NZ sharemarket down 0.8%, ASX almost double that

The New Zealand sharemarket remained stoic as its counterpart across the Tasman plunged more than 1.5% from record highs on increasing bond yields.

Tuesday, October 22nd 2024, 6:29PM

by BusinessDesk

The S&P/NZX 50 Index fell sharply at the opening, then traded steadily till a late dip and closed at 12,813.15, down 110.07 points or 0.85% after reaching an intraday low of 12,800.6.

Trading was heavy, with 57.63 million shares worth $262.49m changing hands.

The US deficit

Matt Goodson, managing director of Salt Funds Management, said the local market did quite well considering the fall in Australia.

“The biggest thing going on is the continued rise in long-term bond yields in the United States on concerns about the size of the US deficit and debt and absence of any political will to do anything about it.

“Thoughts of further Federal Reserve interest rate cuts have been tempered because the US economy is still strong with some inflationary pressure. And first, there’s a presidential election front and centre,” Goodson.

The US 10 Year Treasury Note yield increased 11 basis points to 4.2%, its highest level since late July and has crept up from a low of 3.63%. The Dow Jones Industrial Average was down 0.8% to 42,931.60 points.

The US government’s deficit is US$1.83 trillion (NZ$3t), an increase of US$138 billion from the previous year, and the national debt has reached US$35.77t.

Across the Tasman, the S&P/ASX 200 Index had fallen 1.59% to 8,212 points (at 6pm NZ time) in a broad sell-off.

Local stocks

At home, Fisher and Paykel Healthcare was down 44c to $37.20; Ebos Group declined 61c to $36.54; Auckland International Airport eased 15c or 1.99% to $7.40; Gentrack fell 36c or 3.29% to $10.59, and Port of Tauranga decreased 11c or 1.83% to $5.90.

Interest rate-sensitive stocks Precinct Properties eased 3c or 2.31% to $1.27, and Property for Industry fell 5.5c or 2.42% to $2.215. Meridian Energy declined 14c or 2.3% to $5.94, and Mercury was also down 14c or 2.02% to $6.80.

Freightways declined 22c or 2.21% to $9.75; a2 Milk shed 9c to $6.55; Oceania Healthcare decreased 3c or 3.7% to 78c; Eroad fell 4c or 4.21% to 91c; and Michael Hill was down 2c or 3.51% to 55c.

Spark eased 2c to $2.98. Investors will closely watch Spark’s annual meeting on Nov 1 for its latest trading update and dividend policy. The stock is expected to fall out of the MSCI Global index in the middle of next month.

Infratil was up 18c to $12.65 and looks likely to replace Spark in the MSCI index.

Other gainers were Mainfreight, increasing $1.02 to $72.99; Synlait Milk, up 1c or 2.5% to 41c; Solution Dynamics, rising 3c or 2.5c to $1.23; and Accordant Group, rising 4c or 8% to 54c.

Transport and logistics software firm TradeWindow increased 3c or 15% to 23c after reporting a 22% increase in half-year trading revenue to $3.7m and 14% gain in annual recurring revenue to $7.2m. The company has had unbroken quarter-on-quarter revenue growth since listing in November 2021.

Sky Network Television, up 3c to $2.79, has an exclusive agreement with Warner Bros Discovery to screen the Max channel in NZ from Oct 30. Sky TV said the agreement will generate “a free cash flow upside” in the first half of the 2025 financial year.

Ventia Services came off its high, falling 29c or 5.32% to $5.16; Heartland Group was down 3c or 2.8% to $1.04; NZX shed 3c or 2.08% to $1.41; Rakon declined 3c or 4.05% to 71c; and Vista Group eased 8c or 2.53% to $3.08.

Tower was down 2.5c or 1.79% to $1.375 after being added to the NZX 50 to replace Arvida. Trading in Arvida shares will be suspended on Oct 29 after the takeover by New York-based investment firm Stonepeak. Arvida neared the scheme of arrangement price of $1.70 after gaining 3c to $1.69.

Other decliners were The Warehouse, down 3c or 2.73% to $1.07; Delegat Group, down 14c or 2.57% to $5.30; Steel & Tube, shedding 2c or 2.08% to 94c; Pacific Edge, decreasing 0.008c or 5.32% to 14.1c; Being AI, easing 2c or 3.64% to 53c; and Smartpay, down 3c or 4.29% to 67c.

Rua Bioscience, down 0.001c or 2.08% to 4.7c, told the market that unaudited first quarter medicinal cannabis sales increased to $223,000, up from $86,000 in the same period last year, following product launches in Germany, Australia and NZ. Rua is planning a capital raise to cater for growth.

Rua said it has not received the deposit from Awa Ora Genesis Kaitiaki Harakeke Trust of Te Araroa for land ownership rights but expects full settlement on Oct 30.

Tags: Market Close