NZ stocks recover to make small gain - Market close

The S&P/NZX 50 Index was up 28.18 points or 0.22%.

The New Zealand sharemarket had a small gain as it waited for a pivotal interest rate decision by the Reserve Bank next week.

The S&P/NZX 50 Index recovered from a morning fall and closed at 12,765.24, up 28.18 points or 0.22%. There were 35.03 million share transactions worth $148.06 million.

Greg Smith, head of retail with Devon Funds Management, said “globally we’ve seen more hawkish views on interest rate reductions as inflation has picked up. It’s taken a little bit of wind out of the sails of central banks’ monetary easing in the US, UK and Europe.

“Trump’s policies will also be inflationary, and the markets there have now pencilled in a 50% chance that the Federal Reserve will hold its official rate next month.”

Smith said there has been further commentary that the New Zealand economy is in a tough place – dairy is going well and that’s about it – and the recession is lasting longer than expected. This impacts government revenue.

“The market is indicating a 50-basis points cut in the Official Cash Rate (OCR) next week and there’s still an argument that the reduction should be higher. We’ve seen a boom, bust mentality and our economy is worse than the US and Australia. It is a waiting game for the market.”

Smith said the Reserve Bank has set a neutral rate of 3.75% and that’s 100 basis points above the present OCR. “If you think about it logically, the OCR should be a lot lower than where it is now – even at 4% or less.”

In the United States, tech darling Nvidia was down 2.53% to US$142.20 in after-hours trading after reporting better-than-expected third-quarter earnings – revenue of US$35.08 billion instead of the forecast of $33.16b and earnings per share of 81c instead of 75c.

At home, Chorus was up 14c to $8.96; ANZ Bank rose $1 or 2.87% to $35.80; Ryman Healthcare increased 15c or 3.09% to $5; and Gentrack bounced 61c or 5.95% to $10.87 after reaching an intraday low of $10.27.

Utilities investor Infratil, up 11c to $12.48, is considering a new offer of six-year, fixed-rate infrastructure bonds, maturing on December 13, 2030.

Turners Automotive gained 17c or 3.67% to $4.80; Napier Port collected 13c or 5.42% to $2.53; Serko was up 15c or 4% to $3.90; Steel & Tube increased 3c or 3.53% to 88c; and Tourism Holdings improved 5c or 2.65% to $1.94.

Other gainers were Scott Technology rising 11c or 4.27% to $2.20; Pacific Edge rebounding 1c or 7.58% to 14.2c; 2 Cheap Cars up 4.2c or 5.26% to 84c; and Winton Land increasing 6c or 3.06% to $2.02.

Manawa Energy was up 9c or 1.7% to $5.39; Michael Hill gained 2c or 3.13% to 66c; The Warehouse improved 3c or 3% to $1.02; Santana Minerals increased 5c or 8.4% to 64.5c; and TradeWindow was up 1.5c or 6.82% to 23.5c.

AFT Pharmaceuticals increased 11c or 4.33% to $2.65 after reporting a 4% increase in revenue to $86.71m and a net loss of $1.8m (2023 net profit of $3.3m) for the six months ending September.

AFT is forecasting full-year operating profit of $15m-$20m, and is focusing on $300m revenue by the end of the 2027 financial year.

Australia and New Zealand revenue was up 6% to $76.8m but international and Asia sales fell to $9.8m from $16.3m compared with the corresponding period last year because of demand disruptions. AFT expects a strong second-half recovery, helped by product launches.

Pole monitoring firm IkeGPS increased 4c or 6.9% to 62c after reporting revenue of $12.17m, up 15.7%, and a net loss of $6.98m for the six months ending September. The company said it closed $4m worth of contracts in October - $2.4m for subscription and $1.6m for transaction products.

Spark was down 2c to $3.01 on trade worth $25.95m; Fletcher declined 7c or 2.26% to $3.03; Seeka decreased 6c or 2.07% to $2.84; Colonial Motor shed 25c or 3.5% to $6.90; and Eroad was down 3c or 3.23% to 90c.

My Food Bag, declining 1.5c or 6.52% to 21.5c, reported half-year revenue of $82.21m, down 1.9%, and net profit of $2.95m, up 17.8%. It is paying an interim dividend of 0.0065c a share on December 16.

The meal kit company said while market conditions will remain challenging, it expects to trade broadly in line with the previous year’s second half.

Cooks Coffee, up 0.005c or 1.79% to 28.5c, reported a 26.4% rise in revenue to $2.58m and net profit of $534,000, a turnaround from a loss of $32,000, for the six months ending September. The 83 UK and Ireland stores had total sales of $33.8m, up 26.8% for the half year.