Serko leads the NZ sharemarket up

Technology company Serko surged nearly 20% on a strong business update as the New Zealand sharemarket posted a handy gain.

Tuesday, April 30th 2024, 6:36PM

by BusinessDesk

The S&P/NZX 50 Index had a rocky day before closing, with a late rise, at 11,957.5 – up 41.26 points or 0.35% after reaching an intraday low of 11,878.45.

There were 69 gainers and 62 decliners over the whole market on healthy volumes of 35.53 million share transactions worth $130.03m.

Mark Lister, investment director with Craigs Investment Partners, said it was difficult for the market with high inflation figures and the expectation of interest rate cuts further away.

“The short-term driver (for the market) is around the United States corporate earnings, and the Federal Reserve monetary policy decision on Thursday morning (NZ time) will be closely watched.”

He said Amazon and McDonald’s were reporting overnight and Apple followed later in the week.

Tesla rose 15.31% to US$194.05 (NZ$326) after clearing a key hurdle for full self-driving technology in China.

At home, the April ANZ Business Outlook survey showed business confidence fell 8 points to plus 15 and expected own activity was down 9 points to plus 14. Past own activity dropped 13 points to minus 20, with double-digit falls in every sector except construction.

ANZ said the survey showed a clear weakening in activity and profitability indicators but mixed developments regarding inflation pressures. Cost pressure was particularly persistent.

Meanwhile, 236 companies went into liquidation in March – the highest monthly total in six years. There were 489 liquidator appointments in the first three months this year, a 28% increase on the previous corresponding period last year (382).

Lister said the business survey was “pretty ugly, to be honest. The headline confidence measure is the lowest seen in six to nine months. The economy is weakening, and inflation is staying stubbornly high.

“It’s not good for household and workers, but it’s not terrible for the sharemarket because of its make-up where safe and steady stocks such as utilities continue to do well,” he said.

Serko rose 55c or 17.35% to $3.72 after renegotiating a five-year contract with Booking.com, registering more than 600,000 businesses and increasing booked room nights by 65% to 2.5m in the past financial year.

Total income for the 12 months ending March is likely to increase 48% to $71m – above the middle of the revised guidance of $67m-$74m. Serko said the total spend was at the lower end of the $86m-$90m guidance.

Lister said the revised revenue share arrangement (between Serko and Booking.com) looked good. Serko’s share price has been weak lately, which would be another reason for the big uplift.

Elsewhere on the market

Fisher and Paykel Healthcare was up 48c or 1.71% to $28.47; Spark added 6c to $4.77 on trade worth $15.64m; a2 Milk increased 20c or 3.08% to $6.69; Vulcan Steel rose 52c or 6.68% to $8.30; Scales Corp improved 15c or 4.62% to $3.40; and NZME gained 3c or 3.57% to 87c.

In the energy sector, Meridian gained 10c to $6; Mercury increased 11c or 1.75% to $6.38; and Genesis was up 4.5c or 1.97% to $2.325.

In the property sector, Argosy was up 2.5c or 2.27% to $1.125, and Kiwi was down 2.5c or 2.99% to 81c.

Amongst the retailers, The Warehouse rose 7c or 5.19% to $1.42, and Hallenstein Glasson gained 9c to $6.04.

Cancer diagnostic company Pacific Edge increased 1.1c or 13.41% to 9.3c after telling the market it is presenting the results of a ground-breaking study into the clinical utility of Cxbladder testing to the American Urological Association’s annual meeting later this week.

Heartland Group, unchanged at $1.06, has completed the A$115.7m (NZ$127m) purchase of Melbourne-based Challenger Bank, which will be renamed Heartland.

Infratil shed 19c to $10.92; Chorus eased 10c to $7.20; Ryman Healthcare fell 19c or 4.46% to $4.07; Fletcher Building declined 8c or 2.06% to $3.81; Mainfreight was down 50c to $68; and Napier Port eased 5c or 2.13% to $2.30.

AFT Pharmaceuticals fell 13c or 4.15% to $3; Rakon was down 5c or 4.76% to $1; CDL Investments eased 2.5c 3.14% to 77c; NZ King Salmon declined 2c or 7.55% to 24.5c; and Steel & Tube was down 3c or 2.86% to $1.02.

Wine exporters Delegat Group declined 20c or 2.94% to $6.60, and Foley shed 3c or 3.33% to 87c.

Tags: Market Close