NZX50 breaks an eight day losing streak

The New Zealand sharemarket broke a sequence of down days with a welcome half% rise, helped by a positive financial result from big retailer Briscoe Group.

Wednesday, September 13th 2023, 6:28PM

by BusinessDesk

The S&P/NZX 50 Index sprung into life mid-afternoon and closed at the day’s high of 11.357.12, up 58.42 points or 0.52% after reaching a low of 11,264.49. The index had fallen on each of the previous eight trading days.

There were 62 gainers and 58 decliners on the main board, with 23.61 million shares worth $94.46m changing hands.

Greg Smith, head of retail with Devon Funds Management, said: “After the succession of down days, we’ll take that rise.

“There has been a hangover on the local market from a relatively average earnings season and uncertainty about the election, though the polls and party announcements have provided more clarity than a few weeks ago.”

Smith said markets will be closely watching the latest United States inflation numbers overnight. The August consumer price index is expected to show annual (headline) inflation running at 3.6%, up from 3.2%.

“Oil prices have been on a tear. The Federal Reserve is not expected to do anything this month, but it may increase interest rates in November,” he said.

US crude oil was trading at US$88.52 a barrel, its highest level since November.

Across the Tasman, the S&P/ASX 200 Index was down 0.74% to 7153.3 points at 6pm NZ time, having fallen 1.43% in the last five trading days.

Back home, the NZ Real Estate Institute's August statistics showed the housing market continued to improve. The house price index lifted 0.7% compared with July, with the South Island leading the way.

ANZ Research said homes have been selling faster, and sales are up.

“While we are certainly not characterising the housing market as strong, the data suggests momentum is building and is likely to continue throughout the spring,” ANZ said.

ANZ is still forecasting prices to rise 3% over the second half of this year before growth moderates in 2024 because of deteriorating job security and high-for-longer mortgage rates.

On the market

Briscoe Group was up 10c or 2.22% to $4.61 after reporting a solid result for the six months ending July. Revenue was up 0.35% to a record $369.24m, and net profit was down 6.3% to $42.75m.

Briscoe is paying an interim dividend of 12.5c a share on Oct 11, an increase of 4%. Briscoes Homeware delivered steady revenue of $229.4m and Rebel Sport $139.85m. Online represented 18.3% of group sales, and overall margins slipped from 45.64% to 43.73%.

Briscoe said, as previously reported, it will be difficult to replicate last year’s full-year record net profit of $88.4m. “However, this first-half performance against the widely reported retail slowdown gives us great confidence about our ability to produce a solid second-half result.”

Smith said Briscoe produced “a pretty resilient result in today’s climate. Higher prices due to inflation would have been a factor, as was the weak NZ dollar since Briscoe is a big importer. The dividend has gone up, and that’s hard to complain about.”

Ebos Group rose $1.45 or 4.12% to $36.675; Freightways increased 26c or 3.08% to $8.71; Port of Tauranga rebounded 18c or 3.16% to $5.87; and Precinct Properties added 4.5c or 3.96% to $1.18.

In the energy sector, Meridian gained 17c or 3.31% to $5.30; Genesis was up 5.5c or 2.26% to $2.49; and Manawa increased 7c to $4.40. Mercury Energy went ex-dividend and was down 15.9c or 2.61% to $5.93.

Radius Residential Care rose 2.3c or 14.65% to 18c after reporting strong trading for the year to date.

Radius now expects first-half operating earnings (Ebitda) of $9.8m-$10.5m, a 40 to 50% increase compared to the previous record of $7m for the same period last year. Radius said it had filled all vacant roles, and the 24 sites were fully staffed with qualified nurses and healthcare assistants, driving strong occupancy levels.

Sanford increased 15c or 3.93% to $3.97 after the Commerce Commission approved Sanford’s deal to sell much of its fishing quota of North Island inshore species to Moana NZ.

Other gainers were Vista Group, up 6c or 3.92% to $1.59; Napier Port, adding 4c or 1.75% to $2.33; Gentrack, rising 11c or 2.52% to $4.47; Accordant Group, collecting 3c or 2.56% to $1.20; and Black Pearl improving 3c or 5.26% to 60c.

Spark declined 5c to $4.91; Auckland International Airport decreased 7c to $7.93; Scott Technology shed 10c or 3.17% to $3.05; and Fonterra Shareholders’ Fund was down 8c or 2.41% to $3.24.

Air NZ, unchanged at 75c, told the market it carried 1.31m passengers in July, an increase of 7.4% on the same period last year. Revenue passenger kilometres were up 63.9% to $3.027m.

Air NZ said there was a significant mix change in July, with long-haul capacity growth and load factors substantially higher relative to short-haul.

Tags: Market Close