Shares chalk up best week in more than a year
The re-energised New Zealand sharemarket made another significant gain on a lively day featuring a $150 million takeover offer for MHM Automation, one of the country’s oldest engineering companies.
The S&P/NZX 50 Index closed at 11,118.92, up 74.48 points or 0.67 per cent, and gained 3.24 per cent for the week after four successive days of rises. It was the best week of trading since early July last year.
The index has now fallen almost 3 per cent this year, an improvement from the decline of 6.2 per cent at the end of last week.
There were 100 gainers and 32 decliners over the whole market, with 26.16 million shares worth $69.12m changing hands.
Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said the market was again driven by the fall in bond yields, and the move by the US Federal Reserve to keep its funds rate on hold.
“We have a yield-sensitive market and any indication of interest rates falling is pleasing,” Sullivan said. “Some people in the US are expecting three rate cuts next year but the Fed has commented it is not even thinking of cuts.
“The Fed is well aware the market would take off with any [reduction] signal and possibly re-ignite inflation.”
Even so, Wall Street had another strong day, with the Dow Jones Industrial Average increasing 1.7 per cent to 33,839.08 points; the S&P 500 rising 1.89 per cent to 4317.78; and the Nasdaq Composite up 1.78 per cent to 13,294.19. The indices were on track for weekly gains of about 5 per cent.
MHM Automation, which was started in Christchurch in 1884 by James Mercer, surged 61c or 67.03 per cent to $1.52 after receiving the takeover offer from Ohio-based company Bettcher Industries.
The offer, backed by the MHM non conflicted directors, is $1.70 a share, a premium of 86.8 per cent on the closing price the day before. Both companies are leading manufacturers of automated equipment for food processing plants.
Mainfreight was up another 90c to $61, jumping from $56.30 in a week. Fisher & Paykel Healthcare rebounded a further 40c or 1.86 per cent to $21.90. Port of Tauranga recovered 7c to $5.15.
Freightways was up 8c to $7.88; a2 Milk gained 6c to $4.33; Heartland Group added 3c or 1.9 per cent to $1.61; Manawa Energy collected 8c or 1.9 per cent to $4.30; and Scales
Corp rose 16c or 5.44 per cent to $3.10. Among the retailers, KMD Brands increased 4c or 4.82 per cent to 87c, and The Warehouse was up 4c or 2.3 per cent to $1.78.
Other gainers were Turners Automotive, up 8c or 1.96 per cent to $4.17; Property for Industry increasing 5c or 2.35 per cent to $2.18; Arvida Group gaining 5c or 4.55 per cent to $1.15; and Tourism Holdings rising 20c or 5.97 per cent to $3.55.