NZ shares lift as investors contemplate inflation's peak

The New Zealand sharemarket bounced back more than half a percent, with Napier Port producing a pleasing full-year financial result.

Tuesday, November 14th 2023, 6:29PM

by BusinessDesk

The S&P/NZX 50 Index picked up momentum at midday and closed at 11,173.28, up 80.25 points or 0.72% after reaching a morning low of 11,067.42.

There were 85 gainers and 43 decliners on the main board, with 21.37 million shares worth $77.41m changing hands.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said the market had a strong bounce (after two days of falls).

“Interest rates may have peaked, and some asset allocation may be occurring in New Zealand. A lot of our defensive stocks will benefit from a fall in rates,” he said.

Napier Port gained 7c or 2.97% to $2.43 – a rise of more than 9% in two trading days – after reporting a 3.4% increase in revenue to $118.38m for the 12 months ending September. Net profit was down 18.8% to $16.58m, and the port company is paying a final dividend of 3.55c a share on Dec 14.

Container volumes were down 12.7% to 222,000 TEUs (20-foot equivalent units), and bulk cargo declined 12.8% to 3.2m tonnes, with log exports falling 11.3% to 2.5m tonnes. But the return of cruise ships provided a $5.3m injection.

Robertshawe said Napier Port had a solid result, given the issues created by Cyclone Gabrielle.

Market leaders Fisher and Paykel Healthcare was up 32c to $21.87; Ebos Group increased $1.11 or 3.04% to $37.65; Mainfreight gained 71c to $63.01; and Auckland International Airport added 9c to $7.87.

Energy stocks Meridian was up 4c to $5.02; Mercury gained 6c to $5.97; while Contact was down 11c to $7.62.

Meridian told the market that national electricity demand was 1.9% lower in October, and retail sales declined 1.7% compared with the same month last year, but large business sales were up 27.7% and corporate 2.4%.

Amongst the retirement village stocks, Oceania Healthcare increased 3c or 4.41% to 71c, and Arvida Group also added 3c or 2.83% to $1.09.

Freightways was up 22c or 2.91% to $7.77; Scales Corp increased 7c or 2.33% to $3.08; Stride Property gained 4c or 3.13% to $1.32; and Restaurant Brands rebounded 23c or 6.93% to $3.55.

Sanford, unchanged at $3.91, reported a 4% increase in revenue to $553.39m for the 12 months ending September – its highest in five years. Net profit fell 82% to $10.01m, and Sanford is paying a final dividend of 6c a share on December 6.

The seafood company said the profitability of the salmon business was ahead of schedule, and the mussel division was slower to recover post-covid because of labour shortages.

The revenue increase reflected strong pricing and customer demand despite a drop in volumes. The Warehouse was down 2c to $1.80 after reporting a 6.7% decline in group sales to $713.3m for the first quarter compared with the previous corresponding period. Gross profit was 1.6% lower at $243.4m.

Fellow retailers Briscoe Group was down 6c to $4.47; KMD Brands declined 2c or 2.35% to 83c; and Michael Hill also decreased 2c or 2.27% to 86c.

Scott Technology fell 17c or 4.64% to $3.49; SkyCity shed 3c to $1.82; and Blackpearl Group was down 4c or 6.67% to 56c. Black Pearl raised $3.8m from a placement and share purchase plan and said annual recurring revenue went above $5m for the first time in October.

Tower, down 1c to 62, told the market that remediation costs for 65,000 customers not receiving correct discounts on their insurance policies would reach $11.2m, with $6.2m already paid out. Tower’s full-year net profit guidance of $7m-$10m is unchanged.

Tags: Market Close