NZ market waits for Fed decision

It was quiet on New Zealand’s sharemarket today, with the index ending the day flat, as little corporate – or global – news and last week’s shock inflation data out of the US left investors pensive.

Monday, September 19th 2022, 5:58PM

by BusinessDesk

The rest of the week looks more exciting though, with the biggest event in the financial calendar being the US Federal Reserve meeting to reset interest rates – with a 100-basis-point hike not out of the realm of possibility.

“With US consumer price index coming in stronger than expected last week, expectations are for the Fed to hike rates by 75 basis points this week, possibly even 100,” Kiwibank trader Mieneke Perniskie said.

The S&P/NZX 50 Index fell 48 points, or 0.42%, to 11,531.99. Turnover was very light at $72.3 million.

Synlait Milk was up 1.7% to $3.57 after announcing it had completed two key projects in the first phase of its decarbonisation roadmap.

The dairy manufacturer told the NZX that the two projects will enable a reduction of greenhouse gas emissions by 38,000 tonnes in 2023.

From 2026 – when the projects are expected to reach full capacity – the greenhouse gas emissions will be decreased by 58,000 tonnes.

Chief executive Grant Watson said Synlait had a “significant” environmental footprint which meant the dairy company had to have “strong sustainability credentials”.

“We’re committed to continuing to take a leadership role and deliver projects that accelerate our unrelenting passion for the planet and its people,” he said.

A2 Milk was down 1.4% to $6.15, and Fonterra Shareholders’ Units were flat at $3.42. Fonterra’s full-year results are out on Thursday.

ASB chief economist Nick Tuffley said in a note today that the next global dairy trade (GDT) auction was this Wednesday and he expected dairy prices would trend back up this season.

“Particularly as milk production is slipping in key export nations and China is experiencing drought conditions that will affect its own domestic supply,” he said.

Contact Energy was flat at $7.85 but with a turnover of $2.3m. The company announced this morning that it was considering making a five-and-a-half year offer of fixed rate, unsecured green bonds to institutional investors and NZ retail investors.

Building firm Fletcher Buildings was up 0.4% to $5.26.

Today, Kāinga Ora confirmed it's paying for compliance testing of a substitute plasterboard from Thailand in the wake of political pressure to wean itself off its dependence on Fletcher Building's Gib product.

Aged care provider Ryman Healthcare rose 1.1% to $9.05 and traded high volume throughout the day – $4.8m by early evening. Summerset Holdings however fell 0.6% to $10.85.

Petroleum company Ampol was down 6.4% to $34.86. At the end of August, the fuel conglomerate revealed it was going to sell a 49% stake in properties owned by Z Energy to the Australian stock exchange-listed Charter Hall Group in a leaseback deal.

Retailer KMD Brands – previously known as Kathmandu Holdings – has its full-year results out tomorrow. Today the retailer fell 2.9% to $1.

Hamilton Hindin Greene's Grant Davies told BusinessDesk that with retail spending currently being one of the “canaries in the coal mine” it would be interesting to see KMD’s results.

Pushpay shares were flat at $1.10. The stock fell over 10% last week on talk around the possible failure of a pending buyout.

Cancer diagnostic company Pacific Edge was trading down 5.9% to 48 cents.

Davies said Pacific Edge was still a “risk on” stock which put the stock in a tricky position as NZ’s market was still currently very much in a “risk off” phase.

Westpac was up 1% to $24.30 following news that it plans to list $600m of bonds on NZX's debt market, separately from its parent.

ANZ Bank was also up 0.7% to $26.52.

The NZ dollar was trading at 59.73 US cents at 5pm in Wellington, down from 59.59 US cents on Friday.

Tags: Market Close