NZ sharemarket lifts after positive news from the US

Spurred by Wall Street, the New Zealand sharemarket rebounded nearly one percent, and Hallenstein Glasson reached a 12-month high on the likelihood that it will be included in the NZX top 50.

Friday, April 28th 2023, 6:21PM

by BusinessDesk

After two down days, the S&P/NZX 50 Index ended the week with a gain of 101.62 points or 0.85% to 12,019.84. The index has now risen 4.6% for the year so far.

There were 85 gainers and 45 decliners over the whole market on improved volume of 49.31 million shares worth $157.91m.

Clothing retailer Hallenstein Glasson surged 41c or 7.02% to $6.25 - it was at $6.27 on April 7 last year – on speculation that it will replace Pushpay Holdings in the top 50 after the United States-based software company delists on May 10 following the takeover.

There was also a belated market response to Hallenstein Glasson’s improved half-year result after releasing its interim report.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said passive investment funds would need to buy Hallenstein Glasson shares to match its index weighting.

“That represents about 1.4m shares. Hallenstein is not a highly liquid stock and the funds will have to buy at any price. Maybe some of them have moved early on the strong suspicion that it will be included in the top 50,” he said.

There were 182 Hallenstein Glasson trades worth $471,400. Hallenstein Glasson confirmed in its interim report a 74.8% increase in net profit to $20.82m on revenue of $223.29m, up 30.9%, for the six months ending Feb 1. The previous corresponding period was impacted by covid.

Hallenstein Glasson said the trading environment for the first eight weeks of the winter season has been challenging with the cost of living and inflationary pressures impacting on consumers' discretionary spending. But group sales were 13.9% ahead, though the company warned that significant challenges are expected to continue.

US bounce

Robertshawe said the local market was livelier, taking a strong lead from Wall Street and experiencing end-of-the-month flows with portfolio rebalancing.

The technology giants Meta (owner of Facebook, Instagram and WhatsApp), Amazon, Alphabet (Google), Microsoft and Apple exceeded market expectations with their first-quarter results. Meta was up nearly 14% to US$238.56 (NZ$388.30).

The Dow Jones Industrial Average increased 1.57% to 33,826.16 points; S&P Index gained 1.96% to 4135.35; and the technology-driven Nasdaq Composite rose 2.43% to 12,142.24 and is up 16% for the year.

It was the best day since January for the Dow Jones and S&P 500 and since March for the Nasdaq.

At home, market leaders Fisher and Paykel Healthcare was up 44c to $27.68; Spark gained 7c to $5.23; and Infratil increased 23c or 2.47% to $9.55.

Energy stocks were strong. Meridian increased 24c or 4.65% to $5.46; Contact added 10c to $7.83; and Mercury was up 9c to $6.34.

Ryman Healthcare added 7c to $5.30; Serko was up 4c or 1.94% to $2.10; Kiwi Property increased 2c or 2.22% to 92c; and My Food Bag collected 1c or 5% to 21c.

Synlait Milk improved 5c or 3.21% to $1.61, and a2 Milk was up 3c to $5.90.

Restaurant Brands continued its strong run, rising 13c or 1.78% to $7.43 and gaining more than $1 in the past week.

Smartpay Holdings increased 10c or 6.9% to $1.65; T&G Global was up 5c or 2.49% to $2.06; Embark Education rose 6c or 10.53% to 63c; Foley Wines added 3c or 2.27% to $1.35; and Move Logistics gained 4c or 4.55% to 92c.

Ebos Group was down 26c to $44.30; Port of Tauranga fell 23c or 3.52% to $6.341; Briscoe Group decreased 8c or 1.75% to $4.50; Winton Land shed 5c or 2.44% to $2; and MHM Automation declined 3c or 3.23% to 90c.

NZ Automotive Investments rose 4c or 15.38% to 30c after telling the market it has arranged a replacement trade finance facility for its retail brand, 2 Cheap Cars.

NZ Auto is expecting net profit of $1.3m – including one-off restructuring costs of $1m – for the year ending March compared with $2.6m in the previous corresponding period.

Cannasouth declined 0.005c to 29c after shareholders backed the merger with Katikati-based medicinal cannabis company Eqalis Group. Cannasouth said it has already obtained binding investment commitments for $4.2m of its $9m capital raise. Fellow medicinal cannabis stock Rua Bioscience added 0.007c or 3.89% to 18.7c.

NZ Rural Land Company, unchanged at 89c, has bought a further 737ha forestry property in the Manawatu-Whanganui region for $8m. Like the previous purchase, the property is leased to NZ Forest Leasing for 16 years.

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