Aussie interest rate move boosts two sharemarkets

The sharemarkets on both sides of the Tasman enjoyed another strong day after the Reserve Bank of Australia put a hold on interest rate rises.

Tuesday, July 4th 2023, 6:25PM

by BusinessDesk

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The S&P/NZX 50 Index continued to track upwards following the afternoon announcement and closed at 11,980.33, gaining 63.46 points or 0.53% after reaching an intraday low of 11,875.56.

The S&P/ASX 200 Index staged a big turnaround when the Reserve Bank of Australia (RBA) said it was keeping the cash rate at 4.1%, at least until next month’s meeting.

The Australian securities exchange (ASX) index turned from a negative 0.11% to a gain of 0.44% to 7,277.7 points at 6pm NZ time.

On the New Zealand stock exchange (NZX) market’s main board, there were 91 gainers and 35 decliners, with 23.8 million shares worth $86.83m changing hands.

Jeremy Sullivan, an investment advisor with Hamilton Hindin Greene, said the Australian market was buoyed by the RBA's announcement and this sentiment flowed into NZ.

“The Reserve Bank wants to see more economic data, and there was a broad-based lift in share prices,” he said.

Australian inflation was at 5.6% in May, down from 6.8% the month before, and retail spending is slowing, as more households feel the pressure of the repeated rate rises.

In NZ, the second quarter survey of business opinion showed a slight improvement in sentiment with 59% of businesses still pessimistic but up from 63% in the first quarter and the record 75% in the December quarter.

ANZ said that overall, the survey paints the picture of an economy that has been overheated but is in the process of turning the corner. This is broadly consistent with the Reserve Bank of NZ’s (RBNZ) take on things, but the slow pace of decline in some of the cost and pricing measures is a slight concern.

Honey business

Manuka honey producer Comvita was again busy on the corporate activity front. Comvita increased 16c or 5.26% to $3.20 after telling the market it has bought HoneyWorld Singapore for $10.36m. Comvita’s share price has risen nearly 10% in two trading days.

It earlier announced a new supply agreement, through a memorandum of understanding, with Chinese supermarket chain Ole.

Comvita said the HoneyWorld purchase would deliver a 22% improvement in its earnings per share, with HoneyWorld's revenue forecast at $15.85m for the 2024 financial year.

HoneyWorld is the largest manuka honey retailer in Singapore and Comvita will finish up with a 50% market share.

Mainfreight rebounded $1.90 or 2.71% to $71.90; Fletcher Building was up 11c or 2.03% to $5.54, Mercury Energy gained 9c to $6.54; a2 Milk also added 9c to $5.36; and Infratil increased 24c or 2.35% to $10.44 after one broker updated its target price to $11.90.

Chorus recovered 10.5c to $8.43; Delegat Group rebounded 35c or 4.05% to $9; and Restaurant Brands was up 19c or 3.09% to $6.34.

Retirement village operators Summerset Group was up 12c to $9.72, Oceania Healthcare was down 2c or 2.63% to 74c, and Arvida Group also slipped 2c to $1.23. Ryman Healthcare continued its steady recovery, gaining 8c to $6.75 and increasing 33% so far this year after hitting a low of $4.93.

Serko also continued its strong comeback, rising 10c or 2.67% to $3.85 after reaching $2.05 on April 21.

Other gainers were AFT Pharmaceuticals up 8c or 2.23% to $3.66; Vulcan Steel increasing 25c or 2.79% to $9.20; Winton Land adding 5c or 2.63% to $1.95; Eroad lifting 4c or 3.17% to $1.30; and Green Cross Health up 3c or 2.2% to $1.38.

In the banking sector, ANZ gained 34c to $25.97; Westpac was up 30c to $23.38; and Heartland Group picked up 2c to $1.72.

In the property sector, Investore increased 4c or 2.84% to $1.45; Precinct also gained 4c or 3.1% to $1.33; and Property for Industry was up 2c to $2.38.

Meridian Energy was down 11c or 1.96% to $5.50; Spark declined 8.5c to $5.055; Manawa Energy gave up 13c or 2.58% to $4.90; Rakon decreased 3c or 3.23% to 90c; Carbon Fund shed 8c or 5.8% to $1.30; and TradeWindow was down 1.5c or 5% to 28.5c.

Marsden Maritime Holdings, declining 1c to $4.95, warned the market about a softening in full-year results because of lower log volumes and container numbers caused by the impact of Cyclone Gabrielle.

Marsden expects underlying earnings before tax of $8m-$8.3m compared with $9.1m in the previous financial year.

PGG Wrightson was down 2c to $4.13 after deciding to appoint U Kean Seng as acting chair, while Lee Joo Hai remains a director. Lee has been charged under disclosure requirements in Singaporean securities regulation related to listed Hyflux of which he is a director.

Tags: Market Close