Market close: NZ shares start week off on right note

The S&P/NZX 50 Index closed 77.79 points or 0.65 per cent ahead at 12,018.23.

The New Zealand sharemarket began the week with a rise of more than half a per cent, and the gains were widely spread across the main board amongst the big and small cap stocks.

The S&P/NZX 50 Index went as low as 11,906.98 in the morning but recovered well to break through the 12,000 mark and close 77.79 points or 0.65 per cent ahead at 12,018.23. The index is now up 4.7 per cent for the year.

As investors hung back for next month’s reporting season, trading was again light with 24.07 million shares worth $80.45 million changing hands. There were 94 gainers and 45 decliners over the whole market, but very few standouts.

Greg Smith, head of retail with Devon Funds Management, said there’s a waiting game on the market with the United States Federal Reserve and European and Japanese central banks meeting later this week.

The Fed and European Central Bank are both expected to raise interest rates by 25 basis points while Japan is likely to remain on hold. The US hike to a range of 5.25-5.5 per cent would be the highest in 22 years and the 11th increase in 16 months.

“You won’t see much local news till our earnings season kicks off and generally the expectation isn’t that high because of the cooling economy and slowdown in growth,” Smith said. “The latest trade numbers showing a small surplus was a surprise, however.”

Imports and exports in June both totalled $6.3 billion and exports just edged ahead by $8.8 million. The market was expecting a deficit of at least $450m.

Milk powder, butter, cheese, iron and steel exports were all up, while the volume and value of imported petrol and diesel fell. Imported goods were down as much as $1b or 14 per cent compared with June last.

On the local market, the energy sector was solid with Meridian rising 20.5c or 3.86 per cent to $5.52, Mercury adding 4c to $6.45; and Manawa up 2c to $4.74.

Contact Energy was up 9c to $8.24 after reporting June mass market electricity and gas sales of 430GWH, down from 446GWh in the same month last year. Market return was $123.07 per MWh compared with $107.68 in June last year.

South Island hydro storage was 124 per cent of mean and North Island 123 per cent at July 17.

But Vector was down 1c to $4.01 after reporting a total of 612,909 electricity connections in June, up 2.1 per cent on the same month last year, and 119,631 gas connections, up 1.4 per cent. Distributed electricity volumes increased 2.3 per cent and gas distribution 3.8 per cent.

Leading stocks Auckland International Airport was up 7c to $8.37; Mainfreight collected 43c to $71.50; and Infratil gained 10c to $9.95.

There was strength in the property sector. Argosy was up 4c or 3.42 per cent to $1.21; Stride gained 6c or 4.17 per cent to $1.50; and Goodman Trust collected 3c to $2.245.

Retailers Briscoe Group rose 19c or 4.47 per cent to $4.44; Michael Hill gained 2c or 2.08 to 98c; Hallenstein Glasson was down 8c to $6.52; and KMD Brands declined 2c or 2.06 to 95c.

Michael Hill earlier told the market it has opened two new stores in Australia and one in Canada and closed three in Australia and two in New Zealand. It now has 304 stores including the 26 Bevilles stores.

Vulcan Steel rebounded 16c or 2.02 per cent to $8.07; Winton Land increased 4c or 1.9 per cent to $2.14; Smartpay Holdings was up 7c or 3.78 per cent to $1.92; and Tourism Holdings gained 10c or 2.89 per cent to $3.56.

Sanford was up 6c to $4.18; Steel & Tube added 3c or 2.56 per cent to $1.20; Bremworth gained 2c or 5 per cent to 42c; and 2 Cheap Cars was again on the move, rising 5c or 7.58 per cent to 71c.

Wine exporters Delegat Group gained 15c to $9, and Foley Wines was down 4c or 3.23 per cent to $1.20.

Comvita declined 11c or 3.44 per cent to $3.09; Skellerup Holdings was down 10c or 2.13 per cent to $4.59; Vista Group shed 5c or 2.66 per cent to $1.83; Pacific Edge decreased 0.009c or 4.71 per cent to 18.2c; and Carbon Fund slipped 5c or 2.98 per cent to $1.63.

Metro Performance Glass, unchanged at 18.5c, announced the resignation of director Rhys Jones, who is also chief executive of Vulcan Steel.

Last week Metroglass rejected an offer from Takutai, controlled by Vulcan Steel founder Peter Wells, and Masfen Securities to buy all the shares they don’t already own.

Metroglass told the market that Jones, a director since 2018, resigned with immediate effect to avoid any perception of a conflict of interest as Takutai is a substantial shareholder in both Vulcan Steel and Metroglass.