Trade war truce breathes life into NZ sharemarket
Fisher and Paykel Healthcare and the New Zealand sharemarket staged a strong recovery on relief that the US tariffs on Mexico and Canada have been put on hold.
Tuesday, February 4th 2025, 7:01PM
by BusinessDesk
The S&P/NZX 50 Index traded steadily and closed at 12,905.04, up 94.72 points or 0.74%. Volumes picked up in the afternoon with 27.47 million share transactions worth $147.58m.
The NZX index shook off the 1.42% fall the day before after US President Donald Trump announced he was delaying the start of 25% tariffs on Mexico and Canada for a month following “friendly” talks with the leaders of both countries.
The United States and its neighbours struck last-minute deals to tighten border measures against the flow of migrants and the drug fentanyl.
Mark Lister, investment director with Craigs Investment Partners, said it's all about what is happening in the US at the moment and things could be different tomorrow.
“Trump’s softening in his tariff stance was good news but we are not out of the woods. There is optimism that the tariffs won’t be as bad as people thought.
“But investors can’t be naive on this. Trump is not bluffing. He campaigned on tariffs and he’s done it, and he will carry on to get the outcomes he wants. Investors have to prepare themselves for a bumpier road,” Lister said.
After sharp early falls, Wall Street also recovered on the tariff concession. The Dow Jones Industrial Average closed down 0.28% to 44,421.91 points, after falling 1.5% during the day; S&P 500 decreased 0.76% to 5994.57; and Nasdaq Composite declined 1.2% to 19,391.96.
On the NZ market
Back home, the local market was waiting for the latest unemployment numbers. Lister said unemployment is expected to push above 5%, from 4.8% with the 25-year average being 4.7%.
“This is not what we want to see but unemployment at 5.1% will seal the deal for a 50-basis-points cut in the official cash rate from the Reserve Bank later this month,” he said.
Fisher and Paykel Healthcare – at the forefront of tariff developments with manufacturing facilities in Mexico – was up 82c or 2.34% to $35.92 on trade worth $33.65m after falling 6.65% the day before.
Ebos Group rose $1.20 or 3.02% to a 30-month high of $41. Spark increased 7c or 2.46% to $2.92; Mercury Energy gained 10c to $6.3; a2 Milk was up 12c or 1.88% to $6.52; and ANZ Bank added 44c to $33.65.
Vista Group was up 7c or 2.17% to $3.30; My Food Bag added 0.008c or 4.06% to 20.5c; Green Cross Health improved 3c or 3.75% to 83c; and Steel & Tube gained 2c or 2.41% to 85c.
Wool carpet manufacturer Bremworth rose 7c or 14.58% to 55c after settling the $104.2m insurance claim for damage on its Napier facility from Cyclone Gabrielle. The company had a progress payment of $62m and will now receive a further $42.2m.
Bremworth has reinstated its yarn twisting line and dyehouse and related services at Napier.
Briscoe Group was up 9c or 1.93% to $4.75 after reporting fourth-quarter sales to Jan 26 of $245.3m, 0.96% ahead of the previous corresponding period. "Intense promotional activity" resulted in a 1.27% increase in homeware sales, and sporting goods were up 0.44%.
For the full year, group sales were $791.5m, 99.94% of the previous year’s record, and online sales increased from 18.72% to 19.69%. The homeware and sporting goods sales were both down 0.6% for the 12 months.
Briscoe indicated the full-year net profit will not meet the previous guidance but will be greater than $66m. Last year’s net profit was $84.2m.
Briscoe said the difficult retail environment will continue into this calendar year and it expects the first half to be especially challenging, given the subdued trading performance for the first two months.
Infratil was down 20.5c or 1.85% to $10.905; Serko shed 10c or 2.67% to $3.65; Scott Technology declined 6c or 2.74% to $2.13; Blackpearl Group decreased 3c or 3.09% to 94c; Winton Land eased 4c or 2.15% to $1.82; and CDL Investments was down 2.5c or 3.18% to 76c.
Vital Healthcare Property Trust, unchanged at $1.865, will not proceed with the dual-listed trust proposal which would have seen separate New Zealand and Australian trusts listed on the NZX and ASX respectively.
Feedback from stakeholders indicated that the transitional risk for the dual-listed trust cannot be adequately addressed in the current market. Vital Healthcare said it expects a property revaluation loss of $66m for the six months ending December.
Precinct Properties, unchanged at $1.22, told the market that Asian investment firm PAG is buying the remaining 20% it doesn’t own in the 40 and 44 Bowen St buildings in Wellington for $48m.
| « NZ sharemarket Trumped by tariffs, down 1.4% |
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