NZ stocks slip again ahead of OCR call, US inflation data - Market close

It was a mixed day for the energy sector. Meridian declined 6c to $5.85.

The New Zealand sharemarket was lower for the seventh time in eight trading days, but Heartland Bank livened things up with expansion plans in Australia.

The S&P/NZX 50 Index had a momentary rise at lunchtime but closed down 38.64 points or 0.32 per cent to 11,973.59. Over those eight days, the falls have been mainly small, with the index down 0.77 per cent.

There were 80 gainers and 63 decliners on the main board, with 26.94 million shares worth $97.98 million changing hands.

David McConnochie, investment adviser with Forsyth Barr, said the local market was in “wait and see mode” for the Reserve Bank monetary policy statement on Wednesday.

“The market is looking for any signal when interest rate cuts begin,” he said. “The European Central Bank also meets on Thursday night [NZ time] and may beat the United States to rate cuts in June.”

McConnochie said the latest US consumer price index, released this week, is expected to show inflation down to 3.7 per cent, from 3.8 per cent, and this is getting closer to the Federal Reserve’s target of 2-3 per cent.

The NZ Reserve Bank is expected to leave the official cash rate unchanged at 5.5 per cent and some economists expect the first rate cut by the end of the third quarter in August.

Heartland Group, last traded at $1.22, went into a trading halt for the final arrangements to raise $210m through a $105m share placement and $105m rights offer – shareholders will receive one new $1 share for every 6.85 shares held.

The money will be used to complete the Challenger Bank purchase which has received backing from the Australian Prudential Regulation Authority and NZ Reserve Bank.

Heartland will become the first New Zealand bank to buy an Australian deposit-taking institution. Heartland’s $2 billion Australian reverse mortgages and livestock finance businesses will be transferred to Challenger, which will be rebranded Heartland Bank Australia.

Chief executive Jeff Greenslade will step down at the end of the year after 15 years and Michelle Winzer, chief executive banking at RACQ Bank in Queensland, will lead Heartland Bank Australia, with Geoff Summerhayes as the board chair.

McConnochie said it was the first major capital raise this year and the Heartland Australian bank will get cheaper funding.

Auckland International Airport declined 15c or 1.82 per cent to $8.11; Ebos Group shed 25c to $34.40; Skellerup Holdings fell 12c or 2.6 per cent to $4.50; Tourism Holdings decreased 7c or 2.23 per cent to $3.07; and The Warehouse was down 4c or 2.68 per cent to $1.45.

In the energy sector, Mercury was up 10c to $6.75; Contact Energy was down 14c to $8.42; and Meridian declined 6c to $5.85.

Port of Tauranga was down 8c to $5.32; Briscoe Group decreased 7c to $4.58; Scales Corp declined 6c or 1.76 per cent to $3.34; Move Logistics shed 2c or 3.32 per cent to $2.18; and PaySauce was down 1c or 4.17 per cent to 23c.

Interest rate-sensitive property stocks Goodman Trust was down 4c or 1.76 per cent to $2.23; while Kiwi shed 1.5c or 1.75 per cent to 84c.

Winton Land was up 5c or 2.27 per cent to $2.25; PGG Wrightson increased 7c or 3.32 per cent to $2.18; Michael Hill gained 2c or 2.67 per cent to 77c; and Colonial Motor Co rose 30c or 3.55 per cent to $8.75.

Green Cross Health was up 2c or 1.96 per cent to $1.04; ikeGPS added 3c or 7.59 per cent to 42.5c; Rakon rose 4c or 3.48 per cent to $1.19; and Metro Performance Glass gained 0.0056c or 4.76 per cent to 11c.

SkyCity, up 2c to $2.04, told the market its chief operating officer in Australia, David Christian, is leaving at the end of the week and Avril Baynes, general manager of hospitality at the Adelaide casino, will fill the role on an interim basis.