Market commentary
WELLINGTON: Australia’s first interest rate hike in more than 11 years to combat rising inflation buffeted the New Zealand sharemarket, which fell nearly 1% yesterday.
The S&P/NZX 50 Index started strongly but fell steadily throughout the afternoon in expectation of the Australian Reserve Bank announcement.
The index closed down 108.44 points or 0.92% to 11,675.92 after reaching an intraday high of 11,830.05.
It was another light trading day of 19.48 million shares worth $55.68, and there were 45 gainers and 81 decliners on the main board.
The Australian Reserve Bank increased its official cash rate 25 basis points to 0.35% after reaching a record low of 0.1% in November 2020. Inflation across the Tasman has risen to 5.1%, and the bank signalled more rises to come.
Hamilton Hindin Greene investment adviser Jeremy Sullivan said the local market was experiencing a buyer’s strike.
‘‘Investors are getting fatigued about what to do next and buying is starting to dry up. They are waiting for the markets to settle down and for cues to buy. They are struggling to see past the rising inflation and interest rates and what will happen in Ukraine,’’ he said.
Mercury declined 11c or 1.82% to $5.95. Mercury now has a market capitalisation of $8.22 billion, with only Spark, Auckland International Airport, Meridian and
Fisher and Paykel Healthcare above it.
Other energy companies Vector gained 5c to $4.42, and Trustpower was up 10c to $7.
Auckland International Airport decreased 14c to $7.66; Mainfreight declined $1.45 to $79.80; Port of Tauranga was down 15c or 2.33% to $6.30; Serko lost 11c or 2.1’6% to $4.99; and Steel & Tube fell 7c or 4.58% to $1.48.
The dividendyielding property companies were hit. Stride was down 5c or 2.63% to $1.85; Argosy fell 4.5c or 3.4% to $1.328; Goodman Property Trust declined 5c or 2.24% to $2.18; Kiwi Property shed 3c or 2.84% to $1.025; and Vital Healthcare Property Trust was down 3.5c to $3.
Infratil manager Morrison & Co has bought just over 5 million of its shares for almost $40 million. Infratil’s share price was down 14.5c to $8.20.
Skellerup Holdings rebounded 19c or 3.45% to $5.70; Comvita increased 6c or 1.81% to $3.38; Fonterra Shareholders’ Fund was up 4c to $2.84; and Eroad gained 13c or 4.06% to $3.33.
Software firm ikeGPS surged 12c or 16% to 87c after reporting an increase in revenue and signed contracts for the year ending March. Z Energy will delist from the NZX on May 10 following the $2b sale to Australian fuel retailer Ampol. In turn, Ampol is selling Gull Petroleum to Allegro Funds for $572m. —
BUSINESS South chief executive Mike Collins has told the Dunedin City Council there is a ‘‘communication breakdown’’ between the council and businesses.
Yesterday, Mr Collins presented the business support group’s submission at the council’s 202223 annual plan hearing.
The submission covered issues, such as housing and labour, its members believed would affect businesses over the next 12 months.
Speaking to councillors, Mr Collins said there was some frustration from businesses towards the council, but it was something that could be easily fixed.
The solution was to have improved communication between the council and local businesses, he said.
‘‘It’s also about us at Business South playing a role in translating that message to the community,’’ Mr Collins said.
The feedback Business South received was that there was frustration from small businesses about some of the council’s initiatives that were already under way.
‘‘There is a communication breakdown . . . between a lot in the business sector and what is going on at the council . . . and we are happy to help be a part of the solution,’’ Mr Collins said.
The business sector wanted to have an ‘‘open and transparent’’ conversation about the housing shortage in Dunedin.
‘‘It would be nice to create an environment where we have ideas coming through from the private sector and work with council about where are they’re seeing the burdens and roadblocks, as well as the opportunities,’’ Mr Collins said.