NZ sharemarket up nearly 1% after long weekend as Serko surges

The New Zealand sharemarket lacked direction ahead of some defining events, but Serko went only one way, surging more than 15% on increased revenue and growth.

Tuesday, October 29th 2024, 6:13PM

by BusinessDesk

The S&P/NZX 50 Index was up and down all day and closed at 12,783.36, up 11.75 points or 0.09%, after reaching an intraday high of 12,826.48 and low of 12,720.21.

Trading was heavy, with 83.55m shares worth $223.17m changing hands.

Last piece of the puzzle

Mark Lister, investment director with Craigs Investment Partners, said he wasn’t surprised the market was feeling unsure about what direction to take.

“We are into the busiest and wild 10 or 12 days of the entire year for the markets. There are so many big and important events that will set the tone for the remainder of the year.”

He said over the next three days five of the Magnificent Seven tech stocks – Google, Microsoft, Meta (Facebook), Apple and Amazon – will be reporting their latest earnings for the three months ending September.

“They are such a dominant part of the US market, which affects New Zealand, and after an absolutely spectacular run for the last 18 months to two years, their rally has recently stalled.”

Lister said the US jobs report at the end of the week will be a key economic release for the Federal Reserve when they meet on Nov 6 and 7 to consider the next interest rate cut.

“And before that, we have the US presidential election that could go either way. The market thinks Trump will win based on the latest currency and interest rate moves, and there will be less of a knee-jerk reaction than back in 2016 if he does get in.”

He said the quarterly NZ labour force report next week will be the last piece of the puzzle before the Reserve Bank meets on Nov 26 to make its call on another cut in the official cash rate.

Unemployment is expected to rise from 4.6% to 5%.

Online travel booking company Serko was up 44c or 15.33% to $3.31 after confirming an increase in revenue guidance and expansion in North America.

Serko is expecting revenue of $85m-$92m for the 2025 financial year, up from $71.18m in the previous year.

Serko’s first-half revenue was up 18% to $42.7m, total spending increased 5% to $44.34m, and it recorded a net loss of $5.1m. The number of completed room nights on Booking.com for business was 1.6m, which is up 17% from the previous corresponding period.

Serko has partnered with Texas-based Sabre and will buy its business travel management solution GetThere for US$12m (NZ$20m). The companies will share revenue with Sabre's co-selling Serko solutions.

Serko has set a new target of $250m in revenue for the 2030 financial year.

Lister said NZ does not have a lot of high-growth technology stocks and they can do some interesting things if they do it right. The market seemed to like Serko’s announcement.

Other stocks

Fisher and Paykel Healthcare declined 78c, or 2.12%, to $36.06; Mercury Energy was down 21c, or 3.18%, to $6.40; and ANZ Bank decreased 70c, or 1.99%, to $34.50.

Tourism Holdings fell 13c or 6.05% to $2.02; Channel Infrastructure shed 8c or 4.28% to $1.79; Sky TV was down 8c or 2.85% to $2.73; and Kiwi Property eased 3c or 3.09% to 94c.

Infratil added 30c or 2.33% to $13.15; a2 Milk was up 12c or 1.89% to $6.48; Auckland International Airport gained 16c or 2.2% to $7.42; Skellerup improved 15c or 3.09% to $5; and Freightways collected 25c or 2.48% to $10.35.

Another tech stock, Eroad, increased 3c or 3.33% to 93c; Rakon gained 4c or 5.63% to 75c; Comvita rebounded 4c or 3.51% to $1.18; and Being AI rose 9c or 17.31% to 61c.

Third Age Health surged 31c or 16.85% to $2.15 after reporting a 28.2% increase in revenue to $9.4m and a 114.9% rise in net profit to $1.15m for the six months ending September. It is paying an interim dividend of 3.55c a share on Nov 15 and expects an even better second-half performance.

Third Age services 87 aged residential care facilities and 5,278 patients, up from 677 facilities and 4,360 patients at the end of March. In total, Third Age provides care to 25,810 patients, including community general practices, up from 24,969.

Scott Technology rose 16c or 8.65% to $2.01 after announcing six new contracts totalling $30m for its materials handling and logistics business in Canada, Belgium, France and the Netherlands.

Scott’s palletising systems will be used by Belgian frozen food producer EcoFrost and a leading North American food processor for its French and Canadian facilities. Scott also has its first pre-order for the new NexBot automated guided vehicle set to launch by February.

Tags: Market Close