Local stocks follow Wall Street bounce
Investors continue to push up Pushpay but trading quiet
New Zealand shares rose as investors continued to be cheered by positive markets offshore and expectations for progress in trade talks between the US and China. Pushpay continued to rise. The S&P/NZX 50 index increased 15.11 points, or 0.2 per cent, to 8821.15. Within the index, 26 stocks gained, 15 fell and nine were unchanged. Turnover was low at $76.6 million.
Sentiment got a lift after US stocks rose for a second day, with the Dow Jones Industrial Average lifting 0.4 per cent, the S&P 500 adding 0.7 per cent and the Nasdaq Composite gaining 1.3 per cent. US officials met their Chinese counterparts in Beijing on Monday for the first face-to-face talks since President Donald Trump and Chinese President Xi Jinping agreed in December to a 90-day truce. Markets are hopeful of a positive outcome. “The market is firmer. It’s another reasonable day after Wall Street had another reasonable night [on Monday],” said Grant Williamson at Hamilton Hindin Greene. He noted, however, that trading is tepid as many market participants are still on holiday.
“There is a lack of news. There is still not a lot of activity. Not all investors or institutions are really back in the market yet and it could remain this way for the rest of the week,” he said.
Pushpay added 0.6 per cent to $3.22 as investors continued to respond positively to news it achieved its target of breaking even on a monthly cash flow basis prior to the end of 2018. The firm is confident it will now have positive cash flows on an ongoing basis and reiterated its full-year guidance.
“Since making that announcement it’s done extremely well, gaining over 10 per cent this week so far,” said Williamson.
A2 Milk shed 0.6 per cent to $11.07 after gaining on some bargainhunting in the previous session. The company announced two new executive positions and “it’s probably
good news that they need to make some new appointments”, Williamson said.
Ryman Healthcare added 0.5 per cent to $10.89 while fellow retirement village operator Summerset added 1.9 per cent to $6.30.
Williamson said the stocks had shown quite a bit of weakness in recent months. “I think we are just seeing some bargain-hunting there.”
Among retailers, Kathmandu fell back out of favour, losing 3.3 per cent to $2.33.
“They did manage to gain [Monday] but they are basically giving that back again, so it’s still under pressure,” Williamson said. The outdoor equipment retailer lost ground last week after it said the Christmas shopping period fell short of expectations.
Other retailers are expected to start providing Christmas trading updates in the coming weeks. Briscoe added 0.3 per cent to $3.31, Hallenstein Glasson was down 0.3 per cent at $4.07 and the Warehouse Group was steady at $2.04. Spark NZ was the most heavily traded stock, easing 0.1 per cent to $4.13. About 2.2 million shares changed hands, down from its average volume of 3.1 million over the past three months.
Kiwi Property Group was unchanged at $1.35 and 1.9 million shares were traded, more than the 1.2 million average volume of the past 90 days.
Trade Me was the third most heavily traded, unchanged at $6.32. Volumes in that stock, however, were nearly double the average over the past three months with 1.5 million shares changing hands.
SLI Systems was unchanged at 64 cents. The company will delist from the NZX after Texan firm ESW successfully took over the local software developer with a 65c per share offer.
“I think the market might very well tread water a little bit until we get into February’s reporting season,” Williamson said.