Market Announcements
Market Summary
The New Zealand sharemarket surged to a new all-time high, rising 1%, as Infratil’s datacentre investment continues to deliver, and long-established Bremworth faces a shareholder revolt.
The S&P/NZX 50 Index climbed at the open, traded steadily, and rose late, closing at 13,763.10, up 144.68 points, or 1.06%.
The index beat the previous record close of 13,757.71 points achieved on Jan 14 this year.
There were 84 gainers and 53 decliners on the main board, and turnover reached 38 million shares worth $127.4m.
‘The inflation crocodile’
The market is eagerly awaiting the Reserve Bank of NZ (RBNZ) monetary policy review on Wednesday, with mixed views on a possible hike in the Official Cash Rate (OCR) to 2.5%.
The market was still pricing in an 80% chance of an increase, but with the oil price coming down and the US-Iran war holding, more people are talking about keeping the cash rate on hold.
This would be good for confidence and the economy. The New Zealand savings rate is at its highest level since the covid pandemic – people have built in precautionary savings. ASB said the big four banks were split, but expect the Reserve Bank to hold the OCR at 2.25%. Monetary policy-making during an economic shock is a bit like jumping at a crocodile in a dimly lit room.
“Data to confirm if the inflation crocodile is real and has teeth is due after (this week’s) monetary policy review, and we think the decline in oil prices gives the Reserve Bank time to wait for this,” ASB said.
ANZ said overall card spending lifted 0.1% in June, with annual growth accelerating to 5.8%.
The ANZ World Commodity Price Index was down 1% in June, with all components falling except meat and fibre – largely caused by the oil price fall as Middle East tensions eased and the Hormuz Strait began reopening.
Local stocks
Infratil increased 30c, or 1.98%, to $15.42 after telling the market its major investment in CDC Data Centres has increased from A$1.76 billion (NZ$2.1b) to A$9.21b, reflecting a 23.6% gain in valuation to a mid-point of A$ 18.5b, up $3.5b, for the June quarter.
Infratil, with a 49.72% stake, said CDC’s valuation increase was driven by strong growth in contracted capacity to more than 1GW, the acceleration of its build programme, and the expansion of the total pipeline from 2.6GW to 3.9GW through full-year 2040.
It’s rumoured that CDC is likely to secure a contract to supply 500MW of capacity to the American artificial intelligence company Anthropic.
Fisher & Paykel Healthcare was up 64c to a three-month high of $40.35, and a2 Milk continued its climb, gaining 25c or 2.75% to $9.35. A2 Milk went from the fifth to the fourth-strongest brand when the China 618 e-commerce shopping festival ended (on June 18). The brand hasn’t suffered from the product recall in the US.
UBS Group AG has increased its stake in a2 Milk from 5.33% to 6.5%.
Ebos Group increased 51c or 2.43% to $21.49; Mainfreight gained 61c to $64.29; Vista Group rose 15c or 6.52% to $2.45; Delegat Group was up 18c or 4.46% to $4.22.
T&G Global increased 11c or 4.6% to $2.50; Michael Hill gained 1.5c or 3.7% to 42c; and Blackpearl Group added 3c or 5% to 63c.
Carpet maker Bremworth, established in 1959, fell 14c, or 15.73%, to 75c following its shareholders' opposition to a takeover by American flooring manufacturer Mohawk Industries.
Largest shareholder David Ferrier and Mangawhai Collective, and TR Harrison Securities Trust, with stakes totalling 21.8%, told the market they would vote against the scheme of arrangement with Auckland-based Floorscape, a subsidiary of Mohawk.
The takeover offer of 95c-$1.05 a share (cash 75c and capital distribution of 20-30c a share) – reduced in February from $1.05-$1.15 a share – was last week backed by the NZ Commerce Commission.
Ferrier said in a letter to Bremworth, “We are not satisfied that the transaction is in the long-term interests of the wool industry, its participants or customers.
“We are mindful that the scheme continues to take its toll on Bremworth’s value and potential. The company continues to incur extraordinary internal and external costs in connection with the scheme,” Ferrier said.
Other decliners were Gentrack, down 7c or 1.83% to $3.75; PGG Wrightson, down 6c or 2.65% to $2.20; and The Warehouse, down 1.5c or 2.59% to 56.5c.
Source: BusinessDesk
Australian Market Report
Ahead of the local open SPI futures were 8 points lower at 8833.
- close [Morningstar with AAP]: The Australian share market has managed to avoid a third straight day of losses thanks to a bounce from the banking sector.
The benchmark S&P/ASX200 index on Thursday finished up 1.6 points, or 0.02 per cent, at 8,724.5, while the broader All Ordinaries lost half a point to finish at 8,930.9.
IG analyst Tony Sycamore said 4the ASX200 had dropped 66 points at the open to a three-week low of 8656.20.
Then fresh buying, likely for the start of the new financial year, entered the market and helped it claw back all of its early losses, Mr Sycamore said.
Despite the flat finish just two of the ASX's 11 sectors finished in the green - health care and financials.
The latter rose 1.2 per cent following a rough session on Wednesday.
All of the big four retail banks rose, NAB the most, climbing 3.8 per cent to $38.41.
Westpac added 2.2 per cent to $35.46, ANZ climbed 0.9 per cent to $34.79 and CBA grew 0.3 per cent to $161.14.
In the heavyweight mining sector, goldminers rose as the precious metal rebounded to $US4,077 an ounce following a dip below $4,000 earlier in the week.
Evolution climbed 1.9 per cent, Northern Star grew 5.5 per cent and Newmont added 2.6 per cent.
Elsewhere in the sector, BHP lost 0.6 per cent to $59.57, Rio Tinto grew 0.3 per cent to $171.27 and Fortescue lost 1.5 per cent to $18.96. ????
The Australian dollar was trading for 68.94 US cents, from 68.90 US cents at 5pm AEST on Wednesday.
ON THE ASX:
??The S&P/ASX200 on Thursday rose 1.6 points, or 0.02 per cent, to 8,724.5
The broader All Ordinaries lost half a point to 8,930.9
The NZX 50 added 144.68 points (1.05%) to 13763.1
Overseas Market Report
[Morningstar with Dow Jones]:
U.S. stocks ended higher. The DJIA lifted 0.3% to 53,055.91, the S&P 500 added 0.7% to 7,537.43 and the Nasdaq climbed 1.1% to 26,121.16.
Among S&P 500 companies, the top three gainers were Arista Networks Inc ANET surging 8.31%, Western Digital Corp WDC jumped 7.14%, and Tesla Inc TSLA lifted 6.69%.
The biggest decliners were O'Reilly Automotive Inc ORLY which dropped 6.65%, AutoZone Inc AZO fell 6.38%, and Alexandria Real Estate Equities Inc ARE lost 5.15%.
Asia
Chinese shares closed lower. The benchmark Shanghai Composite Index fell 0.1% to 4,041.24 and the Shenzhen Composite Index dropped 1.3% to 2,756.56.
Hong Kong shares ended higher. The benchmark Hang Seng Index added 1.1% to 23,616.32.
Japanese shares ended flat. The Nikkei Stock Average was unchanged at 69,737.69.
India shares ended higher. The BSE SENSEX rose 0.7% to 78,285.07.
Europe
Stocks in the U.K. finished lower. The FTSE 100 Index declined 0.3% to 10,651.77. In Europe, shares closed mixed. The Germany's DAX climbed 0.1% to 25,817.89, and the France's CAC 40 fell 0.3% to 8,479.87
