Market close: Retirement stocks gain but sharemarket remains flat

Retirement stocks were stronger, including Summerset Group which was up 21c or 2.1 per cent to $10.21. Photo / NZME

The New Zealand sharemarket finished the week with a very small gain, but investors are wary about the continuing rise in long-term bond yields.

The S&P/NZX 50 Index’s routine didn’t surprise, falling in the morning and recovering in the afternoon to close at 11,943.2, up 6.58 points or 0.06 per cent.

The index reached an intraday low of 11,906.83 points and was flat for the week.

There were 69 gainers and 55 decliners over the whole market on volumes of 25.59 million share transactions worth $90.03 million.

Shane Solly, portfolio manager with Harbour Asset Management, said “we are seeing some pretty wary markets. There was some mixed company reporting in the United States overnight, the Chinese economic stimulus is more measured than expected, and bond yields keep going up.”

The US 10 Year Treasury Note yield has risen from 3.95 per cent to 4.176 per cent this week and back to some of the highest levels in five years. The New Zealand 10 Year Government Bond yield went from 4.68 per cent to 4.83 per this week, and near to last year’s high of 4.88 per cent.

The rising bond yields provide a risk to the valuation and cash flow of the interest rate-sensitive stocks.

In the US, the two big stocks Apple and Amazon both beat market estimates with their second quarter earnings.

Apple, the world’s largest company by market value, reported a 2.3 per cent rise in net profit to US$19.9 billion and revenue of $81.8b, down 1 per cent. Paying subscribers for its digital services topped one billion users worldwide. Apple’s share price was down 0.73 per cent to US$191.17.

Amazon sales reached US$134.4b, up 11 per cent, and earnings $6.7b compared with a loss of $2b in the previous corresponding period. Amazon’s share price was up 0.55 per cent to US$128.91.

At home Genesis Energy, down 3c to $2.67, told the market that the Huntly Unit 5 combined cycle gas plant is expected to be back in service in late May next, with circuit breaker components being manufactured overseas. The impact on the outage is estimated at $20m-$30m.

Solly said wholesale electricity prices spiked on the announcement of further delays in bringing Huntly online.

Mercury, which has plenty of hydro storage in the North Island, benefited by gaining 3c to $6.50. Meridian was down 2c to $5.58, and Contact declined 3c to $8.33.

As expected, Fonterra cut its 2023/24 farmgate milk price forecast to a mid-point of $7kg/MS, from $8, mainly because of ongoing reduced import demand for whole milk powder in China. Fonterra Shareholders’ Fund was up 2c to $3.64.

This followed the release of the ANZ World Commodity Price Index which fell 2.6 per cent in July and in local currency terms 3.8 per cent as the NZ dollar strengthened by 1.2 per cent.

Meat and fibre prices down 5.1 per cent, dairy 3.1 per cent and aluminium all fell as global demand for these commodities weakened further. Horticulture prices were up 1.6 per cent and forestry 0.2 per cent but log prices are still 17 per weaker than a year ago.

Ebos Group was up 13c to $37.59; Mainfreight increased 79c to $68.39; Briscoe Group added 12c or 2.56 per cent to $4.80; Restaurant Brands collected 17c or 2.74 per cent to $6.38; and Steel & Tube rose 5c or 4.1 per cent to $1.27.

Retirement stocks were stronger, with Summerset Group up 21c or 2.1 per cent to $10.21; Ryman Healthcare gaining 8c to $6.82; Arvida Group rising 4c or 3.23 per cent to $1.28; and Oceania Healthcare adding 1c to 78c.

ANZ Group, up 32c to $27.27, has had its bid to buy Suncorp’s banking arm rejected by the Australian Competition and Consumer Commission. Both parties are now referring the decision to the Australian Competition Tribunal.

Fellow banking groups Westpac increased 60c or 2.56 per cent to $24, and Heartland was up 4c or 2.27 per cent to $1.80.

Fisher and Paykel Healthcare was down 25c to $24.26; Auckland International Airport shed 7c to $8.30; Chorus declined 7.5c to $8.405; and Delegat Group decreased 20c or 2.12 per cent to $9.25.

AFT Pharmaceuticals declined 11c or 3.01 per cent to $3.54, after confirming to shareholders at the annual meeting that 2024 financial year operating profit is expected to be $22m-$24m, with growth in the Australasian markets.

AFT is also expecting $6m licensing income on the launch of Maxigesic IV pain relief in the United States, following Food and Drug Administration approval but depending on how it undertakes the commercialisation. The guidance is subject to the decision on the commercialisation of Maxigesic Rapid in the United States.

T&G Global was unchanged at $2.04 after reporting an 18.6 per cent increase in revenue to $765.26m for the six months ending June. But the bottom line plunged to an operating loss of $11.62m from a profit of $15m for the same period last year because Cyclone Gabrielle and subdued consumer demand in some global markets.

The Apples business saw revenue increase 27 per cent to $508m compared with $401m last year, and T&G Fresh recorded a 12 per cent revenue gain to $208m, up from $185m.