NZ sharemarket up 0.4% to end the week

The New Zealand sharemarket came to life with a late spurt – just as the Conservatives conceded a heavy defeat to the Labour Party in the British election.

Friday, July 5th 2024, 6:39PM

by BusinessDesk

The S&P/NZX 50 Index began climbing mid-afternoon and closed at 11,794.81, up 48.15 points or 0.41% after reaching an intraday low of 11,771.4.

The index increased 0.65% for the week and is flat for the year. There were 68 gainers and 62 decliners over the whole market on volumes of 29.98 million share transactions worth $91.77m.

Shane Solly, portfolio manager with Harbour Asset Management, said it was a slow day, volume and price-wise. The market is just bumping along the bottom on company earnings and valuations in a weak economy.

“We are in a geopolitically charged period with the (second round of the) French election this weekend and Labour winning in the UK, and investors are a little wary,” he said.

The British pound strengthened slightly, trading at 48p to the NZ dollar, down from 48.5p.

Solly said Asian-Pacific markets were weaker on the eve of a major Chinese policy meeting, and whether they will see some economic stimulus coming through,

The Hong Kong Hang Seng index had fallen 0.82% to 17,880.55 points and the Shanghai Composite down 0.54% to 2941.68 at 5.45pm NZ time.

Solly said the local market is waiting to see if the Reserve Bank stays the course with an official cash rate of 5.5% or opens up capacity on reduced inflation.

“The type of words they use will be important – the market would be surprised if the Reserve Bank talked about cutting the rate, but it wants to know whether it is even thinking about cutting. The retail banks have brought forward their forecasts of a rate reduction to November, from February.”

Local market

Port of Tauranga bounced another 20c or 3.96% to $5.25; Meridian Energy was up 11c or 1.71% to $6.55; Contact gained 13c to $9.15; Genesis added 4c or 1.83% to $2.23; and Skellerup increased 14c or 3.73% to $3.89.

In the property sector, Vital Healthcare Trust added 3c or 1.7% to $1.79; Investore was up 2c or 1.96% to $1.04; Kiwi Property Group gained 2c or 2.45% to 83.5; Precinct increased 3c or 2.67% to $1.155; and Stride was down 3c or 2.5% to $1.17.

“They are the type of defensive stocks that would benefit from an interest rate deduction,” Solly said.

Mainfreight collected 70c to $69; Ventia Services was up 7c to a new high of $4.37; Scott Technology increased 6c or 2.82% to $2.19; and Tourism Holdings gained 5c or 2.78% to $1.85.

In the retail sector, Hallenstein Glasson was up 12c or 2.22% to $5.53; Briscoe Group was down 7c or 1.73% to $3.98; and The Warehouse declined 2c or 2.06% to 95c.

Channel Infrastructure, up 1c to $1.47, has given US-based Seadra Energy further time to complete due diligence on buying decommissioned assets from the hydrocracking complex at the former Marsden Point oil refinery.

Seadra is paying an additional US$200,000 (NZ$326,660) for the extension to Sept 30. Channel will receive US$33.875m if Seadra decides to buy the assets.

Solly said the market was aware of the risk that the asset sale would be delayed.

“It is a complex process, and Seadra wants to take its time.”

Sky Network Television fell 10c or 3.86% to $2.49; Fonterra Shareholders’ Fund was down 7c or 1.71% to $4.03; Colonial Motor Co eased 16c or 2.32% to $6.75; and Comvita decreased 2c or 1.8% to $1.09.

Tower shed 1.5c to 91.5c; Eroad declined 5c or 3.85% to $1.25; Move Logistics was down 2c or 7.41% to 25c; and Radius Residential Care decreased 1.5c or 7.32% to 19c.

Geneva Finance shareholders voted for the company to delist from the NZX main board on July 17, but it wasn’t unanimous – 57.01% were in favour and 42.99% against.

However, the shareholders voted 89.18% in favour of transferring to the Unlisted Securities Exchange to streamline operations and reduce costs.

Tags: Market Close