NZ sharemarket reaches 14 week high

The New Zealand sharemarket reached its highest level in 14 weeks on a buoyant day, with the Dow Jones Industrial Average hitting an all-time peak and wholesale interest rates falling significantly.

Thursday, December 14th 2023, 6:16PM

by BusinessDesk

The S&P/NZX 50 Index rose strongly at lunchtime and had a late dip before closing at 11,552.88, up 77.11 points or 0.67% – matching the 11,554.48 set on Aug 31.

The index’s intraday high was 11,593.22 points. There were 79 gainers and 58 decliners over the whole market on increased volumes of 92.23 million shares, totalling $207.47m.

Channel Infrastructure, down 5c or 3.33% to $1.45, topped the turnover list with 54.48m shares worth $73.63m after Mobil Oil NZ offloaded 53.76m shares and reduced its shareholding to 14.19% from 17.2%.

The market shrugged off further evidence of the slowing economy when gross domestic product (GDP) fell 0.3% in the September quarter – economists expected slight growth of 0.2%. Per capita GDP was down 0.9%, and technically, the country is in a recession.

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said: “If you strip out the current high net migration, the economy contracted 3% over the last year.

“The downward revision of GDP reduces the chance of interest rate rises and increases the possibility of a cut by the end of next year."

Sullivan said wholesale interest rates were down by 5-6%. The NZ 10 Year Government Bond yield was trading at 4.578%, down 22.4 basis points.

In the United States, the markets are looking forward to three cuts next year after the Federal Reserve held its official rate steady at 5.25-5.5% and softened its monetary policy approach.

The Fed also signalled further cuts in 2025, with the rate reaching 3.5-3.75%, and it is forecasting inflation of 2.4% next year. The Dow Jones Industrial Average surged past 37,000 points for the first time, rising 512 points or 1.4% to 37,090.24.

The S&P 500 increased 1.37% to 4707.09 points, and the Nasdaq Composite was up 1.38% to 14,733.96 – but they are not quite at their peaks.

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Fisher and Paykel Healthcare was up 90c or 3.77% to $24.75; Mercury Energy rose 24c or 3.9% to $6.39; Summerset Group gained 21c or 2.23% to $9.62; Mainfreight collected 97c to $68.30; and Briscoe Group added 12c or 2.92% to $4.58.

There was plenty of corporate activity at home. Chorus was up 18.5c or 2.41% to $7.855 after receiving a favourable pricing review from the Commerce Commission.

Ebos Group was up 70c or 1.99% to $35.91. Ebos, this time, knocked back Australian media speculation, saying it was not in discussions with Paragon Care regarding a potential transaction. Paragon distributes medical equipment and consumables in the Australian and NZ healthcare markets, like Ebos.

Vista Group increased 5c or 3.7% to $1.40 after telling the market that Southeast Asian cinema chain Major Cineplex has signed up for its Vista Cloud technology for three years. Cineplex has 182 sites in Thailand and Laos.

Fletcher Building, up 12c or 2.62% to $4.70, announced Gareth O’Reilly as the chief executive of its Australian division. He starts his new role in February after being chief executive of Schneider Electric’s Pacific division.

Retirement village operator Arvida Group, up 7c or 7.61% to 99c, has rejected a takeover approach from an offshore infrastructure fund, saying the highly conditional offer of $1.70 a share undervalued Arvida’s intrinsic value and was not in the best interests of shareholders. Arvida’s net tangible assets are $2 a share. Heartland Group declined 3c or 1.88% to $1.57 after downgrading its full-year net profit to $93m-$97m from the previous $116m-$122m.

Heartland said it had a slower-than-expected start to the financial year because of a fall in new car sales and adverse Australian weather impacting livestock purchases.

However, reverse mortgages were growing.

Other decliners were Auckland International Airport, down 19c or 2.2% to $8.44; Genesis Energy, decreasing 6.5c or 2.57% to $2.465; Tourism Holdings, shedding 7c or 1.93% to $3.55; and Colonial Motor Co, falling 45c or 5.11% to $8.35.

Tags: Market Close