NZ sharemarket declines as investors run out of puff

The New Zealand sharemarket lost momentum in the afternoon and declined 0.6%, while across the Tasman the Reserve Bank has now kept interest rates on hold for a year.

Tuesday, December 10th 2024, 6:28PM

by BusinessDesk

The S&P/NZX 50 Index reached a morning high of 12,863.84 but closed at 12,723.37, down 78.43 points or 0.61%. There were 37.78 million share transactions worth $194.11 million.

Mark Lister, investment director with Craigs Investment Partners, said the Auckland International Airport share sale took some of the steam out of share prices.

“The market is in a holding pattern till a final burst of activity and releases next week to end the year.”

Lister said the September-quarter gross domestic product data will be closely watched and the Government is opening the books with the Half Year Economic and Fiscal Update. The ANZ business survey will also show where confidence is sitting.

Central bank decisions

The US Federal Reserve is meeting and is expected to reduce its official cash rate, he said. “We might then see a Santa rally to close out the year.”

The Reserve Bank of Australia kept its cash rate target at 4.35%, where it’s been since November last year, despite weakening economic growth over the last two quarters.

The bank said while headline inflation has declined substantially and will remain lower for a time, underlying inflation (at 3.5%) is more indicative of momentum and remains too high.

The November Statement on Monetary Policy forecasts suggest it will be some time yet before inflation is sustainably in the target range and approaching the midpoint (of 2.5%), said the Australian central bank.

At home, Fisher & Paykel Healthcare gained 14c to $37.14; a2 Milk rallied 12c or 1.93% to $6.35; Manawa Energy was up 13c or 2.41% to $5.53; T&G Global increased 4c or 2.56% to $1.60; and Skellerup added 6c to $5.06.

Vista Group collected 7c or 2.36% to $3.04; NZX was up 4c or 2.78% to $1.48; AFT Pharmaceuticals increased 10c or 3.64% to $2.85; Rakon rebounded 3c or 5% to 63c; and Vulcan Steel rose 28c or 3.64% to $7.98.

Hallenstein Glasson increased 46c or 6.54% to $7.49 after telling shareholders at the annual meeting that sales for the first 18 weeks of the 2025 financial year increased 10.1% compared with a weaker same period last year, but there were ongoing cost pressures on freight and chain supply.

“Encouragingly, despite a broader market trend of deeper and more prolonged discounting compared to last year, our gross margin percentage has remained stable,” Hallenstein said.

Taking a breather

After the flurry of buying and selling, Auckland International Airport declined 25c or 3% to $8.09, near the price where Auckland Council sold its 9.71% stake last week.

Infratil declined 37c or 2.98% to $12.05; Ebos Group was down 20c to $36.60; Mainfreight eased 64c to $71.56; and Spark fell 6.5c or 2.26 to $2.815.

Gentrack was down 15c to $13.24; Genesis Energy decreased 5c or 2.26% to $2.167; 2 Cheap Cars fell 3c or 3.8% to 76c; Carbon Fund declined 7c to 3.93% to $1.71; and Green Cross Health eased 2c or 2.47 to 79c.

Synlait Milk shed 2.5c or 6.33% to 42c; Foley Wines declined 3c or 4.48% to 64c; Being AI shed 3.5c or 9.59% to 33c; and Pacific Edge was down 0.005c or 4.17% to 11.5c.

In the property sector, Argosy was down 2c or 1.9% to $1.03 and Kiwi declined 2.5c or 2.73% to 89c. Kiwi has just completed its $125m, five-and-a-half-year green bond offer, with an interest rate of 5.35% a year. The bonds will be issued on Dec 19.

Among leading banks, ANZ was down 63c or 1.91% to $32.39, and Westpac shed 54c to $35.26.

Lister said the injection of capital ($500m) into Kiwibank was a good move and a sensible course of action would be to eventually list the bank. “I hope the Government has that in the back of its mind.”

Online travel provider Serko, down 1c to $3.80, held an investor day and said it was targeting North American expansion and $250m total income in the 2030 financial year.

Medicinal cannabis company Rua Bioscience gained 0.001c or 4.35% to 2.4c after earlier telling the market it raised $1.2m through a 3 for 4 renounceable rights offer at an issue price of 2.5c a share.

Fellow medicinal cannabis company Cannasouth, in administration, will be delisting from the NZX. When that happens, the administrators will establish a new board of directors and transfer control back to them.

The administrators said the new board will be exploring ways for shareholders to trade their shares via an unlisted platform. Cannasouth continues to process several varieties of cannabis flower and sales are in line with budget projections.

Tags: Market Close