NZX50 jumps on index changes and higher confidence

The New Zealand sharemarket jumped nearly one percent as business confidence reached its highest level for nearly two years, albeit still comparatively low.

Monday, July 31st 2023, 6:31PM

by BusinessDesk

The S&P/NZX 50 Index had a late surge, in volumes and pricing, on end-of-month index changes and finished at 12,056.15, up 78.5 points or 0.66%. It was the index’s best close for ten weeks and has risen 5% so far this year.

There were 84 gainers and 51 decliners over the whole market, with 40.31 million shares worth $168.37m changing hands.

Meridian and Mercury Energy had increased weightings and gained 14.5c or 2.64% to $5.645 on trade worth $11.46m and 10c to $6.59 on trade worth $5.69m, respectively.

Precinct Properties, another beneficiary, was up 2c to $1.345 on trade reaching $1.63m.

Auckland International Airport, increasing 13c to $8.40, topped the individual trading list with a turnover of 3.85m shares worth $32.38m.

The latest ANZ survey titled “Running an orange light” showed business confidence lifted another 5 points in July to minus 13, the highest since September 2021. Expected own activity, a better indicator for the state of the economy, the bank says, eased 2 points to plus 1.

ANZ said the economy is slowing, but it’s certainly not coming to a sudden stop. There were lifts in export intentions and residential construction intentions, as well as business confidence. Employment intentions, investment intentions, capacity utilisation and profit expectations were little changed.

Fiscal stimulus, population and solid household income growth, and now a bottoming housing market were meaningful offsets to the lagged impacts of tighter monetary policy, weakening export demand, and cost-of-living pressures.

A net 62% of respondents in the retail sector expected to increase their prices in the next three months. The bank said that’s high but the lowest result since March 2021.

Adding a positive note

Shane Solly, portfolio manager with Harbour Asset Management, said the index changes, here and offshore, and the business confidence survey added a positive note to the market.

“The story of the month has been the earnings results (in the US) coming in okay, and with interest rate increases peaking, investors have been returning to the sharemarket and investing in a broader range of stocks. Maybe a recession will be softer than people expected.”

Fisher and Paykel Healthcare was up 27c to $24.57; Ebos Group gained 29c to $38.55; Freightways increased 8c to $8.56; a2 Milk added 9c to $5.52; Fletcher Building improved 8c to $5.58; and Infratil collected 8c to $9.95.

Retailers Briscoe Group increased 13c or 2.9% to $4.61, and Hallenstein Glasson was up 15c or 2.4% to $6.40. SkyCity Entertainment collected 5c or 2.26% to $2.26; Ampol rose $3.70 or 11.56% to $35.70; Gentrack increased 16c or 3.7% to $4.48; Genesis Energy was up 5c or 1.88% to $2.71; and Restaurant Brands gained 26c or 4.17% to $6.49.

In other property stocks, Stride was up 2c to $1.53, and Property for Industry gained 4c to $2.48.

Tourism Holdings gained 8c or 2.31% to $3.54; Sky TV increased 5c or 2.04% to $2.50; Steel & Tube was up 3c or 2.38% to $1.29; and Comvita added 5c to $3.19.

Winton Land, gaining 6c or 2.58% to $2.39, has filed an amended statement of claim in the Auckland High Court seeking $138.5m in damages against Kainga Ora, alleging anti-competitive conduct under the Commerce Act. The claim involved Winton’s Sunfield urban development. Mainfreight managing director Don Braid spent $677,700 buying 10,000 of his company’s shares on-market at $67.77 a share.

Mainfreight’s share price was down 14c to $67.85.

Solly said it was always good seeing an executive step up and put in a meaningful investment and commit to the company.

Napier Port declined 5c or 2.04% to $2.40; Smartpay Holdings decreased 6c or 3.17% to $1.83; and Accordant Group shed 9c or 6.57% to $1.28.

PaySauce was down 1.5c or 6.25% to 22.5c; 2 Cheap Cars fell a further 12.5c or 22.73% to 42.5c; and Blackpearl Group declined 3c or 5.56% to 51c.

TASK Group, down 3c 4.92% to 58c, told the market it used operating cash of $5.8m in the June quarter compared with generating $7.4m in the previous quarter. The group has $20.5m in cash compared with $28.3m at the end of March.

Enprise Group, which has a 33% holding in telecom billing company Datagate Innovation, was unchanged at 64c. Datagate reported annual recurring revenue of $3.3m for the June quarter, and the operating earnings (Ebitda) loss was $9,000, its best bottom-line result so far.

Tags: Market Close