Market close: Mainfreight hits new high; NZX's 'early Santa Claus rally' continues

Mainfreight broke through the $50 mark to a new high, climbing $2.80 or 5.77 per cent to $51.30. Photo / File

Global transport operator Mainfreight took its turn to lead the New Zealand sharemarket to greater heights. The recovery since the low days of late March and the nationwide Covid-19 lockdown is now being described as "an early Santa Claus rally".

The S&P/NZX 50 Index had its 11th daily rise, increasing 89.76 points or 0.72 per cent to 12,543.61. There were 77 gainers and 55 decliners over the whole market on solid volume of 56.49 million shares worth $206.01 million.

When the index fell to its lowest mark this year of 8498.69 points on March 23, no one would have expected that the 50 per cent plus rebound would happen so quickly and so strongly.

Dan Stratful, investment adviser with Forsyth Barr, said over the past five years the market has experienced price increases in the month of December, which has become known as the Santa Claus rally. "It seems to have come early this year."

He said the market recovery is "a bit of surprise coming up to the United States election. You wouldn't think we are in a so-called recession and the New Zealand market is hitting new highs. It's been a defiant recovery driven by low interest rates."

Mainfreight broke through the $50 mark to a new high after reporting increased business for the first six months of its 2021 financial year. It climbed $2.80 or 5.77 per cent to $51.30 on 825 trades worth $3.3m. Mainfreight's share price has doubled since reaching $25.10 on the index's lowest day this year on March 23.

The transport operator said estimated revenue for the half-year ended September improved 7.2 per cent to $1.6 billion and gross profit was up 23.4 per cent to $102m. Ongoing trading improvements from established customers and increasing market shares keeps all three divisions - transport, warehousing and air and ocean freight – busy, the company said.

Cancer diagnostics company Pacific Edge, with a market capitalisation of $529,000, sprung to life after announcing it will be rejoining the NZX 50 Index on October 21 to replace Metlifecare, which will be dropping off after the takeover by Asia Pacific Village Group, subject to final court approval.

Pacific Edge's newly gained status pushed up its price 8c or 12.31 per cent to 73c on heavy trading of 6.13m shares worth $4.5m. Pacific Edge was last in the top 50 index between March 2014 and September 2015 after which its share price languished around 15c until recently.

Ebos Group had another strong day, rising 90c or 3.46 per cent to $26.90, a2 Milk was up 14c to $16.26, Pushpay Holdings gained 15c to $9.40, Infratil climbed 15c or 2.91 per cent to $5.31, Restaurant Brands recovered 32c or 2.7 per cent to $12.17, and Fisher and Paykel Healthcare increased 39c to $35.75.

Jeweller Michael Hill International was one of the day's biggest movers, rising 5.5c or 12.36 per cent to 50c. Software firm ikeGPS Group, which analyses pole and overhead asset information, has signed up with one of United States largest electricity companies and its share price shot up 20c or 22.22 per cent to $1.10.

The hot property sector is experiencing "cap rate compression" in a market where keen investors are driving up values. Argosy Property was up 2.5c to $1.435, Property for Industry gained 3c to $2.85, and Stride Property increased 5c or 2.27 per cent to $2.25.

The movers in the equally hot energy sector were Vector, up 9c or 2.07 per cent to $4.44, and Genesis, up 4c to $3.15.

Auckland International Airport lost 5c to $7.45 after reporting a further decline in passenger traffic during August and September. Strong performer Ryman Healthcare fell 6c to $15.11, Hallenstein Glasson was down 15c or 2.44 per cent to $6, and Fletcher Building declined 9c or 2.07 per cent to $4.26.