Mar­ket com­men­taries

Otago Daily Times - - BUSINESS & MONEY -

AUCKLAND: New Zealand shares rose as be­nign com­ments from the US and lo­cal cen­tral banks sup­ported a more pos­i­tive out­look through to the end of the year.

The S&P/NZX 50 in­dex rose 35.39 points, or 0.4%, to 8931.40. Within the in­dex, 28 stocks rose, seven were un­changed and 15 fell. Turnover was $103 mil­lion.

Greg Smith, head of re­search at Fat Prophets, said events this week had been good for in­vestor sen­ti­ment glob­ally.

The Democrats win­ning con­trol of the US House of Rep­re­sen­ta­tives will pro­vide a check on the Trump ad­min­is­tra­tion that ‘‘has been known to un­nerve a few peo­ple from time to time’’.

A rate rise in the US in De­cem­ber is still likely, but any thaw­ing in trade re­la­tions be­tween China and the US at the G20 talks later this month could gen­er­ate a ‘‘risk­on rally into the end of the year’’, Mr Smith said.

The Re­serve Bank’s re­luc­tance to raise rates should also keep the lo­cal dol­lar low to the ben­e­fit of ex­porters and tourism op­er­a­tors, he said.

Spark New Zealand was the heav­i­est traded stock yesterday with more than 3.3 mil­lion shares chang­ing hands. It rose 0.6% to $4.065.

Smith said the firm’s an­nounce­ment this week that it would move into its own sports con­tent pro­duc­tion showed it was still ca­pa­ble of be­ing a dis­rup­tor on a num­ber of fronts.

Air New Zealand rose 0.5% to $3.065. The 2.04 mil­lion shares traded was roughly twice the daily av­er­age the past three months.

Fuel re­tailer Z En­ergy also con­tin­ued to slow claw­back from last week’s three­year low. Ju­lia Raue was the lat­est di­rec­tor to re­port share pur­chases this week. The stock was up 3% at $5.77 yesterday, with al­most 1.4 mil­lion shares traded.

Units in the Fon­terra Share­hold­ers Fund fell 0.4% to $4.84. First NZ Cap­i­tal said the com­pany needs to seize the op­por­tu­nity pro­vided by the change in se­nior lead­er­ship to fo­cus on value, and po­ten­tially quit poor per­form­ing brands.

Syn­lait Milk lifted 1.8% to $8.86 while a2 Milk fell 0.3% to $10.42. Mr Smith said the com­pa­nies were well­po­si­tioned in the growth mar­ket of China. While that was not with­out risk, he said there would be good sup­port for a2 any­where around $10.

Fast food op­er­a­tor Res­tau­rant Brands rose 0.8% to $8.65. The com­pany yesterday said talks on the sale of 75% of the busi­ness to Fi­nac­cess Cap­i­tal were go­ing well.

Ware­house Group rose 0.5% to $2.10. The firm said first­quar­ter sales rose 3.6% and mar­gins im­proved at its sta­tionery and gen­eral mer­chan­dise chains. It noted the mar­ket re­mains very com­pet­i­tive in gen­eral mer­chan­dise, ap­parel and in the ap­pli­ance and tech­nol­ogy sec­tor Noel Leem­ing op­er­ates in.

Trade Me Group rose 2% to $5.12. More than 1.4 mil­lion shares changed hands, three­times the daily av­er­age. The com­pany on Thurs­day said rev­enue in the past four months was up 9% on last year, and earn­ings be­fore in­ter­est and tax was 10% higher.

A late rally from bank­ing and health care stocks lim­ited losses to the lo­cal in­dices but fall­ing oil prices en­sured the en­ergy sec­tor would drag the Aus­tralian share mar­ket lower at the close.

The bench­mark S&P/ASX200 in­dex closed 6.4 points lower, or 0.11%, at 5921.8 yesterday, while the broader All Or­di­nar­ies fell 0.08%.

The Aus­tralian dol­lar weak­ened against its US coun­ter­part af­ter the Fed­eral Re­serve kept in­ter­est rates on hold, which sur­prised West­pac se­nior cur­rency strate­gist Sean Cal­low given the de­ci­sion came as lit­tle sur­prise.

The Aussie was buy­ing US72.44c at 1630 AEDT from 72.82 on Thurs­day.

‘‘It’s strange be­cause it [the com­men­tary from the Fed­eral Re­serve] was a short state­ment. It was ex­actly the de­ci­sion ev­ery­one ex­pected; it was not very en­light­en­ing and didn’t re­ally say any­thing we wouldn’t have ex­pected,’’ Mr Cal­low told AAP.

The drop­off ends a choppy week for the Aussie dol­lar which passed the US73c mark for the first time since Septem­ber but over­all it is in a pos­i­tive po­si­tion given it was on the cusp of fall­ing be­low US70c at the end of Oc­to­ber.

‘‘We do have a sub­70 as our base case over the next year but not short term,’’ Mr Cal­low said.

‘‘I think it can con­tinue to dodge 70 and with that sup­port from com­mod­ity prices plus a very bullish RBA, I’m in­clined to think there’s room to the top side.’’

Mean­while, oil prices fell nearly 2% overnight on the back of swelling global crude sup­ply, which looks to have halted re­cent gains for lo­cal en­ergy stocks.

The sec­tor had been head­ing for four straight ses­sions in the black but closed 1.3% lower, with Wood­side Petroleum, Cal­tex, Oil Search Ltd, San­tos and Ori­gin En­ergy all down be­tween 0.2 and 2.6%.

Min­ing stocks were also down de­spite iron ore and cop­per ris­ing overnight, with Rio Tinto 0.3% lower at $31.23 but BHP eked out a gain of 0.2% to $33.41.

Both bank­ing and health­care stocks surged late to fin­ish higher with NAB the only of the big four in the red, los­ing 0.1% at $24.90, while ANZ and Com­mon­wealth Bank were 0.3 and 0.4% higher re­spec­tively.

West­pac closed flat af­ter it was fined $3.3 mil­lion for un­con­scionable con­duct in the way its traders han­dled a key rate for sev­eral years.

Biotech com­pany CSL was a drag on its sec­tor, down 0.3% to $190.50, but Cochlear and ResMed were buoy­ant, lift­ing 1.8% and 1.7%.

In com­pa­nies news, Lendlease stocks plum­meted 18.3% to $14.25 af­ter launch­ing a re­view of its en­gi­neer­ing and ser­vices unit due to prob­lems on projects in­clud­ing Sydney’s NorthCon­nex mo­tor­way tun­nel.

It forced the con­struc­tion com­pany to take a $350 mil­lion post­tax pro­vi­sion in its first­half re­sults. — Busi­nessDesk/AAP

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