NZ sharemarket hits 17-month high

The New Zealand sharemarket – which has long struggled with a weakening economy and tight monetary policy – hit a 17-month high as some of the leading stocks came to the party late in the day.

Tuesday, July 16th 2024, 6:32PM

The S&P/NZX 50 Index gained strong momentum mid-afternoon and closed at 12,184.49, up 61.34 points or 0.51% after reaching an intraday low of 12,085.65.

The index was last at this level on Feb 10 last year, at 12,178.7 points, and has now risen 3.5% for the year.

There were 84 gainers and 56 decliners on the main board with 25.7 million shares worth $100.23m changing hands.

Matt Goodson, managing director of Salt Funds Management, said the last few years has been a grind for the market.

“Pre-covid, we outperformed the Australian market, but we didn’t participate in the data centre and artificial intelligence boom seen offshore. Our monetary policy has been tighter than most economies, and hopefully, we are breaking out with an easing cycle,” he said.

“The market advance lately has been broader and not relying on just half a dozen stocks, and that’s encouraging. But over time, a gross index with dividends should increase.”

On Wall Street, the Dow Jones Industrial Average reached a new high after gaining 0.53% to 40,211.72 points, and all the talk post-the unsuccessful assassination was about ‘the Trump trade’ and how it would benefit the equity and cryptocurrency markets.

Another Trump presidency would signal tax cuts, higher tariffs and looser regulations.

US Federal Reserve chair Jerome Powell buoyed investor sentiment by saying the Fed would not wait for inflation to hit 2% before cutting interest rates.

Local market

Pushing the market higher were Fisher and Paykel Healthcare, up 30c to $31.34; Mainfreight rebounding $1.56 or 2.1% to $75.76; Gentrack adding 22c or 2.1% to $10.72; Fletcher Building gaining 8c or 2.56% to $3.20; and Port of Tauranga up 11c or 2% to $5.60.

Energy stocks Mercury increased 17c or 2.51% to $6.95; Meridian gained 24c or 3.68% to $6.76; and Contact collected 16c or 1.89% to $8.63.

At home, several small caps had healthy moves. Bremworth rose 3.5c or 8.33% to 45.5c; Steel & Tube was up 4c or 4.4% to 95c; Third Age Health improved 5c or 3.45% to $1.50; Solution Dynamics also increased 5c or 4.35% to $1.20; ikeGPS added 2c or 4.44% to 47c; and 2 Cheap Cars was up 2c or 2.44% to 84c.

Colonial Motor collected 20c or 2.94% to $7; Comvita rose 10c or 8.7% to $1.25; Napier Port gained 6c or 2.62% to $2.35; Vista Group added 5c or 2.17% to $2.35; Tower was up 2c or 2.16% to 945c; Restaurant Brands improved 6c or 2.16% to $2.84; and Carbon Fund rose 10c or 6.67% top $1.60 on increased carbon prices.

Scales Corp, up 1c to $3.35, has sold the Te Papa and Blyth Mr Apple orchards, totalling 186ha, to a Craigmore Sustainables fund for $34m. The fruit from the orchards will be packed, stored and marketed by Mr Apple.

Scales recently bought 240ha of Bostock Group planted orchard area, and the net impact of the two deals will be a medium-term increase in operating earnings (ebitda) of $6-$8m.

Goodson said it was a sensible combination of deals – Scales are savvy operators.

EBOS Group was down 14c to $34.26 after telling the market it was not participating in any sale of the Prime100 pet food business (owned by Quadrant Private Equity), following speculation from the Australian Financial Review.

Freightways fell 22c or 2.6% to $8.23; Summerset Group was down 20c or 1.9% to $10.30; NZME declined 2c or 1.9% to $1.03; and Rakon shed 3c or 4% to 72c.

Heartland Group decreased 2c or 2.02% to 97c; Scott Technology was down 7c or 2.85% to $2.39; and Green Cross Health easing 2c or 2.41% to 81c.

Property stocks Argosy was down 2c or 1.88% to $1.045, and Precinct declined 2.5c or 2.08% to $1.175.

Software firm Blackpearl Group gained 3c or 5.26% to 60c and reported that subscription revenue reached $1.5m at the end of June, representing a 143% year-on-year rise and a 15% increase on the previous quarter.

Annual recurring revenue was $8.6m, a 162% year-on-year increase and a 16% gain on the previous quarter.

SkyCity Entertainment, down 12c to $1.51, told the market that Peter Fredricson, formerly with AMP, has been appointed chief financial officer from early next month.

The casino and hotel operator is presenting a new management team, with Jason Walbridge having started as the new chief executive and Julian Cook stepping down from chair and becoming an independent board director.

The interim CEO, Callum Mallett, is back as chief operating officer in NZ.

Tags: Market Close