NZ investors quiet as investors await US inflation data

The New Zealand sharemarket posted a small gain but it still hasn’t fired up since the Easter break – and has an eye on the latest United States inflation.

Wednesday, April 12th 2023, 6:16PM

by BusinessDesk

The S&P/NZX 50 Index traded steadily from lunchtime on light volumes and closed at 11,917.5, up 43.92 points or 0.37% after reaching a morning low of 11,863.08.

There were 69 gainers and 60 decliners on the main board with 20.37 million shares worth $82.06m changing hands.

Matt Goodson, managing director of Salt Funds Management, said the local market is very quiet with little information coming through.

“The number of trades in the closing matching session have been more than those occurring in six and a half hours of torpor and boredom prior to that. It’s the school holidays following on from Easter and I think investors have taken the week off,” said Goodson.

The US March consumer price index (CPI), released overnight, should wake up the market. Inflation is expected to fall further, with economists predicting a CPI monthly rise of 0.2% compared with 0.4% in February.

After that, the health of the US economy and consumers will be put to the test as the first-quarter corporate earnings season gets underway.

Goodson said the March CPI will be a key focal point for markets as they get to grips over where the Federal Reserve cash rate will peak. The Fed is meeting again next month.

At home, telecommunications provider Chorus was up 10c to $8.55. In an intriguing notice to the market, Chorus said the crown has given approval for Australian superannuation fund UniSuper to acquire up to 20% of Chorus should it choose to in the future.

UniSuper, which increased its shareholding in Chorus from 7.5% to 8.5% in December, has $100 billion in assets, 450,000 members and concentrates on the higher education and research sector in Australia.

Goodson said Chorus fits into the long-term desires of super funds, and the question is whether Chorus can earn its regulated rate of return in the face of wireless broadband competition.

“Spark and One NZ (formerly Vodafone) provide their own infrastructure and keep the full margins. What can Chorus charge while losing market share in wireless broadband?” he said.

Ventia Services Group rose 14c or 5.07% to $2.90 after telling the market it has a new contract, worth $280m over the next two and a half years, with government corporation NBN Co, Australia’s wholesale broadband provider. Ventia will provide fibre connections on the NBN fixed line network for an additional 1.5m premises.

Leading the way

Market leaders Fisher and Paykel Healthcare and Meridian led the market higher, gaining 18c to $26.91 and 17.5c or 3.41% to $5.30 respectively.

Mainfreight increased $1 to $70.45; Infratil was up 19c or 2.07% to $9.35; a2 Milk added 90c to $6.24; and Genesis Energy collected 5.5c or 2.02% to $2.775.

In the port sector, South Port NZ was up 14c or 1.87% to $7.64; Tauranga gained 4c to $6.31; Napier was down 10c or 3.7% to $2.60; and Marsden Maritime declined 3c to $5.19.

Automation specialist Scott Technology surged 23c or 8.3% to $3 after reporting an impressive first-half financial result. Net profit increased 65% to $7.82m on revenue of $126.89m, up 11%, for the six months ending February. Dunedin-based Scott is paying an interim dividend of 4c a share on May 11.

Scott’s margins increased from 22% to 26% despite inflationary and supply chain pressures, and operating earnings (Ebitda) were up 20% to $15m.

Scott said its world-leading production technology in the core meat, materials handling and logistics, and mining sectors delivered 77% of revenue and 92% of margin.

Other gainers were NZME up 3c or 2.91% to $1.06; Michael Hill increasing 4c or 3.81per cent to $1.09; and Steel & Tube adding 3c or 2.8% to $1.10.

Ebos Group was down 64c to $45; Restaurant Brands decreased 33c or 4.8% to $6.55; Serko shed 5c or 2.33% to $2.10; Eroad declined 2c or 3.33% to 58c; Green Cross Health was down 45c or 2.37% to $1.65; and NZ Automotive Investments fell 2.5c or 8.62% to 26.5c.

Financial technology company PaySauce was up 1c or 3.7% to 28c after telling the market that recurring revenue increased 56% to $1.63m in the March quarter, and annual revenue rose 50% to $6.7m. Processing fee revenue was up 27% to $1.23m.

The Carbon Fund has been making a strong recovery from weaker wholesale prices, rising 6c or 3.26% to $1.90. It is now trading at its net tangible assets value after being below it. “There has been concern and confusion over the government’s policy for the carbon emissions sector,” said Goodson.

Tags: Market Close