NZ sharemarket claws back to end the week up 0.5%

The New Zealand sharemarket ended the week positively while leading gentailers Contact and Mercury kept moving in different directions on rumours of MSCI global index changes.

Friday, December 13th 2024, 6:20PM

by BusinessDesk

The S&P/NZX 50 Index had a strong afternoon finish and closed at 12,754.26, up 61.54 points or 0.48%, after reaching a morning low of 12,671.63.

The index was down 0.4% for the week and has risen 8.5% for the year to date.

There were 35.48 million share transactions worth $159.83m.

'A long way to go'

Shane Solly, portfolio manager with Harbour Asset Management, said one broker predicted that Contact would replace Mercury in the MSCI World Index based on shares liquidity and market capitalisation.

“Some investors are positioning themselves before that day, but there’s still a long way to go. Any change won’t be implemented till late February, with pricing beginning on January 20,” he said.

Contact, market capitalisation $7.18 billion, was up 19c or 2.16% to $9 and Mercury, market cap $8b, was down 14c or 2.51% to $5.72.

Elsewhere in the energy sector, Meridian gained 14c or 2.51% to $5.72, and Vector was up 8c or 2.09% to $3.90.

On the economic front, ANZ Research said next week’s third quarter balance of payments and gross domestic product (GDP) data is expected to show a 0.4% contraction in the economy, weaker than the previous forecast of 0.2%.

The bank said the annual current account deficit is expected to narrow 0.2 points to 6.5% of GDP, still far too wide to be called sustainable. The latest data is unlikely to change the Reserve Bank of NZ (RBNZ) near-term policy path of a 0.5% cut in the official cash rate (OCR) in February.

In the United States, the Producer Price Index rose 0.4% in November, double what was expected. Excluding food and energy, core PPI increased 0.2%, meeting forecasts.

Solly said the European Central Bank cut its official rate by 25 basis points and said there will be further reductions at the next two meetings.

“Central banks are in an interest rate-cutting cycle, but there’s a kink with US inflation still holding up. People are starting to think there will be a slower to lower Federal Reserve cutting cycle,” he said.

Local stocks

At home, Fisher and Paykel Healthcare was up 20c to $36.80; Ebos Group gained 29c to $37.04; Summerset increased 30c or 2.36% to $13, and SkyCity added 3c or 2.13% to $1.44.

Seeka increased 14c or 4.67% to $3.14 after upgrading its full-year gross profit guidance to $21m-$25m, from $21m-$25m, because of better-than-expected earnings in all segments.

This is Seeka’s third upgrade this financial year and compares with a loss of $21m in the previous year.

Other gainers were Santana Minerals, collecting 2.5c or 5.05% to 52c; Cooks Coffee, rising 2.5c or 9.09% to 30c; and Air New Zealand, up 1c or 1.8% to 56.5c.

Mainfreight was down 46c to $71.03; Vital Healthcare Property Trust declined 4.5c or 2.45% to $1.795; Vulcan Steel shed 15c or 1.91% to $7.70; 2 Cheap Cars decreased 3c or 3.85% to 75c; and T&G Global was down 4c or 2.6% to $1.50.

In the retail sector, Hallenstein Glasson was up 12c to $7.76, and Briscoe Group was down 8c to $5.27. Restaurant Brands was up 10c or 2.51% to $4.09.

Chorus was down 7c to $9.02 after receiving the fibre price-quality path from the Commerce Commission for the second regulatory period from 2025-28. The commission’s final decision allows annual revenues of $957m-$1.08 billion.

Synlait Milk, up 0.005c to 42.5c, has increased its 2024/25 forecast base milk price to $10 per kg/MS, up front $9.50, because of ongoing strengthening in global commodities prices.

Rakon, down 3c or 4.84% to 59c, told the market that its chief technology officer Brent Robinson has retired after 45 years’ service with the company but will remain a director. Robinson, who won the NZ Hi-Tech Trust Flying Award in 2011, was chief executive for nearly 36 years.

Channel Infrastructure, down 3c to $1.82, has completed the bookbuild of 3.8m shares at a premium of $1.80 a share and has raised a total of $50m to help fund three new projects at its Marsden Point terminal.

Ventia Services, down 21c or 4.28% to $4.70, is involved in an Australian Competition and Consumer Commission civil proceeding alleging contraventions of competition law provisions.

Tags: Market Close