Nearly $1b changes hands on NZX as indices rebalance

Nearly $1 billion worth of shares were traded in the May quarterly review of the MSCI global indices and the New Zealand sharemarket responded with a half percent fall.

Wednesday, May 31st 2023, 6:56PM

by BusinessDesk

The impressive volumes took place in the extended matching session as fund managers rebalanced their portfolios. The S&P/NZX 50 Index closed at 11,813.01, down 65.7 points or 0.55% after reaching an intraday high of 11,909.1.

There were 61 gainers and 72 decliners over the whole market with trading covering 220.21 million shares worth $948.68m.

Chorus was down 15c or 1.8% to $8.185, with 19.5m shares worth $159.91m changing hands; SkyCity Entertainment declined 11c or 4.76% to $2.20 on trade worth $69.62m; and Precinct Properties decreased 1.5c to $1.205 on trade worth $66.72m. All are being removed from the MSCI Small Cap index.

Ebos Group’s weighting in the Large Cap index went down slightly, and its share price increased 53c to $42.08 on trade worth $114.54m.

Amongst other leading stocks, Fisher and Paykel Healthcare declined $1.07 or 4.4% to $23.25 (trade worth $86.15m); Meridian Energy was down 13.5c or 2.48% to $5.31 (trade $43.12m); and Spark decreased 9c to $5.16 (trade $70.71m).

Auckland International Airport increased 13.5c to $8.875 (trade $86.85m), and Mercury Energy rose 34c or 5.47% to $6.56 (trade $47.31m).

Matt Goodson, managing director of Salt Funds Management, said the volumes in the last minutes of the trading session were like a Category 5 hurricane.

“There were a number of weighting changes for NZ stocks – and as more money has gone to the passive investment funds (which track the indices), this has ended up moving share prices around,” he said.

Meanwhile in Oz

Across the Tasman, the S&P/ASX 200 Index was down 1.64% to 7091.3 points, at 6.15pm NZ time, as inflation for the year ending April increased to 6.8% (higher than NZ’s 6.7%) from 6.3% in March, mainly because of rising fuel prices.

Goodson said the inflation outcome was higher than expected and there may be more Reserve Bank of Australia monetary tightening. The Reserve Bank suggested inflation would fall to the middle of its 2-3% target range in 2025.

“One of the key things the market here missed from our Reserve Bank was that while inflation has peaked, the chances of getting back to the 1-3% range any time soon look slim. The bank’s monetary policy will be tighter for longer,” he said.

Retirement village stocks had another strong day, with Summerset Group gaining 24c or 2.69% to $9.15; Ryman Healthcare up 7c to $6.35; Oceania Healthcare rising 6c or 7.69% to 84c; and Arvida Group also increasing 6c or 5.26% to $1.20.

Vulcan Steel increased 27c or 3.37% to $8.29; NZ Oil & Gas was up 4.5c or 12.5% to 40.5c; Sky TV gained 4c or 1.89 to $2.55; Eroad collected 4c or 6.15% to 69c; AFT Pharmaceuticals added 7c or 1.86% to $3.84; and NZ Automotive Investments was up 2c or 6.67% to 32c.

Automation specialist Scott Technology increased 9c or 3.38% to $2.75 after telling the market it continues to build a strong pipeline of new contracts, including a $12m automated modular mining system to Mineral Resources, representing the commercial launch of this product.

Scott has secured new materials handling contracts in Europe, including a $3.2m solution for A-ware Food Group and Colruyt, and a $7m multi-line palletising system for new dairy customer Incom Leone.

In the retail sector, Briscoe Group gained 10c or 2.27% to $4.50, and Michael Hill was down 2c or 1.92% to $1.02.

Leading wine exporter Delegat Group was down 22c or 2.26% to $9.50. Delegat had earlier told the market it has completed the 2023 harvest with 45,340 tonnes, up 1% on last year, and excellent quality. Cyclone Gabrielle resulted in a minor reduction in yield.

Synlait, declining 2c to $1.55, has reduced its forecast 2022-23 milk price to $8.20 per kgMS, from $8.30 per kgMS, because of the weaker-than-expected commodity prices and continued high cost of imported lactose. The opening forecast for 2023-24 is $8 per kgMS.

Other decliners were Mainfreight, shedding 60c to $69.40; Move Logistics, down 2c or 2.11% to 93c; Task Group, falling 3c or 5.26% to 54c; Pacific Edge decreasing 2.5c or 5.56% to 42.5c; Argosy Property giving up 3c or 2.68% to $1.09; and Steel & Tube down 4c or 3.45% to $1.12.

Medicinal cannabis company Cannasouth, up 0.005c to 30c, has raised $7.17m from shareholders and other investors.

In its first reporting period as a listed company, WasteCo’s annual revenue increased 83% to $34.39m and operating earnings (Ebitda) by the same increase to $56.9m. It had a net loss of $1.99 and its share price was down 0.001c to 7.6c.

Tags: Market Close