Cyclical stocks lift NZ sharemarket for second day
Cyclical stocks continued to recover on the back of an improving economy as the New Zealand sharemarket posted a further 0.7% gain.
Thursday, February 27th 2025, 6:57PM
by BusinessDesk
The S&P/NZX 50 Index traded strongly in the afternoon and closed at 12,540.87, up 88.41 points or 0.71% after reaching an intraday low of 12,417.17. The index has regained 1.89% in two trading days.
Volumes were again strong with 44.47 million share transactions worth $201.67m.
Shane Solly, portfolio manager with Harbour Asset Management, said: “We have had quite a sobering reporting season and we may have seen the bottom of the company earnings cycle. We are seeing a recovery in cyclical stocks which have been under pressure in the New Zealand economy and lagged the market.”
The ANZ business confidence index increased 4 points to plus 58 in February, while expected own activity eased 1 point to plus 45. Past own activity fell 3 points to minus 3, and past employment was flat at minus 7.
ANZ chief economist Sharon Zollner said activity indicators saw a mix of small rises and falls but overall continued to tell a tale of the economy recovering as interest rates fall.
“It seems clear from a wide range of indicators that the economy returned to positive growth in the last three months of last year. The improvement has been broad-based,” Zollner said.
In the United States, chipmaker Nvidia reported a strong quarterly result and provided a boost to the artificial intelligence (AI) and data centre sector.
Nvidia increased 3.67% to US$131.28 with sales rising 78% to US$39.33 billion, driven by AI demand, and net income increasing to $22.09b, up $10b from a year ago. Data centre business now comprises 91% of Nvidia’s total sales, and has risen tenfold in the past two years.
Local impact
One of the beneficiaries at home is CDC data centre majority shareholder Infratil which increased 38c or 3.62% to $10.88 on trade worth $27.56m.
Infratil chief executive Jason Boyes showed confidence in the future by spending $5m to buy 476,190 shares on-market at $10.50 a share. Boyes now holds nearly 1.9m shares in Infratil.
Mainfreight recovered a further $1.25 or 1.83% to $69.64; Gentrack gained 20c or 1.79% to $11.40; Millennium & Copthorne Hotels NZ was up 11c or 4.4% to $2.61; Vital Healthcare Trust collected 5.5c or 3.07% to $1.845; and a2 Milk increased 21c or 2.38% to $9.02.
Solly said looking back a2 Milk will have provided the stand-out result during the reporting season, and investment money continues to flow into the stock.
Freightways gained 12c to $11.12; Vector was up 12c or 3.05% to $4.05; Sky TV improved 5c or 2.04% to $2.50; Tourism Holdings increased 8c or 4.6% to $1.82; Delegat Group added 10c or 2.08% to $4.90; and Bremworth rose 4c or 7.27% to 59c.
SkyCity was up 3c or 2.29% to $12.34; Vista Group gained 7c or 2.13% to $3.35; and KMD Brands collected 1.5c or 3.85% to 40.5c.
Seeka rose 24c or 7.36% to $3.50 after reporting a 36.7% increase in revenue to $411.41m for the 12 months ending December and turning the previous year’s loss into a net profit of $8.75m.
The kiwifruit grower and packer said the $110m revenue increase was driven by higher volumes handled in New Zealand and Australia. New Zealand’s volume increased 44% to 43m class one trays, and Seeka’s Australian orchards increased production by 116%.
Summerset Group was down 15c to $11.70 on the eve of reporting its latest financial result; Meridian Energy decreased 6.5c to $5.72; PGG Wrightson declined 9c or 4.11% to $2.10; NZME shed 4c or 3.33% to $1.16; and AFT Pharmaceuticals was down 5c or 1.82% to $2.20.
Heartland Group, which is restructuring its business, was down 2c or 2.22% to 88c after reporting an 8.4% in revenue to $155.13m and a 90.4% fall in net profit to $3.6m for the six months ending December. It is paying an interim dividend 2c a share on March 21.
The Heartland Bank was weighed down by $50m impairment expenses, and net interest margin decreased 26 basis points to 3.1% but is expected to increase to more than 4%. Australian reverse mortgages achieved record new business of $193m, up 4.1%.
Restaurant Brands fell 23c or 6.01% to $3.60 despite a solid full-year result. Revenue was up 5.7% to $1.474b and net profit increased 63.1% to $26.53m. There were record store sales of $1.393b.
Channel Infrastructure was down 2c to $1.94 after reporting a 7% increase in revenue to $139.8m and a 6% decline in net profit to $25.95m for the 12 months ending December. It is paying a final dividend of 6.6c a share on March 27.
| « NZ sharemarket changes direction, up 1.1% on more positive results |
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