NZ market flat as RBNZ keeps OCR at 5.5%

Neither New Zealand’s benchmark index nor economists were surprised by the fact there was no change made to the official cash rate by the Reserve Bank of New Zealand on Wednesday.

Wednesday, October 4th 2023, 6:07PM

by BusinessDesk

The S&P/NZX 50 Index was flat at 1,1235.05. Turnover was $108.1 million. There were 38 gainers and 85 decliners on the main board.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said the market had expected the non-move out of the RBNZ as most economists had predicted the central bank wouldn’t move the cash-rate dial before the election was over.

Robertshawe hadn’t been expecting the central bank to hike – although he had thought some weeks ago that the RBNZ might’ve raised the cash rate as NZ’s inflation hadn’t been falling away at the same pace as it had been overseas.

But thanks to the bond market tightening in recent weeks – and tighter financial conditions without the RBNZ having to do anything – it had solidified his expectation of no cash rate change, which came true today.

It’s not just pre-election jitters that are bleeding into the quiet market, the NZX released its shareholder metrics for September on Wednesday, which showed trading has also dipped more than 25% in the year to date.

On the company news front, honey company Comvita had its annual general meeting on Wednesday, and its chair Brett Hewlett said one of the “great challenges” for corporations was attracting and retaining talent.

The honey producer now has 559 global staff – or 630, if new staff from its recent acquisition, honey retailer HoneyWorld Singapore, were counted.

Comvita was down 4 cents or 1.2% to $3.20 by early evening.

Westpac announced it had concluded the sales process for its Pacific banking businesses and would retain Westpac Fiji and Westpac Bank PNG Limited. The bank fell 2.5% or 56 cents to $22.34.

Other gainers today were tech company Rakon up 2 cents or 2.8% to 74 cents, Scales Corp rising 6 cents or 2% to $3.05, and Meridian Energy up 7.5 cents or 1.5% to $5.23.

Auckland International Airport was the stock that traded the most in value over Wednesday and was up 10 cents or 1.3% to $7.86 by early evening.

Vista Group had the biggest fall on the index, down 10 cents or 6.6% to $1.41, while medicinal cannabis company Cannasouth slumped 1.3 cents or 6.2% to 19.7 cents. KMD Brands edged down 2 cents or 2.5% to 79 cents.

The NZ dollar was trading at 59.04 US cents at 3pm in Wellington, down from 59.38 on Tuesday. The trade-weighted index was at 70.40, from 70.69 on Tuesday.

Tags: Market Close