All quiet on the sharemarket front

After the shock of the Reserve Bank of New Zealand’s half a percent hike in the official cash rate, it was all quiet on the NZ sharemarket front with investors switching to Easter holiday mode.

Thursday, April 6th 2023, 6:43PM

by BusinessDesk

The S&P/NZX 50 Index had an up-and-down day, and closed at 11,870.08, ahead 3.25 points or 0.03% after reaching a high of 11,916.39 and a low of 11,833.74.

The index ended the shortened week flat and is up 3.4% for the year so far. There were trading blues the day before the four-day holiday weekend, with only 18.39 million shares worth $67.87m changing hands. The gainers (61) and decliners (60) were evenly divided.

Shane Solly, portfolio manager with Harbour Asset Management, said investors globally were getting anxious about the recession risk and it went up a notch in NZ with the official cash rate (OCR) rise.

“Local investors were holding a little bit of liquidity back in case something happens over the weekend. The more defensive stocks such as utilities and healthcare were holding up better than consumer discretionary, IT and industrial shares with the lag impact of the higher rates coming through.

“The Scarbro Construction liquidation indicates the real stress emerging in the construction and development sector, and the Reserve Bank is definitely not taking the heat out, at this stage,” Solly said.

He said the manufacturing data coming out of China was strong and the country’s economy is accelerating faster following the latest reopening, and that’s positive for the NZ market.

Currency and commodities

The NZ dollar fell back to the pre-OCR announcement level, trading at US62.92c against the American greenback after reaching the day’s high of US63.26c.

The ANZ World Commodity Price Index increased a further 1.3% in March, with stronger returns for meat largely offsetting weaker aluminium prices.

At home, Scales Corp surged 20c or 6.56% to $3.25 after updating the market that it escaped the ravages of Cyclone Gabrielle. Scales reinstated its full-year net profit guidance at $14m-$19m.

The apple exporter said its latest crop will be down 25% from its initial forecast, and total tree loss was 5% of total planted orchard area. Of this area, less than 50% will need to be replaced because of expiring leases.

Scales is increasing its focus on Mr Apple premium sales in Asia and the Middle East. The latest apple crop is 50% picked and 12% sold at 2021 price levels.

Solly said Scales had a much better outcome in terms of less damage and their recovery is important for Hawke’s Bay and NZ exporting. “There’s still work to be done but Scales has an effective team.”

Napier Port, down 2c to $2.59, also provided a post-Gabrielle update, saying container volumes for the six months ending March increased 5.7%, bulk cargo declined 9.3%, and cruise ship calls increased from one to 62.

The port company said prior to the cyclone, operating activities were tracking towards the top end of the previously reported guidance and there had been reduced cargo volumes from mid-February.

Second quarter container volumes decreased by 0.6% to 59,000 TEUs (20-foot equivalent units) compared with 60,000 in the same period last year. Bulk cargo was down 21.2% to 570,000 tonnes, with log exports declining 175,000 tonnes or 30.1%.

Leaders up

Market leader Fisher and Paykel Healthcare was up 39c to $27; Ebos Group gained 19c to $45.59; Port of Tauranga increased 11c or 1.78% to $6.30; Vector added 7c to $4.07 and Skellerup Holdings improved 11c or 2.2% to $5.11.

Other gainers were Restaurant Brands up 30c or 4.51% to $6.95; Sky TV increasing 5c or 12.96% to $2.60; Steel & Tube adding 2c or 1.87% to $1.09; ikeGPS rebounding 2c or 2.44% to 84c; and Green Cross Health rising 32c or 1.82per cent to $1.68.

Software firms Gentrack, specialising in utilities and airports, was up 6c or 1.9% to $3.21; Eroad (transport) gained 2c or 3.45% to 60c; Serko (travel) was down 5c or 2.22% to $2.20; and Vista Group (cinema) declined 5c or 3.7% to $1.20.

In the retirement sector, Summerset Group gained 10c to $8.79, Ryman Healthcare was down 8c or to $5.30; Oceania Healthcare declined 3c or 4% to 72; and Arvida Group was up 1c to 98c.

Mainfreight declined $1.28 or 1.83% to $68.72; a2 Milk was down 12c or 1.93% to $6.09; Freightways shed 25c or 2.61% to $9.32; Briscoe Group decreased 14c or 2.94% to $4.63; ANZ Bank fell 41c to $24.58; Seeka drifted 5c to $2.85; and NZX was down 2c or 2.48% to $1.19.

Total equity trades on the NZX in March fell 34.2% to 994.93m and value was down 39.5% to $2.965 billion. Year to date, total trades are down 20.5% to 2.77m and value falling 16.3% to $8.96b.

Rua Bioscience, down 0.001c to 18.8c, has submitted its first medicinal cannabis dossier for regulatory licensing in the Polish market.

Asset Plus, unchanged at 25c, told the market the value of its portfolio has reduced by $13m at the end of March, and it has a sale agreement of $36.75m for its Auckland Stoddart Rd property. Asset Plus expects its net tangible assets to fall 3.6c a share to 40c.

Tags: Market Close