NZ shares perk up as coalition details announced

The New Zealand sharemarket closed the week with a small gain as the coalition government agreement, with its sack-full of legislative changes, quelled some uncertainty.

Friday, November 24th 2023, 6:46PM

by BusinessDesk

The S&P/NZX 50 Index moved into positive territory after the policy changes and ministerial appointments were announced.

The index finished at 11,211.22, up 23.69 points or 0.21%, after reaching an intraday low of 11,164.74.

The index ended the week slightly ahead at nearly 0.3% – with just one down day – and has now fallen 2.4% for the year. It has risen 4% in November. There were 68 gainers and 59 decliners over the whole market on volumes of 26.86 million share transactions worth $78.45m.

Shane Solly, portfolio manager with Harbour Asset Management, said the market “didn’t get upset (with the coalition agreement) and sell off the NZ dollar and bonds.

“At first glance, the policy changes seem quite balanced and consistent with previous expectation.

They look to be positive for companies listed on the sharemarket as the government is relaxing the employment conditions and providing a clear framework for infrastructure," Solly said. “The cancellation of the Lake Onslow hydro scheme will take pressure off the electricity generators as the project was seen as a risk for them. The coalition is more supportive of the retirement sector, and the reintroduction of interest deductibility will likely attract or retain investors in the housing market.

“One surprise was the $1.2 billion regional development fund, that’s quite chunky, and there’s a shot across the bow of the Australian banks with a select committee inquiry into competition and profitability.”

Solly said though the latest company results have been mixed, there is a whiff that earnings are starting to grow again after 12 to 24 months of downgrades.

“Some results have been better than expected as we see a gradual grind down of the economy, and next week is big reporting with Fisher and Paykel Healthcare, Ryman Healthcare and property companies Kiwi, Stride and Argosy.”

Mainfreight collected 77c to $66.90; Skellerup added 8c to $5.18; Serko rose 21c or 5.02% to $4.39; Hallenstein Glasson gained 14c or 2.37% to $6.05; and Fletcher Building was up 5c to $4.58.

Fletcher Building’s distribution chief executive, Bruce McEwen, has resigned and is leaving at the end of March. Solly said PlaceMakers is one of the better parts of the business, and there are some big work boots to fill.

Retirement stocks Oceania Healthcare increased 3c or 4.41% to 71c; Arvida Group was up 2c or 1.9% to $1.07; Ryman Healthcare gained 5c to $5.40; and Summerset Group was down 10c to $9.55.

Ebos Group continued to fall after pulling out of acquisition talks, down 41c to $35. Gentrack decreased 16c or 3.04% to $5.10, and Rakon shed 4c or 6.25% to 60c.

In the property sector, Argosy was up 2c or 1.79% to $1.135; Vital Healthcare Trust increased 6.5c or 3.16% to $2.12; and Investore was down 2c or 1.87% to $1.05.

Precinct Properties, down 1c to $1.16, announced a conditional agreement with Auckland council’s Eke Panuku Development to redevelop the Downtown Car Park site in partnership with Ngati Whatua.

Precinct is buying the 6442sq m site for $122m and cannot begin demolition before the end of April 2025. Until then, Auckland Transport will continue to operate the car park. Precinct plans a centralised podium beneath two high-rise towers, and retail, hospitality and public spaces.

Solly said this is a big deal for Precinct, and it helps them reposition the business as a real estate fund manager. It will also be a meaningful driver of earnings, though that will take some time.

Burger Fuel, unchanged at 26c, reported a 15.4% increase in half-year revenue to $13.07m and net profit of $581,000, up 5.2%. The fast-food operator has no debt and cash reserves of $8.9m.

Tags: Market Close