Market close: NZ stocks continue to drift amid economic uncertainty

SkyCity shares fell 6c or 2.59 per cent to $2.26. Photo / Peter Meecham

The New Zealand sharemarket drifted further on uncertainty about United States inflation and the China economy, while the world’s largest investment fund BlackRock added some intrigue.

The S&P/NZX 50 Index softened in the afternoon and closed at 11,811.77, down 26.49 or 0.22 per cent after reaching an intraday high of 11,858.52. The index has fallen 1.11 per cent so far this week.

There were 54 gainers and 69 decliners on the main board with 28.97 million share transactions worth $64.6 million. Ebos Group, down 20c to $35.50, topped the individual trading list with $49.55m worth of its shares changing hands.

Greg Smith, head of retail with Devon Funds Management, said the local market was in a waiting game with the New Zealand reporting season kicking off in earnest next week and “a very important” US inflation number overnight.

In an unusual move, the NZX Product Operations put out a note that BlackRock asked to retract the substantial product holdings notices for 11 New Zealand stocks.

BlackRock is the world’s largest asset manager, with US$8.59 trillion in assets under management at the end of last year.

The retraction related to BlackRock’s shareholdings in Goodman and Vital Healthcare Property Trusts, Oceania Healthcare, Summerset Group, Stride Property, a2 Milk, Property for Industry, Pacific Edge, Auckland International Airport, Contact Energy and Ryman Healthcare.

One commentator suggested BlackRock may be completing a custodial deal in New Zealand for its shareholdings.

Wall Street was again weaker with the Dow Jones Industrial Average down 0.54 per cent to 35,123.36 points; S&P 500 declining 0.7 per cent to 4467.71; and Nasdaq Composite falling 1.17 per cent to 13,722.02.

The Nasdaq has fallen 4.4 per cent this month but is up 31 per cent for the year, S$P 500 is down 2.6 per cent and Dow Jones 1.2 per cent.

The US July consumer price index (CPI) is expected to show annual inflation increasing to 3.3 per cent from 3 per cent in June, with crude oil rising and hitting a nine-month high. The Federal Reserve has said any further interest rate rise is dependent on economic data.

Smith said China is moving into deflation with consumer and producer prices falling last month for the first time since November 2020. The July CPI slipped to minus 0.3 per cent from zero in June and producer prices fell for the 10th consecutive month, contracting 4.4 per cent from a year ago.

He said there were concerns about the Chinese economy and people were hoping for further government economic stimulus measures.

In the first company result of the latest reporting season, Vital Healthcare Property Trust – unchanged at $2.345 - achieved an 18 per cent increase in operating revenue to $145.22m for the year ending June. It had a net loss of $152.4m mainly because of a $205.1m reduction in the valuation of its $3.4 billion property portfolio of private hospitals and health centres.

Vital told the market it continues to have a market-leading portfolio of high-quality, healthcare assets across Australia and New Zealand with 99 per cent occupancy and a weighted average lease term of 17 years to the leading operators for each country.

Despite recent heightened market volatility, healthcare property remains a defensive asset class, underpinned by a high level of government support and non-discretionary spending, Vital Healthcare said.

Fisher and Paykel Healthcare was down 18c to $23.33; a2 Milk shed 10c or 1.78 per cent to $5.52; Summerset declined 17c to $9.90; Ryman decreased 11c to $6.53; and SkyCity fell 6c or 2.59 per cent to $2.26.

Stride Property declined 5c or 3.36 per cent to $1.44; Delegat Group was down 15c to $9; Tourism Holdings decreased 6c to $3.35; Task Group shed 2c or 3.57 per cent to 54c; and 2 Cheap Cars fell 3c or 5.66 per cent to 50c.

Among the retailers, Briscoe Group was down 4c to $4.70, KMD Brands declined 2c or 2.22 per cent to 89c; and The Warehouse increased 6c or 3.53 per cent to $1.76.

Fletcher Building rose 16c or 2.97 per cent to $5.55; Chorus gained 8.5c to $8.56; Seeka was up 6c or 2.37 per cent to $2.59; Move Logistics added 2c or 2.5 per cent to 82c; and PGG Wrightson collected 8c or 1.9 per cent to $4.28.

Contact Energy, up 4c to $8.40, is making a tender for 50 megawatts of electricity for a minimum five years. Contact told the market that the proactive release of an open tender aligns with Contact’s decarbonisation commitment, and the surge in requests from businesses who want long-term electricity contracts to support their own decarbonisation targets.

Scales Corp declined 3c to $3.08 after announcing it was expanding its global proteins division into the European market by subscribing for a 50 per cent shareholding in a new pet food processing operation, Esro Petfood BV based in The Netherlands.

Scales is providing lending of €15m euros ($27.15m) for two processing plants, the first to be built in Belgium. Scales invested in Australia alongside one of the Esro owners, the Fayman family.

Fonterra Shareholders’ Fund gained 8c or 2.19 per cent to $3.74. The dairy cooperative is making its capital return of 50c a share (amounting to $800m) to shareholding farmers on August 18.