Buoyant bank shares provide a late boost

After feeling sleepy for most of the day, the New Zealand sharemarket had a late surge, boosted by the strong performance of the banks on both sides of the Tasman.

The S&P/NZX 50 Index finished at 11,797.08, up 107.18 points or 0.92 per cent, with 36.98 million shares worth $133.78 million changing hands.

There were 33 decliners and 96 gainers, though overall they were small moves by stocks, apart from clothing retailer Hallenstein Glasson and the dual-listed banks.

Hallenstein Glasson was the day’s biggest mover, soaring $1 or 21.98 per cent to $5.55 after reporting a solid full-year result. Hallenstein’s revenue was virtually the same as the previous year at $287.76m and its net profit was down 4.29 per cent to $27.77m, from $29.02m. It is paying a final dividend of 24c a share on December 15.

Hallenstein said online sales grew 46.87 per cent with exceptional growth of 80 per cent in the second half of the 2020 financial year to August. Online now represents 21.88 per cent of total sales.

Group sales were $287.76m, up 0.1 per cent on the previous year’s $287.55m.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said during February and March, Hallenstein Glasson was talking down the second-half performance and all the while it was taking the wage subsidy worth $2.4m. “They posted a $27m profit and this equates to $1.2m worth of the subsidy for shareholders — that’s cash they would not have otherwise had,” he said.

The banks performed strongly, a day after Westpac Banking Corporation received the largest corporate fine of $A1.3 billion ($1.4b) for 23 million contraventions of Australia’s Anti-Money Laundering and CounterTerrorism

and Financing Act.

Westpac rose $1.34 or 7.67 per cent to $18.81 and ANZ Banking Group climbed 94c or 5.18 per cent to $19.10. Across the Tasman, National Australia Bank was up 6.22 per cent to A$18.26 and Commonwealth Bank of Australia gained 2.71 per cent to A$65.94. The banks led the S&P/ASX 200 Index, which had climbed 1.3 per cent to 5952 points at 5.45pm (NZ time).

Sullivan said obviously the Westpac fine was not as high as people expected. “It’s a slap on the hand with a wet bus ticket — working out at $56 per breach.”

In the low-key day, Fisher & Paykel Healthcare was up 65c to $33.75, a2 Milk gained 29c to $18.44, Chorus recovered 29c or 2.27 per cent to $8.55, and Freightways snatched another 14c to $7.85.

Among the decliners, Gentrack Group fell 11c or 7.28 per cent to $1.40, as it significantly cut costs.