NZ shares edge higher as US-China trade talks drag on

New Zealand shares rose as investors count down for China and the US to cut a trade deal before tariffs take effect in 10 days.

Friday, December 6th 2019, 6:43PM

by BusinessDesk

The S&P/NZX 50 Index increased 18.41 points, or 0.2 percent, to 11,276.20. Within the index, 21 stocks rose, 18 fell and 11 were unchanged. Turnover was $126.1 million.

US tariffs are set to kick in from Dec. 15, and investors have been reacting to headlines on the minutiae of what would be the first phase of a wider trade deal to end a protracted dispute between the world’s two biggest economies.

Stock markets were moderately stronger across Asia, with Australia’s S&P/ASX 200 Index up 0.3 percent in afternoon trading, while Hong Kong’s Hang Seng increased 0.7 percent and Singapore’s Straits Times Index was up 0.1 percent.

“The US dollar continued its recent slide, and gold rose, suggesting not all investors are convinced that a trade deal will arrive before the 15 December deadline for increased US tariffs on Chinese goods,” Michael McCarthy, chief market strategist at CMC Markets, said in a note.

Fruit exporter Scales Corp rose 1.4 percent to $4.97, recovering from yesterday’s decline when it projected flat 2020 earnings. Global logistics group Mainfreight was up 0.5 percent at $41.10 and milk marketing firm A2 Milk rose 0.5 percent to $15.17.

Fonterra Shareholders’ Fund units were among the day’s stronger performers, up 2.5 percent at $4.10. Fonterra yesterday raised its forecast payout to farmers due to strong global demand, and the company said first-quarter earnings improved on increased revenue and higher margins. The units were down 0.5 percent yesterday.

Peter McIntyre, an investment adviser at Craigs Investment Partners, said the update was a more conservative approach from Fonterra.

Mercury NZ led the market higher, up 2.8 percent at $4.92 on a volume of 1.6 million shares, in line with its 90-day average of 1.9 million.

Other yield plays were also stronger, with Goodman Property Trust up 1.4 percent at $2.19, Stride Property rising 0.9 percent to $2.26 and Meridian Energy advancing 0.8 percent to $5 on a volume of 1.7 million shares.

Gentrack Group fell 2.2 percent, or 8 cents, to $3.62 after shedding rights to a 3-cent dividend. That was the days’ biggest fall. Fisher & Paykel Healthcare fell 1.7 percent, or 36 cents, to $21.22 after shedding rights to a 12-cent dividend.

Genesis Energy declined 1.9 percent to $3.03.

Z Energy fell 1.6 percent to $4.84. The Commerce Commission yesterday recommended government regulate wholesale fuel markets to lower pump prices.

Spark New Zealand was the most traded stock on a volume of 6.3 million shares, more than twice its 3 million average. It fell 0.7 percent to $4.43.

Of other stocks trading on volumes of more than a million shares, Kiwi Property Group fell 0.3 percent to $1.545, Investore Property was up 0.6 percent at $1.845, and Contact Energy increased 0.6 percent to $7.23.

Outside the benchmark index, Rakon fell 5.3 percent to 27 cents. The company said underlying earnings before interest, tax, depreciation and amortisation was expected to be $9 million to $11 million in the year ending March 31, down from earnings of $13.3 million.

Millennium & Copthorne Hotels New Zealand rose 0.4 percent to $2.50 on an unusually large volume of 2.7 million shares. It typically trades on a volume of 16,000 shares. Refinitiv data showed a single trade of 2.66 million shares at $2.35 a share, which McIntyre said was a late order.

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