Retailers rally as Reserve Bank eyes payments system upgrade.

New Zealand’s S&P/NZX 50 index was the best performing market across Asia, bouncing back from a blue Monday as a2 Milk Co’s fortunes reversed despite some mixed broker views on the milk marketing firm’s outlook.

Mercury NZ was one of the stronger tailwinds for the benchmark as the electricity generator-retailer paid a bigger dividend than expected as it notched up a record result, while lines company Vector advanced as it delivered strong earnings growth.

Retailers including Hallenstein Glasson Holdings were among the day’s gainers as the Reserve Bank turned its microscope to the nation’s payments system, which it sees as pushing up transaction costs and hindering competition.

And Mainfreight warned shareholders it had to release its statutory share register to Australian genealogy and asset-recovery firm Worthington Clark.

Ups and downs

The NZX 50 climbed 144.2 points, or 1.1%, to 13,866.18, with 40 stocks gaining, five declining and five unchanged. The S&P/NZX 20 index futures contract for September gained 0.5% to 7,720, with 120 lots traded for a value of almost $923,000, while the NZX 20 jumped 1.1% to 7,800.78.

Turnover across the main board was $106.8 million, of which Auckland International Airport accounted for $12.5 million as it increased 0.8% to $8.80.

New Zealand was the best performing stock market across Asia, as rising oil prices and higher bond yields carried on the chill from Wall Street after US President Donald Trump said he wasn’t interested in extending the existing ceasefire with Iran, which expired today. Brent crude oil futures rose 0.6% to US$91.43 a barrel at 5pm in Auckland.

Japan’s Nikkei 225 index dropped 2.1% in late trading, while Hong Kong’s Hang Seng declined 0.7%, with a Bloomberg report that Anthropic’s annualised revenue was on track to hit US$65 billion failing to inject life into the tech-heavy bourses.

Australia was one of the few markets in positive territory, with the S&P/ASX 200 index up 0.1% in late trading, with beat-up blood plasma group CSL surging 17% as it said it expected to return to underlying earnings growth while BHP advanced 2.5% as booming copper prices underpinned its biggest dividend in four years.

The a2 Milk Co led the NZX 50 higher, climbing 10% to $8.54 as the milk marketing firm bounced back from Monday’s selloff when a cautious outlook spooked some investors. The company got a muted response from brokers, with Morgans, Forsyth Barr and Macquarie analysts cutting their target price on the stock, while Bell Potter lifted its target.

“While a2 Milk is typically conservative in setting guidance, we expect meaningful downgrades to consensus ebitda forecasts,” Forsyth Barr analysts Will Twiss and Matt Montgomerie said in a note to clients, cutting their target price by 49 cents to $9.05. “If a2 Milk can successfully execute its China-label recovery strategy, the building blocks are in place for strong earnings growth from FY28 off a reset FY27 earnings base, but this is far from risk-free.”

Mercury gained 2.6% to $6.81 after the gentailer reported a 36% jump in annual earnings to a record $1.07 billion, and hiked its dividend to 17 cents per share, more than the 15 cents predicted by analysts.

Vector advanced 1% to $4.93 after the lines company lifted annual earnings 20% in the first full year of the Commerce Commission’s pricing reset, with the board declaring a final dividend of 13.5 cents, in line with expectations.

New pipes

Retailers were among the day’s biggest gainers after the Reserve Bank opened a consultation on upgrading the nation’s payments system, which the central bank said could deliver economic benefits of $700 million-to-$1.3 billion by lowering transaction costs, raising productivity and bolstering competition.

Hallenstein Glasson climbed 5.4% to $10.75 and KMD Brands gained 3.6% to $1.73, while Briscoe Group advanced 2.2% to $4.60. Outside the benchmark, Warehouse Group fell 2.9% to 66 cents and Michael Hill International was unchanged at 41.5 cents.

Spark gained 1.8% to $1.955 after the telecommunications provider said director Vince Hawksworth would assume the chair when Justine Smyth retires after the company’s annual meeting in November.

Tower increased 0.3% to $1.86 after the insurer appointed Nib New Zealand director Sophie Haslem to its board.

Mainfreight rose 0.8% to $69. The company today urged shareholders to take care if they’re approached by Australian firm Worthington Clark after the Financial Markets Authority declined to back the logistics firm’s view that the request for the register didn’t pose sufficient risk of investor harm, unlawful use, or vexatious or frivolous conduct.

Serko posted the biggest decline on the NZX 50, falling 1.3% to $1.57, while Channel Infrastructure declined 1.2% to $3.31.

Infratil fell 0.7% to $14.95 as the infrastructure investor reaffirmed annual guidance for earnings to grow 21% in the current financial year at its annual meeting in Wellington.

Outside the NZX 50, Scott Technology jumped 7.7% to $2.81 after the automation systems firm said it secured contracts in North America and Europe worth $20 million.

The kiwi dollar fell to 58.80 US cents at 5pm in Auckland from 59.10 cents yesterday, with Statistics New Zealand figures showing a 0.7% increase in the estimated population growth, while Reserve Bank data showed a small increase in foreign holdings of government bonds.

Reporting by Paul McBeth.