NZ market braces for key CPI data

A flurry of corporate news kept New Zealand’s share market occupied but the market still ended the day in a sombre mood as investors braced themselves for the release of NZ inflation data on Tuesday.

Monday, October 17th 2022, 6:00PM

by BusinessDesk

Hamilton Hindin Greene’s Grant Williamson said NZ’s quarterly consumer price index (CPI) numbers out tomorrow were the reason for the domestic market’s subdued nature today.

“We’ve seen a reasonable amount of selling on the market and that's really ahead of the inflation figures, which are due out tomorrow morning,” he told BusinessDesk.

NZ’s major banks expect consumer price inflation to abate in the third quarter, with the annual consumer price index (CPI) dipping to between 6.5% and 6.8% – down from 7.3% in the second quarter.

BNZ is picking a 6.5% CPI, as part of a general downturn in the coming quarters, while Kiwibank is projecting consumer prices to rise 1.7% for the quarter and headline CPI coming in at 6.8%.

The S&P/NZX 50 Index fell 82.2 points, or 0.76%, to 10,785.92. Turnover was very light at $78 million.

General insurer Tower jumped 5.7% to 65 cents after saying its annual underlying profit beat expectations by almost 30% – but warned the bottom line was dragged down by refunding overcharged customers and extra provisioning for the Canterbury earthquakes.

The general insurer said its underlying profit – excluding large events – was about $40m in the year ended Sept 30. This is up from $30.8m a year earlier and beating the forecast for earnings of between $35.4m and $39.4m.

Cancer diagnostic company Pacific Edge revealed its test processing was up 11% in the September quarter before, with total processing coming in at 14,916 tests across its labs for the six months to September 2022.

Cxbladder tests across both its New Zealand and US labs jumped by 36% year-on-year to 7,861 tests for the third quarter. Pacific Edge was up 3.3% to 47 cents.

Fonterra is planning to spend $1 billion on reducing its carbon emissions and improving water efficiency to trim 30% from carbon emissions by 2030.

Capital expenditure will include investment into “energy efficiency initiatives” and include transitioning sites that use natural gas to biomass, biogas and electricity and switching fuels at the nine manufacturing sites that still use coal.

Fonterra Shareholders’ Fund Units were flat at $3.05 per share. Synlait was down 2.5% to $3.14 and A2 Milk edged down 0.2% to $5.94.

Air NZ fell 1.3% to 74 cents after the airline made an offer of up to $75m for five-and-a-half year unsecured and unsubordinated fixed-rate bonds which will be maturing on April 27 2028. The offer opens today and will close on October 20.

Auckland Airport also fell 1.6% to $7.085.

Aged-care provider Ryman Healthcare was down 0.9% to $8.46 after it said it's reducing the number of care beds in its new villages by as much as two-thirds due to government underfunding for aged care.

At its investor day today, the company told investors that newer villages would have between 40 and 60 care beds, compared to 120 or more in the past.

On the other hand, AFT Pharmaceuticals had a good day and jumped 3.7% to $3.62, along with Restaurant Brands, which was up 3.6% to $7.30.

Property stocks took a bit of a pummelling with PGG Wrightson down 3.3% to $4.10 and Kiwi Property Group falling 2.9% to 83.5 cents.

Goodman Property Trust was down 1.5% to $1.95. NZ's largest listed property investor told the NZX that the trust’s interim financial result for the six months ended Sept 30 would be released to the market on Nov 10.

Property for Industry jumped up 1.7% to $2.40 after the company said it had settled the divestment of the company’s 20 Constance Street property in New Plymouth.

On the currency front, the NZ dollar was trading at 55.58 US cents at 3pm in Wellington, up from 56.55 US cents on Friday.

Tags: Market Close