 3% and the unemployment rate north of 5%,” Hamilton Hindin Greene’s Sullivan said.
The kiwi dollar held its overnight gains, trading at 56.74 US cents at 5pm in Auckland from 56.48 cents yesterday.
Exporters were generally weaker as the currency advanced, with F&P Healthcare down 1.2% at $38.55, a2 Milk falling 1.9% to $8.98 and Skellerup Holdings slipping 0.3% to $6.58.
Infratil advanced 0.5% to $15.50 after the infrastructure investor’s One New Zealand telecommunications business announced the departure of chief executive Jason Paris after eight years in charge, overseeing its separation from the Vodafone Group and subsequent rebranding. Chief financial officer
Nick Judd will take over the top job at the telco.
Meanwhile, rival Spark New Zealand gained 2.4% to $1.92 after the telecommunications carrier acknowledged the government’s intended policy direction for the renewal of spectrum for the upcoming expiry of rights to the 2300 and 2600 megahertz bands, which will offer 70% of existing holdings to current rights holders and 30 MHz in the 2600 MHz band to 2degrees, with the remainder sold through a competitive auction.
Spark said the proposed changes weren’t expected to have a material direct impact on its operations, but introduced an unwelcome level of uncertainty for the sector.
Broadband network provider Chorus fell 1.3% to $9.87.
Separately, the National Business Review reported Mercury would close its Now New Zealand broadband business, and would migrate residential customers to Mercury and business clients to a new provider.
SkyCity Entertainment Group posted the biggest gain on the day, up 6.4% at 58.5 cents, while stock market operator NZX rose 2.8% to $1.45 and Serko climbed 2.8% to $1.49.
Outside the benchmark, Bremworth surged 19% to 84 cents after the Commerce Commission cleared Godfrey Hirst’s parent, Mohawk Industries, to buy the carpetmaker’s assets. Bremworth chair Rob Hewett told the NBR he wouldn’t be surprised if other offers emerged.
And Synlait Milk unwound Tuesday’s slump, rising 13% to 40.5 cents.
Paul is a staff writer for Good Returns based in Wellington.
| « Sharemarket has best quarter since Dec 24; And in positive territory halfway through this year |
Special Offers
No comments yet
Sign In to add your comment
© Copyright 1997-2026 Tarawera Publishing Ltd. All Rights Reserved