Middle East conflict weighs on NZ sharemarket

The New Zealand sharemarket, trading flat, was overshadowed by uncertainty over the escalating conflict in the Middle East and the size of next week’s interest rate cut here.

Wednesday, October 2nd 2024, 6:39PM

by BusinessDesk

The S&P/NZX 50 Index followed Wall Street by falling in the morning but recovered in the afternoon to close at 12,451.69, down 15 points or 0.12%.

Greg Smith, head of retail with Devon Funds Management, said there was an air of uncertainty about where the events in the Middle East will lead to. And there was an air of expectation about the Reserve Bank’s official cash rate decision next week.

“It will be a tight call on whether the cut is 25 or 50 basis points. Business outlook has improved but it’s still tough out there. Hiring intention is weak, and inflation has come down quicker than the Reserve Bank thought,” Smith said.

“Dairy prices have gone up again and that’s good news for the farming sector, and there’s more optimism around China which is good for New Zealand. But we’ve yet to see what the Chinese economic stimulus packages will mean for trading partners.”

The Iran missile attack on Israel sent US major indices falling and gold rising.

The Dow Jones Industrial Average was down 0.41% to 42,1567.97 points; S&P 500 declined 0.93% to 5708.75; and Nasdaq Composite fell 1.53% to 17,910.36. The gold price climbed nearly 1% to US$2,655 an ounce, after reaching $2,671 during the day.

The Global Dairy Trade index was up 1.2% at the latest auction, after increasing 0.8% two weeks ago.

Whole milk powder was up 3% to an average of US$3,559 per metric tonne, while skim milk powder dipped 0.6% to an average of US$2,795MT. The largest increase was lactose, up 6.7% to an average of US$952MT, while buttermilk powder had a 5% lift to an average of US$3,171MT.

At home, Fisher and Paykel Healthcare was up 16c to $35.15; a2 Milk increased 24c or 3.57% to $6.97; Gentrack added 30c or 2.73% to $11.30; and Mercury Energy gained 3c to $6.25 on a broker upgrade.

Forsyth Barr has revised Mercury to outperform from neutral “as it is offering good value relative to Meridian in particular and we expect near-term ebitdaf earnings (for 2025 financial year) will be better than guidance following recent rain”.

Meridian Energy was down 21c or 3.49% to $5.80, and Genesis slipped 0.005c to $2.125.

Genesis is paying $64m for a 65% stake in ChargeNet, New Zealand's largest nationwide electric vehicle public charging network. ChargeNet has more than 400 public fast-charging points across the country and intends to double that number by 2030.

Smith said the market is questioning whether owning charging infrastructure is an optimal use of funds but Genesis is taking a long-term view on the electric vehicle phenomenon.

Hallenstein Glasson gained a further 25c or 3.73% to $6.96 and has increased 11.8% since announcing its solid annual result on Monday.

KMD Brands, down 3c or 5.66% to 50c, appointed Brent Scrimshaw as the new chief executive to replace Michael Daly who has resigned.

Scrimshaw, who had 19 years with Nike, has been a KMD director since 2017 and was global chief executive of listed Australian marketing services group Enero Group.

Serko gained 9c or 3.04% to $3.05; Tourism Holdings improved 5c or 2.75% to $1.87; Marsden Maritime Holdings added 6c to $$3.55; Cooks Coffee increased 2c or 8.7% to 25c; and Promisia Healthcare rose 1.5c or 6.25% to 25.5c. Smartpay declined 5c or 5% to 95c; Accordant Group fell 4c or 8% to 46c; ikeGPS decreased 3c or 5% to 57c; Sky TV shed 7c or 2.57% to $2.65; and The Warehouse was down 5c or 4.2% to $1.14.

Oceania Healthcare eased 2.5c or 3.33% to 72.5c; Synlait Milk was down 2.5c or 6.1% to 38.5c; and Solution Dynamics declined 7c or 5.22% to $1.27. PaySauce, up 0.005c or 2.33% to 22c, lifted second quarter recurring revenue 19% to $2.2m and annual revenue to date was $8.7m, up 17%.

Processing fee revenue for the quarter increased 21% to $1.6m and PaySauce has 7821 customers, up 9%.

Chatham Rock Phosphate increased 1.3c or 10.83% to 13.3c after telling the market it has been granted a mining lease for the Korella North mine in Queensland and small-scale production of the surface phosphate rock deposit will start almost immediately.

Move Logistics, up 0.005c or 2.44% to 21c, has finalised funding arrangements with ANZ NZ and Pacific Invoice Finance. Move has a loan facility with Pacific Invoice for up to $21m over a minimum 18-month term, with the option of increasing to $25m. The loan will be used to pay down the $20m ANZ facility by Oct 31.

Tags: Market Close