Interest rates still talk of the town on NZ's market

After two days of Australasian monetary hikes, New Zealand’s market was still very much in an interest-rate frame of mind today, with added volatility from US markets overnight edging the market down by the end of the day's trading.

Thursday, October 6th 2022, 6:00PM

by BusinessDesk

The S&P/NZX 50 index fell 54.8 points or 0.49%, to 11,125.24. Turnover was $83.4 million.

ASB’s Mark Smith said yesterday’s hike by the Reserve Bank (RBNZ) – which didn’t stray from markets' expectations, unlike the Reserve Bank of Australia's – showed the “stark divide” between Australasian central bank outlooks.

“The RBNZ may not arguably have the same weight as the RBA in global markets, but timing is everything,” he wrote in a note this morning.

Hamilton Hindin Greene’s Grant Davies told BusinessDesk that interest rates were still very much dominating the market.

“We're really just following the US market around at the moment and waiting for those inflation figures to sort of hopefully get under control,” he said.

Davies said interest rates would continue to be the topic of market conversation until the next company earnings season picked up in a few weeks.

A small smattering of corporate news helped break up the interest rate focus today, with Chorus and Pushpay leading the news front.

Wholesale broadband provider Chorus was down 0.5% to $7.60 after the Commerce Commission issued its final decision on the value of the assets that Chorus uses for delivering regulated fibre services to NZ consumers.

The commission valued the initial regulatory asset base (RAB) at $5.413b as at Jan 1, 2022 – $12m lower than the transitional value given in the commission’s decisions implementing the new regime in December 2021.

Pushpay Holdings’ share price jumped more than 5% in early morning trading after it announced its largest software-only agreement.

The church management software company told the New Zealand stock exchange (NZX) this morning it had signed an agreement with the US army chaplain corps, which would be using a tailored Pushpay software and apps solution for all its ministries.

Its shares ended the day up 3.6% to $1.15.

Cervical cancer tech company TruScreen Group appointed Beata Edling as its new chief executive. Edling joined TruScreen in October 2020 as medical affairs and market access lead and will replace Juliet Hull, who was interim CEO during the past 20 months. Hull will resume her role as a non-executive director of TruScreen. TruScreen’s shares soared over the day – more than 10% at one stage this afternoon – and ended the day up 9.1% to 48 cents.

Synlait Milk edged up 0.3% to $3.50. The milk company’s subordinated bond yield has dipped back below 8% as demand lifts. Synlait’s $180m five-year 2024 bonds, which have a face value of $1.00, are currently yielding 7.80% with a coupon of 3.83%. A week ago, they were at 8.25%.

Fonterra Shareholders’ Fund units fell 2.6% to $3, and infant formula giant A2 Milk was also down by 1.4% to $6.17.

Tower’s shares were flat at 65 cents after the general insurer announced it will pay $5.9m to acquire and assume Kiwibank’s rights and obligations relating to a portfolio of insurance policies Tower had underwritten.

The completion of the deal ends Tower’s strategy of acquiring legacy insurance books it underwrote for partners.

Fintech company PaySauce fell 9.4% on light value traded to 29 cents.

On the currency front, the NZ dollar was trading at 57.73 US cents, up from 57.48 cents on Wednesday.

Tags: Market Close