Index takes RBNZ news in upward stride

Power co gains more vexing than unchanged policy

The New Zealand sharemarket had a late surge after trading flatly for most of the day as the Reserve Bank signalled business-as-usual in its monetary policy.

The S&P/NZX 50 Index closed 94.96 points or 0.75 per cent ahead at 12,751.38, after moving from an intraday low of 12,656.42. There were 85 gainers and 55 decliners over the whole market on steady volume of 56.15 million share transactions worth $193.13 million.

The Reserve Bank maintained its “loose and easy” policy, as expected, with no changes to the 0.25 per cent official cash rate, the funding for lending scheme and the $100 billion cap on large-scale asset purchases — the latter two programmes running through to June next year.

Shane Solly, portfolio manager with Harbour Asset Management, said the bank was continuing to hold the line by keeping its monetary policy very stimulatory and there was little response from the market.

“The bank is taking a wait-and-see approach, and there are a few challenges ahead, such as what will happen to the housing market and what will be the impact of the transtasman travel bubble,” said Solly.

The bank said it would look though at current inflation pressures, with these largely being driven by temporary factors, including supply chain disruptions and high oil prices.

Of more concern to the market was the continuing rise in the leading energy stocks — Contact was up 24c or 3.26 per cent to $7.61 on trade worth $28.4m, and Meridian increased 26c or 4.49 per cent to $6.05 on trade worth $30.6m. Solly said the market was becoming baffled by “the wrong-way trades” as the two iShares Global Clean Energy exchange traded funds complete their selling and rebalance their weightings in Contact and Meridian by tomorrow.

“Their prices are going up and they should be going the other way,” he said. “We will see how things go over the next two days.”

Synlait Milk rose 13c or 3.8 per cent to $3.55; Infratil increased 11.5c to $7.01; Scott Technology climbed another 10c or 4 per cent to $2.60;

Argosy Property was up 6c or 3.53 per cent to $1.51; and Vista Group picked up 9c or 3.95 per cent to $2.37.

A2 Milk continued to recover, rising 6c to $8.95. A new North America scientific study from Purdue University suggested that A2 milk may cause fewer symptoms of lactose intolerance. Arvida rose 6c or 3.53 per cent to $1.76 following a report outlining the growth opportunities in the aged care sector; but

Ryman Healthcare fell 14c to $14.86.

Pushpay Holdings rebounded 5c or 2.59 per cent to $1.98 after being told by a broker that it didn’t make the most of its opportunities in the United States last year.

Manuka honey producer Comvita fell 7c or 2.10 per cent to $3.26 a day after upgrading its full-year operating earnings forecast.

Software-as-a-service firm Geo was subject to a price inquiry from the NZX’s NZ RegCo and it said it was complying with continuous disclosure obligations. Geo’s share price rose 1.2c or 10.26 per cent to 12.9c, an increase of 27.5 per cent since March 24.