NZ sharemarket not inspired by Briscoe's strong result

Retailer Briscoe Group delivered the goods again and the latest United States data rekindled investor sentiment, but the New Zealand sharemarket remained uninspired.

Wednesday, March 13th 2024, 6:36PM

by BusinessDesk

The S&P/NZX 50 Index fell to a morning low of 11,770.84 and closed at 11,809.02, down 20.15 points or 0.17%. The index has now fallen nearly 1% so far this week.

There were 69 gainers and decliners over the whole market on volumes of 27.06 million share transactions worth $106.49m.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said inflation in the US was still elevated and sticky but was coming down, paving the way for two or three interest rate cuts this year.

Technology stocks bounced back.

“Overseas markets are rising but ours is still languishing in the face of increased wholesale rates. We have interest rate-sensitive stocks, the retirement village sector is under pressure and we lack exposure to the high-growth technology stocks.

We need rates to fall for our market to turn around,” Sullivan said. Wall Street had another strong day even though the February consumer price index (CPI) was a little hotter than expected.

The US CPI increased an expected 0.4% last year and 3.2% annually, ahead of the economists’ forecast of 3.1%. Core inflation, which strips out food and energy, climbed 0.4% in February, compared with a forecast 0.3%.

One commentator said the latest inflation numbers highlight the challenge faced by the Federal Reserve in the last mile of its fight against rising prices.

The markets there expect the Fed, which meets next week, to begin cutting rates in June or July.

The Dow Jones Industrial Average was up 0.61% to 39.005.49 points; the S&P 500 hit a new high after increasing 1.12% to 5175.27; and the Nasdaq Composite rose 1.54% to 16,265.64. Technology stocks headed north again: Nvidia increasing 7.16% to a new high of US$919.13; Meta up 3.34% to US$499.75; Microsoft gaining 2.66% to US$415.28; and Oracle rising 11.75% to US$127.54 after beating Wall Street earnings estimates.

On the NZ market

At home, food price inflation for the year to February was 2.1%, the lowest since the May 2021 year, with fruit and vegetable prices falling 9.3%. The cost of restaurant meals and takeaways increased 6.7%.

Briscoe Group increased 9c or 1.98% to $4.64 after reporting record sales for the year ending January 28. Revenue was up 0.8% to $791.95m while net profit was down 4.8% to $84.22m.

Briscoe is paying a final dividend of 16.5c a share on March 27. Briscoe told the market "we are delighted to have produced another year of record sales against a macro retail environment which has seen many retailers struggling to hold their ground”.

Homeware sales increased 0.54% and sporting goods 1.17%, and online now represents 18.72% of revenue. Briscoe has cash of $175.4m and no term debt. The retailer is planning a $100m state-of-the-art warehousing and distribution centre at Drury.

Sullivan said it was a solid result in a weaker economy and Briscoe provided a realistic outlook but no specific guidance.

Other retailers were boosted: Hallenstein Glasson gaining 11c or 1.85% to $6.05; The Warehouse adding 3c or 2.31% to $1.33; and KMD Brands up 1c or 1.96% to 52c.

Meridian Energy declined 7c to $5.68; Serko fell 14c or 3.5% to $3.86; Auckland International Airport was down 10c to $8.16; Delegat Group decreased 19c or 3.08% to $5.98; and Napier Port shed 8c or 3.28% to $2.36.

Oceania Healthcare declined 2c or 3.23% to 60c; Tourism Holdings was down 11c or 3.23% to $3.30; Heartland Group shed 4c or 3.03% to $1.28; Skellerup decreased 8c or 1.91% to $4.10; and Accordant Group fell 4c or 4.76% to 80c.

Fisher and Paykel Healthcare was up 16c to $24.56; Vulcan Steel rose 24c or 2.96% to $8.35; Channel Infrastructure, which went ex-dividend, gained 3.8c or 2.73% to $1.43; NZME increased 2c or 2.25% to 91c; and Marsden Maritime Holdings gained 8c or 1.92% to $4.25.

Synlait Milk, up 4c or 5.63% to 75c, announced a seven-year partnership with Nestlé and farmer suppliers to fund on-farm emissions reduction solutions, including effluent management systems, feed options, advanced soil testing, alternative fertilisers and tree planting. The investment will be shared three ways.

Tags: Market Close