Market commentary

WELLINGTON: The New Zealand sharemarket dipped nearly 0.5% yesterday on the eve of the Reserve Bank’s latest interest rates move, and Infratil continues to set the pace among individual stocks.

The S&P/NZX 50 Index had a soft afternoon and fell 48.8 points to 11,944.20 as it waited for the Reserve Bank monetary policy statement today, with an expected 25basis point increase in the official cash rate to 5.5%.

There were 69 gainers and 58 decliners over the whole market on volume of 26.63 million shares worth $119.84 million.

Hamilton Hindin Greene investment adviser Jeremy Sullivan said the market was eagerly anticipating the Reserve Bank announcement, as well as a conclusion to the negotiations on the United States debt ceiling.

‘‘Most of the index movement downwards was driven by Fisher and Paykel Healthcare and Mercury Energy. But Infratil continues to be a shining light on the market following its latest result — near 12% rise in earnings.’’

Market leader Fisher and Paykel Healthcare fell 64c to $25.66 as the New Zealand dollar continued to strengthen against the US greenback.

The NZ dollar was trading at US62.79c, up from US61c last week.

Mr Sullivan said 95% of Fisher and Paykel’s earnings come from overseas, a lot of it in the US.

Mercury, whose supply is mainly North Islandbased, fell 11c to $6.40 after Transpower warned about rolling power cuts during the winter.

National grid operator Transpower said it was working closely with the electricity sector to manage potentially tight supply during cold snaps this winter, and consumers might be asked to cut back on power use at peak times.

In other energy stocks, Contact declined 4c to $8.02; Genesis was down 3c to $2.71; Manawa fell 5c to $4.73; and Meridian rose 3c to $5.44.

Utilities investor Infratil rose 17.5c to $9.63 after falling nearly 3% the day before, and was now trading at alltime highs since listing in 1994.

Mr Sullivan said investors had digested Infratil’s update and the stock had done incredibly well.

‘‘Infratil has a nice diverse portfolio and there’s further upside with the USbased Longroad Energy which is expected to have a material uplift with its renewables.’’

Decliners yesterday included: Mainfreight $71 (down 50c); Freightways $9.29 (13c); Skellerup Holdings $4.75 (10c); Restaurant Brands $6.90 (10c); Hallenstein Glasson $6.03 (20c); Gentrack $4.10 (19c); KMD Brands $1.11 (3c); and Smartpay Holdings $1.55 (3c).

Gainers included: Eroad 58c (up 5c); Oceania Healthcare 79c (3c); Pacific Edge 47.5c (1.5c); and Sky TV $2.55 (5c).

Turners Automotive was down 1c to $3.79 after reporting a 4% increase in net profit to $32.56m for the year ending March. Turners is paying a final dividend of 7c a share.

Tower, down 1c to 60c, has bought $100 million of reinsurance cover for a fourth catastrophe event up to $889 million. Tower already has similar cover for a third catastrophe event and told the market it has sufficient reinstatement cover for Cyclone Gabrielle insurance claims.

NZ Oil & Gas was up a further 0.005c to 38.5c. It has risen from 36c on Friday since announcing the eighth well in the Indonesian Mahato PB field is producing 800 barrels of oil a day. —