Vista leads market higher as broker support swells

Vista Group International led the local stock market higher as Japanese policymakers sought to quell market instability and fears about a potential US recession subsided.

Wednesday, August 7th 2024, 6:13PM

by BusinessDesk

The S&P/NZX 50 Index rose 80.41 points, or 0.7%, to 12,326.17. Across the main board, 69 stocks gained, 70 fell and 40 were unchanged.

Turnover was $177.8 million.

Vista

Cinema software analytics firm Vista led the benchmark index higher, rising 5.4% to $2.53 on a heavier volume than usual with 313,000 shares changing hands.

The company reported a narrower first-half loss and was optimistic about second-half sales, having weathered a tough period. Macquarie analysts raised their price target on the stock to $2.20 from $2.10 while maintaining their neutral rating.

“There’s been quite a few broker upgrades for Vista and they’re travelling pretty good,” Peter McIntyre, an investment adviser at Craigs Investment Partners, said.

The broader market was largely driven by blue chips stocks, which were bouncing back from the sharp Monday selloff, he said.

Kiwi Property Group rose 4.1% to 88 cents, Fisher & Paykel Healthcare advanced 2.8% to $32.96, and Ebos Group gained 1.5% to $36.26.

Local employment data was slightly better than expected, with the unemployment rate rising to 4.6%, prompting some traders to pare back their bets that the Reserve Bank will cut the official cash rate when it reviews policy next week.

McIntyre said the Reserve Bank will probably start cutting interest rates this year.

“It’s just how aggressive they’re going to cut,” he said.

Local market

Fonterra Shareholders’ Fund units gained 0.7% to $4.11. Dairy prices rose at Wednesday’s Global Dairy Trade auction, and investors are also weighing up the dairy cooperative’s plans to sell its consumer businesses.

Rural services firm PGG Wrightson climbed 3.5% to $2.08.

Manawa Energy sought a trading halt of its shares, which were last at $4.28, saying it planned to release a statement downgrading earnings guidance due to a likely impairment from a customer not paying a bill and adverse wholesale energy markets.

Rising energy prices led to Oji Fibre Solutions announcing plans to close its Penrose mill, and Winstone Pulp International paused operations at its pulpmill and sawmill this week.

Energy companies were mixed, Genesis Energy, which operates the Huntly power station, gained 2.1% to $2.21, while Meridian Energy slipped 0.2% to $6.42 on a volume of 1.7m shares, Mercury NZ, which bought the retail book from Manawa-predecessor Trustpower, fell 2.2% to $6.795 on a volume of 1.2m, and Contact Energy declined 0.7% to $8.46.

Precinct Property NZ rose 1.7% to $1.22, with 9.8m shares changing hands. Ryman Healthcare was unchanged at $4.50 on a volume of 4m, while Spark NZ gained 1.4% to $4.40, with 3.5m shares traded.

Auckland International Airport increased 0.8% to $7.45 on a volume of 1.7m, and The a2 Milk Co fell 1.4% to $7.26 with 1.1m shares traded.

Arvida, which faces a takeover at $1.70 a share, slipped 0.6% to $1.62, with 3.9 million shares traded.

McIntyre said there’s still a lot of private equity money floating around. They’re typically attracted to companies such as Arvida, which have been trading at significant discounts to the net asset values in the low interest rate environment.

The weaker kiwi dollar makes that even more attractive, and there may well be more merger and acquisition activity, he said. The kiwi jumped about half a US cent after the employment data, trading at 60.15 US cents at 5.30pm.

Property developer CDL Investments fell 4% to 73 cents after reporting a decline in first-half profit due in part to the Government’s tax changes to depreciation on commercial property.

CDL shareholder and hotel operator Millennium & Copthorne Hotels NZ's stock remained unchanged at $1.60 after reporting a first-half loss due to the tax changes.

Both companies reported increased underlying earnings.

Tags: Market Close