Shares shrug off concerns over tariffs
But investors need ‘solid’ results come reporting season
New Zealand shares rose in light trading, led higher by Comvita and Fletcher Building with PGG Wrightson jumping to a two-month high. The S&P/NZX50 Index gained 38.61 points, or 0.4 per cent, to 8,903.13. Within the index, 25 stocks rose, 13 were unchanged and 12 fell. Turnover was $65.5 million.
“With part of the Australian market off with a New South Wales holiday, it has seen a few participants out of the market . . . we had a strong lead off the US and European markets, the Asian markets seem to have shrugged off further concerns about tariff increases and Australia and New Zealand are up,” said Shane Solly, director, portfolio manager & research analyst at Harbour Asset Management.
“We are in a hiatus pre-results, there’s a lot of people thinking about where there’s risk in the results season and that is slowing people up from making their decisions,” Solly said. “The market has had a very strong run, so we need a good solid results season to keep it kicking along.”
Comvita was the best performer, up 1.8 per cent to $5.70, with Fletcher Building gaining 1.6 per cent to $7.04. A2 Milk Co rose 1.3 per cent to $10.56, which Solly said was due to a positive research note on the stock released yesterday.
Air New Zealand rose 1.2 per cent to $3.34 and Chorus gained 1.2 per cent to $4.33.
Tourism Holdings was the worst performer, down 1.3 per cent to $6.03. NZX dropped 0.9 per cent to $1.08.
The stock market operator said trading activity was busier in July from a year earlier, although with smaller values changing hands. Total
trades jumped 70 per cent to 258,063 in July, with average daily trades at 11,730, though total value traded was down 24 per cent to $2.62 billion, or a daily average of $119m. Outside the benchmark index,
PGG Wrightson rose 7.8 per cent to 69 cents, the highest it has closed since June 13th. The country’s largest rural services business said it had agreed to sell its seed and grain business to Danish cooperative DLF Seeds for $421m in cash and $18m of debt repayment, and signalled it may return up to $292m to its shareholders. The seed and grain unit is the largest of PGG Wrightson’s three core businesses, generating more than half of its operating earnings in the last financial year from across New Zealand, Australia and South America. The sale is above the $285m book value of the seeds business and follows several expressions of interest received from international parties.
“It’s a solid result on the sale of the seeds business, priced better than the market was expecting,” Solly said.