NZ sharemarket continues sliding, down 0.5%

The New Zealand sharemarket slipped more than 0.5%, while telco Spark has now netted $1.2 billion from exiting the mobile towers business.

Thursday, December 12th 2024, 6:24PM

by BusinessDesk

The S&P/NZX 50 Index slumped in the afternoon and closed at 12,692.72, down 68.47 points or 0.54% after reaching a morning high of 12, 779.54.

Trading was lighter, with 35.88 million shares worth $136.21m changing hands.

'Quite tight'

Greg Smith, head of retail with Devon Funds Management, said the market was soggy like the weather and “as we head into the quiet holiday period, volumes will continue to decline".

"It will be interesting to see if the seasonal buying transpires.”

In the United States, the technology-driven Nasdaq Composite breezed through the 20,000 mark for the first time after rising 1.77% to 20,034.9 points and is now up 33.5% for the year to date.

The S&P 500 gained 0.82% to 6,084.19 points and has risen 27.6% this year, while the Dow Jones Industrial was down 0.22% to 44,148.56.

US inflation increased for the year ending November to 2.7%, up from 2.6% (NZ’s is 2.2%), after the monthly consumer price index climbed to 0.3%, up from 0.2% in October.

Despite this, the market is still expecting a 25-basis points reduction in interest rates from the Federal Reserve next week.

Across the Tasman, the S&P/ASX 200 Index was down 0.23% to 8,334.6 points at 6pm NZ time after the unemployment rate unexpectedly fell to 3.9% in November – the lowest level in eight months.

Analysts forecasted a rise to 4.2% from 4.1% in October. The number of people in employment increased by 35,600, while the number of unemployed fell by 27,000.

Smith said there was a good chance of an interest rate cut by the Australian Reserve Bank in February, but now that was a 50/50 call because “the job market is surprisingly quite tight.”

Local stocks

At home, Spark increased 6c or 2.14% to $2.86 after selling the remaining 17% stake in the mobile towers business Connexa to Quebec-based global investment group CDPQ for $314m. The sale should add $70m to Spark’s operating earnings (ebitdai).

Spark sold 70% of the then TowerCo to the Ontario Teachers’ Pension Plan Board in 2022 for net proceeds of $900m and completed a $350m on-market buy-back of shares.

In the latest deal, Ontario Teachers will sell 33% of Connexa to CDPQ and Ontario, and CDPQ will each hold a co-controlling 50% interest. Spark will remain a key customer of Connexa and determine how its network is developed, while Connexa will design and deploy the build programmes.

The local market was dragged down by Fisher and Paykel Healthcare, declining 80c or 2.14% to $36.60, and leading energy stocks Meridian decreasing 9c to $5.58 and Mercury falling 19c or 3.03% to $6.09.

In a surprise to the market, Meridian announced that Neil Barclay, chief executive for seven years, is leaving the role at the end of June. He will be replaced by the present chief financial officer Mike Roan who first joined Meridian in 2006 in the strategy team. Last week, Roan was named the CFO of the year at the Deloitte Top 200 Awards.

Elsewhere in the energy sector, Manawa increased 15c or 2.73% to $5.64; Contact was up 16c or 1.85% to $8.81; and Vector was down 7c or 1.8% to $3.82.

Global transport and logistics company Mainfreight, down 50c to $71.49, said in its latest newsletter to staff that while economic conditions across its network have been challenging, there has been a continuation of revenue and volume growth and new customers – translating this growth to more profit has been difficult.

Skellerup decreased 10c or 1.96% to $5; Seeka declined 8c or 2.6% to $3; PGG Wrightson shed 4c or 2.4% to $1.63; and T&G Global was down 3c or 1.91% to $1.54.

Turners Automotive increased 29c or 5.44% to $5.62, 2 Cheap Cars added 4c or 5.41% to 78c; and Colonial Motor Co was up 5c to $6.55.

Colonial told the market that longstanding executive Stuart Gibbons, the general manager of strategic development, was stepping down at the end of the month after 42 years of service but will continue as a director.

Property companies Stride increased 4c or 3.17% to $1.30, and Investore was up 3c or 2.7% to $1.14.

Chorus gained 15c to $9.09; Briscoe Group was up 11c or 2.1% to $5.35; Sky TV increased 10c or 4.08% to $2.55; Oceania Healthcare improved 3c or 4.23% to 74c; and NZME added 2c or 1.9% to $1.07.

South Port NZ increased 21c or 3.9% to $5.60; Marsden Maritime Holdings gained 7c or 2.05% to $3.49; Tourism Holdings added 5c or 2.63% to $1.95; Third Age Health rose 7c or 3.1% to $2.33; and Scott Technology collected 5c or 2.27% to $2.25.

Tags: Market Close