Market flat as property stocks fall on National policy

The New Zealand sharemarket was flat, and property stocks were weaker after the National party followed Labour and confirmed commercial building depreciation tax breaks would end next year.

Wednesday, August 30th 2023, 6:33PM

by BusinessDesk

The S&P/NZX 50 Index had a choppy session when National announced its $14.6 billion tax plan and closed at 11,521.12, down 7 points or 0.06%. The index reached an intraday low of 11,473.4 points and had a late flurry.

There were 69 gainers and 60 decliners over the whole market on volumes of 35.02 million shares transactions worth $128.18m. Summerset Group, up 4c to $9.90, had $20.82m worth of its shares change hands.

Greg Smith, head of retail for Devon Funds Management, said the National tax plan was net positive for NZ Inc and is providing relief for those hit hardest by the cost-of-living crisis – NZ households.

“But property companies have been put on the back foot with the depreciation tax breaks ending – and that involves Auckland International Airport, which has one of the biggest property portfolios in the country.”

Smith said the deluge of company results was all done, and investors were taking stock and digesting all the information.

“The results didn’t shoot the lights out, and those companies in line with expectation had a weaker reaction on the market. Mostly, there were conservative outlooks, and those companies who were more upbeat, such as Tourism Holdings, benefitted,” he said.

Across the Tasman, the S&P/NZX 50 Index had risen 1.19% to 7296.5 points at 6pm NZ time as inflation in Australia continues to fall. The July consumer price index showed annual inflation at 4.9%, down from 5.4% in June. Annual price rises have eased from the peak of 8.4% in December.

Back in NZ

At home, the property sector fell 2.1% on the NZX index. Argosy was down 3.5c or 2.92% to $1.165; Kiwi decreased 2.5c or 2.76% to 88c; Goodman Trust shed 5c or 2.25% to $2.17; and Property for Industry declined 3c to $2.29.

Stride Property decreased 3c or 2.11% to $1.39; Investore was down 3c or 2.27% to $1.29; Precinct declined 3.5c or 2.8% to $1.215; and Vital Healthcare bucked the trend, gaining 2c to $2.27. Auckland International Airport declined 6c to $7.89.

Precinct Properties is offering $150m convertible notes in two series, with the ability to accept a further $50m oversubscriptions to fund future projects.

These include a new 24,000 sq m office building in Molesworth St Wellington, a final building in Auckland Wynyard Quarter Innovation Precinct, and developing the Auckland Downtown Carpark site.

The country’s biggest kiwifruit grower Seeka fell 18c or 6.98% to $2.40; Scott Technology was down 16c or 4.79% to $3.18; Contact Energy decreased 7c to $8.36; and Accordant Group decreased 6c or 4.88% to $1.17.

Fisher and Paykel Healthcare was up 14c to $22.41; Ebos Group gained 48c to $37.48; Manawa Energy surged 22c or 4.97% to $4.65; a2 Milk added 7c to $5.12; and the leading banks ANZ and Westpac increased 71c or 2.65% to $27.50 and 34c to $23.55 respectively.

Restaurant Brands was up 15c or 3.33% to $4.65; PGG Wrightson gained 12c or 3.02% to $4.10; Pacific Edge increased 0.008c or 8% to 10.8c; and Rua Bioscience improved 1.2c or 12.12% to 11.1c.

Retailers gain

Among retailers, The Warehouse gained 4c or 2.44% to $1.68; KMD Brands was up 2c or 2.44% to 84c; and Michael Hill collected 2c or 2.04% to $1.

Hallenstein Glasson was up 3c to $6.02. The clothing retailer had earlier told the market that sales for the year ending Aug 1 increased 16.7% to $409.71m compared with the previous year, and net profit is expected to be $31.8m-$32.3m, up 25.2%.

Fletcher Building was unchanged at $4.91 as building consents continued to decline. Consents for new houses were down 25% to 3058 in July compared with the same month last year, and the total consents for the past year were 43,487, down 14%. Standalone house consents were down 23% and multi-units 6.4% over the past year.

Carpet maker Bremworth gained 3c or 7.5% to 43c after reporting a 6% drop in revenue to $89.7m and a 393% increase in net profit to $11.03m for the year ending June.

Bremworth’s result was boosted by a $35.5m progress insurance payment for the Cyclone Gabrielle impact that closed the Napier facility. The cost of reinstating the facility is $112.7m-$162m, and Bremworth expects significant further insurance payments. Enprise Group, unchanged at 66c, reported a 10.7% in revenue to $20.65m and a net loss of $11.93m for the year ending June.

Enprise said the breach of BNZ banking covenants continues, and the board will seek a further waiver. Enprise is making a one-for-five rights issue at 50c a share to raise $1.743m.

MHM Automation, down 1c to 99c, increased annual revenue by 44% to $97.83m and net profit by 123% to $3.96m, boosted by two months of trading from Wyma Engineering.

Tags: Market Close