“Some commentators offshore are saying we are going too hard on inflation, and time will tell whether they are right or wrong,” Sullivan said.
“It’s the third quarter in a row that inflation hasn’t risen, and we are turning the corner. I believe you can be cautiously optimistic about the market as you are seeing bright spots. Investors are looking at the beaten-up stocks and their fundamental values.”
Driven by lower imported costs, particularly fuel, annual inflation has fallen to 6.7 per cent following the release of the March consumer price index (CPI) – down from 7.2 per cent in the December quarter. But the sticky non-tradeable inflation accelerated to 6.8 per cent.
ANZ Research said “while markets may be chomping at the bit to price in (interest rate) cuts from late 2023/early 2024, we’re not convinced the Reserve Bank monetary policy committee will be eager to deliver them any time soon – inflation went their way today, but the war on high and sticky inflation is far from won.”
The NZ dollar was weaker, trading at US61.54c (down 0.73 per cent) against the American greenback and A72c against the Australian.
Market leader Fisher & Paykel Healthcare was down 20c to $26.75; Ebos Group declined 67c to $44.47; Infratil shed 16.5c to $9.215; Mainfreight decreased $1.18 to $70.72; and a2 Milk was down 9c to $6.39.
Move Logistics fell 9c or 10.59 per cent to 76c; Synlait Milk was down 4c or 1.83 per cent to $2.14; and Bremworth shed 1.5c or 4.23 per cent to 34c.
Warehouse Group decreased 8c or 4.32 per cent to $1.77. The Warehouse, which listed in 1994, is now trading at the same level as 1996, and over the past two decades its share price has fallen 68 per cent, while rival Briscoe Group has increased 240 per cent in the same period.
In the retail sector, Briscoe was down 3c to $4.71, Hallenstein Glasson declined 9c to $5.30 and KMD Brands was up 2c or 1.82 per cent to $1.12.
Michael Hill rose 4c or 3.81 per cent to $1.09 after announcing a deal to purchase Bevilles, an Australian family-owned jewellery and watch retailer, for $45m. Bevilles is expected to generate $60m-$65m in sales and operating earnings (ebitda) of $7.5m-$8.5m in the 2023 financial year.
Bevilles, which restructured in 2014, has 26 stores in Victoria, New South Wales and South Australia compared with Michael Hill’s 148 across the country. Michael Hill told the market it could operate 80-100 stores by the 2028 financial year.
Freightways was up 20c or 2.18 per cent to $9.39; Restaurant Brands bounced back 32c or 5 per cent to $6.72; Green Cross Health gained 5c or 3.85 per cent to $1.35; and Vulcan Steel added 43c or 5.17 per cent to $8.75.
Other gainers were Winton Land up 5c or 2.44 per cent to $2.10; AFT Pharmaceuticals increasing 10c or 2.9 per cent to $3.55; Scales Corp improving 8c or 2.54 per cent to $3.23; and Delegat Group adding 13c to $8.55.
Leading banks ANZ increased 90c or 3.46 per cent to $26.90, and Westpac gained 69c or 2.88 per cent to $24.69.
Mobile customer engagement company Task Group surged 7c or 22.58 per cent to 38c after upgrading its guidance to $65m for revenue and $12m for operating earnings (ebitda) – compared with the previous $59m-$62m and $8.5m-$9.5m respectively. The group’s cash has grown from $12.2m a year ago to $28.4m.
Telecommunications provider Chorus gained a further 4.5c to $8.815, still shy of its intraday peak of $9.39 achieved on September 17, 2020. Chorus’ share buy-back programme first started on February 25 last year and recommenced in February this year.
Chorus said over the 14 months its on-market purchases have represented 10.8 per cent of the combined NZX and ASX daily stock volume. It has a broker’s agreement that the buy-back programme does not influence the share price, with the number of shares bought not to exceed 30 per cent of the volume traded over the previous five business days.
