Shares fall ahead of rate review
Reserve Bank poised to raise OCR today as investors watch for any changes to track over the next year or so
New Zealand shares fell ahead of the Reserve Bank’s interest rate review. Tower shed its interim dividend and Nuplex Industries extended its slide. Fisher & Paykel Healthcare gained after reiterating its guidance for earnings growth.
The NZX 50 Index fell 0.25 points, or 0.01 per cent, to 5179.15. Within the index, 21 stocks fell, 16 rose, and 13 were unchanged. Turnover was $109 million.
The Reserve Bank is poised to raise the official cash rate a quarter point to 3.25 per cent today and investors are watching for any changes it makes to the track of interest rates over the next year or so, with opinion divided on whether it will affirm the March projection of 200 basis points of hikes over two years.
“The expectation is for rates to continue to go up, which may have implications for consumer-facing companies,” said Shane Solly, a portfolio manager at Harbour Asset Management.
A suite of looming share sales is also keeping investors busy and prompting some to free up cash, as is happening worldwide, Solly said.
IkeGPS Group said yesterday it planned to raise up to $31 million in an initial public offering and list on the NZX’s main board.
Tower led the index lower, dropping 3.4 per cent, or 6c, to $1.72 as the general insurer shed rights to its 6.5c interim dividend, payable on June 30.
F&P Healthcare rose 1.7 per cent to $4.75 after releasing notes for a presentation that affirmed guidance for operating revenue for 2015 of about $640 million and net profit of about $97 million. Constant currency net profit is expected to jump 40 per cent in the 2015 year, it said.
“It’s good to have that reconfirmation,” Solly said. “Reconfirmation they are on track is positive.”
Chorus was unchanged at $1.715. The network infrastructure builder will exit the NZX 20 Index in the quarterly rebalancing at the end of the month to be replaced by Air New Zealand, which advanced 1.8 per cent to $2.33.
Outside the benchmark index, Genesis Energy rose 1.1 per cent to $1.795 and has gained 16 per cent since listing in mid-April. The Government-controlled energy company will enter the NZX 50 in the rebalance, replacing Michael Hill International. The Brisbane-based jeweller declined 0.8 per cent to $1.26.
GeoOp dropped 3.5 per cent to $1.40 after widening its annual loss to $4.6 million as it presses on with investing for growth. Restaurant Brands rose 0.9 per cent, or 0.3c, to $3.27 as it shed rights to its final 10c dividend, payable on June 27. Horizon Energy was unchanged at $3.01 as it shed rights to its final 9c dividend, payable on June 26.
Abano Healthcare was unchanged at $6.90 after the High Court in Auckland rejected the bid by Abano’s dissident shareholders Peter Hutson and James Reeves to delay tomorrow’s special meeting they called, in which they want to dump the medical investor’s chairman, Trevor Jane.