NZ shares fall as rate cut question weighs

New Zealand shares fell for a second day in quiet trading as the few investors returning this week pondered how quickly central banks will cut interest rates.

Monday, January 8th 2024, 6:52PM

by BusinessDesk

The S&P/NZX 50 Index declined 13.06 points, or 0.1%, to 11,735.42. Across the main board, 12.9 million shares were traded for a turnover of $40.3 million as 73 stocks fell and 63 rose.

No companies crossed the million-share volume today, with Spark NZ being the most heavily traded, with 840,000 shares changing hands as it rose 0.7% to $5.155.

“It’s a very quiet and very low volumes – we’re still a week away before the big players come back into the market,” said Grant Williamson, a director at Hamilton Hindin Greene.

United States employment figures were stronger than expected on Friday, and ANZ economists today said the momentum in jobs growth appeared too strong for the US Federal Reserve to start cutting its benchmark interest rate, despite the slowdown.

“Investors want to know if, when, and how quickly can interest rates start to come down,” Williamson said.

“That really is the million-dollar question, and not just for our market.”

Hot property?

Property companies, which are typically sensitive to movements in rates, were broadly weaker. Precinct Properties NZ fell 3.1% to $1.26, Kiwi Property Group declined 2.8% to 85.5 cents, Argosy Property decreased 0.9% to $1.135, and Investore Property slipped 0.8% to $1.19.

“A lot of them are trading below their asset value,” Williamson said.

Napier Port fell 4.3% to $2.43 in light trading, with just 7,620 shares changing hands. Other transport stocks were also under pressure after shipping liner Maersk said on Friday it’s avoiding the Red Sea for the foreseeable future due to the threat of attacks.

Port of Tauranga fell 2.7% to $5.37, Mainfreight declined 0.5% to $69.48, and South Port NZ was down 1.1% at $7.27.

Scales Corp fell 3.5% to $3.30, leading the benchmark index lower, also in light trading. The fruit company was one of several exporters to decline, with a2 Milk Co falling 2% to $4.32, Air NZ declining 1.5% to 54 cents, Fonterra Shareholders’ Fund units slipping 1.4% to $3.44, and Fisher & Paykel Healthcare edging down 0.2% to $23.84.

Retailers were mixed as investors awaited updates on the Christmas and New Year sale season. Hallenstein Glasson rose 4.4% to $5.49, Briscoe Group increased 2% to $4.65, Michael Hill International was unchanged at 96 cents, The Warehouse Group was unchanged at $1.57, and KMD Holdings fell 2.7% to 73 cents. Fast food operator Restaurant Brands rose 3.9% to $4.

Bye Geo

Employment software minnow Geo posted the sharpest fall on the main board, sliding 45% – or 0.9 of a cent – to 1.1 cents after unveiling plans to delist from the stock exchange more than a decade after listing on the NZX’s now-defunct alternative market.

NZX was unchanged at $1.07.

Seafood company Sanford fell 1% to $4.10 after rival Sealord – which will soon eclipse it in size once it completes the acquisition of Independent Fisheries – reported its first loss in 10 years. While IT costs and more expensive finance weighed on the bottom line, Sealord said its fishing business struggled in the year, whereas its aquaculture unit thrived.

Fishing farmer NZ King Salmon Investments increased 2% to 25.5 cents and was the second-most traded stock on a volume of almost 807,000 shares.

Energy companies were generally stronger today. Contact Energy rose 1.6% to $8.17, Meridian Energy was up 1.4% at $5.63, and Manawa Energy increased 0.2% to $4.27. Genesis Energy was unchanged at $2.49, and Mercury NZ fell 1% to $6.64.

Building materials companies were mixed. Fletcher Building fell 1.7% to $4.74, and Vulcan Steel declined 3.3% to $8.10, while Steel & Tube Holdings was unchanged at $1.07 and Metro Performance Glass rose 0.7% to 13.8 cents.

Tags: Market Close