NZ sharemarket starts week up 0.6%

The New Zealand sharemarket staged a strong turnaround with a rise of more than 0.5%, while the NZ dollar reached a 12-month low.

Monday, November 18th 2024, 6:20PM

by BusinessDesk

Again, the S&P/NZX 50 Index had strong momentum in the afternoon and closed at 12,764.65, up 79.77 points or 0.63% after reaching an intraday low of 12,623.39.

There were a healthy 38.2 million share transactions worth $164.67m.

'A positive note'

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said there were weak offshore leads over the weekend (NZ time) – with strong retail data dampening the quantity of interest rate cuts in the United States.

“The local market declined in kind but then rallied when the Australian and Asian markets opened on a positive note,” he said.

US retail sales increased 0.4% in October, slightly more than expected, with sales at auto dealerships and electronics and appliance stores increasing around 2% – signs that the economy was heading for a soft landing.

There were fears that the Federal Reserve might pause interest rate reductions next month, and last week, chair Jerome Powell said the Fed was in no hurry to lower rates.

The markets there are pricing in a 60% chance of a 25-basis point cut when the Fed meets on Dec 18.

The Nasdaq Composite fell 2.24% to 18,680.12 points; the S&P 500 declined 1.32% to 5,870.62; and the Dow Jones Industrial Average was down 0.7% to 43,444.99.

Sullivan said the local market has been pricing in a cut of 0.5% in the official cash rate (to 4.25%) for some time, but this has been offset by “quite a fall” in the NZ dollar.

Instead of weakening following the US presidential election, the American dollar strengthened, and the kiwi traded at US58.58c against the greenback.

Pre-election, the NZ dollar was at US63.5c – a fall of 5c – and it last reached the 58c level in November last year.

In an update, ASB Bank said the smattering of NZ data out over the past week helped fill out the picture that inflation (here) will remain constrained, though the watering effect of lower interest rates on the green shoots of economic recovery has yet to produce much yield.

Local stocks

Fisher and Paykel Healthcare was up 55c to $37.58; Chorus added 17c or 1.91% to $9.07; a2 Milk gained 13c or 2.43% to $5.47; Spark rose 9.5c or 3.11% to $3.145; Mercury Energy increased 13c or 1.95% to $6.78; and Gentrack climbed 36c or 3.54% to $10.54.

Auckland International Airport increased 12c to $7.40, with a block of two million shares changing hands at $7.38 a share.

Other gainers were Summerset, adding 12c to $12.85; NZX, rising 7c or 5% to $1.47; Scott Technology, increasing 7c or 3.66% to $1.98; Heartland Group, up 2c or 2.06% to 99c; NZ Rural Land, collecting 3c or 3.33% to 93c; and Asset Plus, improving 1.5c or 6.38% to 25c.

Infratil was down 30c or 2.37% to $12.35; Ebos Group eased 27c to $35.63; The Warehouse decreased 2c or 1.96% to $1; Green Cross Health fell 5c or 6.17% to 76c; and Pacific Edge declined 0.005c or 4% to 12c.

Santana Minerals was down 1c to 61c after releasing its pre-feasibility study for the Central Otago Bendigo-Ophir Gold Project.

The mine will produce 147,000 ounces of gold during each of the first three years of production and average 125,000 oz a year from an initial 9.2 years of reserves.

The project generates revenue of A$4.6 billion (NZ$5b) at the current spot price of gold (A$4000 an ounce) with operating earnings (ebitda) of A$3.05b and free cash flow of A$1.78b after tax and royalties, with A$296m going to the government. The Fisher Funds managed investment funds reported October returns. Kingfish, up 2c to $1.30, increased 2.8% compared with NZX 50 monthly return of 1.7%.

Barramundi, up 1c to 69c, saw a decline of 0.7% compared with the ASX 200 decrease of 0.9%. Marlin Global, unchanged at 94c, had a monthly fall of 1.2% compared with the increase of 1% for the S&P Large Mid Cap and Small Cap indices.

Being AI, unchanged at 49c, has been told that its submission to start a charter school in Takapuna was unsuccessful in the current round of applications.

Medical cannabis company Rua Bioscience, unchanged at 3.1c, has opened its 3 for 4 pro-rata renounceable rights offer to raise up to $3.1m. Rua told the market that sales continued to grow to $128,00 in October, up from $122,000 in September, and it is targeting revenue of more than $3m by the end of the 2025 financial year.

Blis Technologies, unchanged at 1.8c, has finalised a marketing and distribution agreement with Orange Daylily in China, including launching its probiotic products on Alibaba’s Tmall and Taobao, and Alipay platforms.

Tags: Market Close