Market commentary
WELLINGTON: The lagging New Zealand sharemarket snapped an eightday losing streak with a small but significant gain, but global marketer a2 Milk continued its slump.
The S&P/NZX 50 Index raced ahead to an intraday high of 12,442.65 by lunchtime but then steadied and closed at 12,410.47, up 42.61 points or 0.34%.
There were 71 gainers and 68 decliners over the whole market on light trading of 33.9 million shares worth $105.15 million.
Greg Smith, head of research with Fat Prophets, said the market had ‘‘a bit of a relief bounce after the weakness last week. The inflationary concerns aren’t going away, and it’s a case of the market acclimatising to the prospect of a higher inflation rate and higher interest rates down the track.’’
ANZ economists are predicting that the Reserve Bank of New Zealand will begin raising the official cash rate in August next year with gradual but steady increases, and the rate will reach 1.25% by the end of 2023. That would be a (steep) 1% rise from the current 0.25%.
Fisher and Paykel Healthcare kept the market steady with a 58c rise to $33.48; Ebos Group increased 65c or 2.15% to $30.95; Restaurant Brands surged 60c or 4.51% to $13.90; and Skellerup Holdings was up 14c or 3.13% to $4.61.
Summerset Group Holdings rose 24c or 1.94% to $12.59; but other retirement village operators Ryman Healthcare was down 15c to $14.50, and Oceania Healthcare fell 4c or 2.94% to $1.32.
Chorus submitted an annual revenue range of $720 million$820 million to the Commerce Commission for the 202224 regulatory period, and its share price increased 6c to $6.31.
Other gainers were Pushpay, up 5c or 3.09% to $1.67; Serko moving 14c or 2.24% to $6.39; Vista Group climbing 12c or 5.71% to $2.22; Kathmandu Holdings picking up 5c or 3.27% to $1.58; and Scales Corporation collecting 13c or 2.96% to $4.52.
Electricity generator and retailer Trustpower picked up 1c to $8.34 after reporting a sound annual result for the year ending March. Trustpower’s revenue slipped 4% to $952.78 million; its net profit was down 69% to $30.73 million; but its group operating earnings (ebitdaf) grew 7.3% to $2002 million.
Trustpower’s retail earnings (ebitdaf) were ahead 33% at $47 million, its generation earnings were steady at $154 million despite dry conditions, and it announced a welcomed total dividend of 18.5c a share, a 17c final and a catchup 1.5c special dividend, payable on June 18.
Insurer Tower fell 5c or 5.81% to 81c after downgrading its 2021 net profit to $25 million$27 million, from the previous guidance of $298 million. Tower said this revision reflected emerging industry trends of inflationary pressures on building costs, as well as higher frequency of house claims.
SkyCity Entertainment has raised $175 million through a sixyear unsecured bond carrying an interest rate of 3.02% a year, and its share price climbed 1c or to $3.50.
Precinct Properties New Zealand launched a $100 million, sixyear, fixedrate green bond offer to institutional and retail investors. Its share price slipped 0.005c to $1.605.
Fletcher Building was down 6c to $7.28. —