NZX50 driven higher by heavyweights; RBA rate cut hopes revived

New Zealand’s S&P/NZX 50 index was buoyed by the benchmark’s heavyweights, with Meridian Energy pacing gains among the power companies and Fisher & Paykel Healthcare advancing even as it shed rights to its upcoming dividend.

The dual-listed banks ANZ Group Holdings and Westpac Banking Corp both gained as softer growth than expected across the Tasman revived hopes the Reserve Bank of Australia will cut its target cash rate next year.

Meanwhile, the NZX welcomed a new listing in the form of Locate Technologies, which ditched the ASX over the Australian bourse’s rules preventing the software firm from running a Bitcoin treasury strategy.

And retailers Briscoe Group and KMD Brands were at the bottom of the benchmark ahead of the opening of the Ikea store in Auckland’s Sylvia Park on Thursday.

The Locate team celebrates the entry onto the NZX.

Two in a row

The NZX50 rose for a second day, up 79.77 points, or 0.6%, to 13,582.54, with 29 stocks gaining, 17 falling and four unchanged. Turnover was $117.4 million across the main board, of which F&P Healthcare accounted for $25.2m as the country’s biggest listed company rose 1%, or 38 cents, to $38.38, even as it shed rights to a 19 cent dividend.

Among other companies going ex-dividend today, Goodman Property Trust rose 1% to $1.99, Stride Property Group gained 0.7% to $1.42 and Radius Residential Care dipped 2.5%, or 1 cent, to 39 cents as it shed rights to a 1 cent dividend.

“It’s a pretty quiet, flow-driven day,” said Matt Goodson, managing director at Salt Funds Management, who noted heightened volatility in crypto currencies and the sharp rise in Japanese bonds had elevated uncertainty in markets.

It was a mixed day across Asia, with Australia’s S&P/ASX 200 index buoyed by weaker than expected gross domestic product figures fuelling hopes the Reserve Bank of Australia might cut the target cash rate next year. The ASX200 was up 0.1% in late trading, while Japan’s Nikkei 225 climbed 1.6% and Hong Kong’s Hang Seng dropped 1%.

S&P futures were pointing to a 0.2% gain when Wall Street opens.

Australia’s big four banks were stronger on the ASX, with dual-listed ANZ up 2% at $39.81 on the NZX and Westpac advancing 0.8% to $42.74. Heartland Group Holdings increased 0.9% to $1.09.

Fishing group Sanford led the NZX50 higher, up 2.1% at $7.28 after snapping a two-day decline. Other exporters were mixed, with Fonterra Shareholders’ Fund units fractionally down at $7.82 after dairy prices fell at the latest Global Dairy Trade Auction. The a2 Milk Co gained 1.4% to $10.80.

Scales Corp increased 0.8% to $6.85 after reaffirming annual guidance for this year and trimmed the outlook for next year.

Salt’s Goodson said the outlook was slightly below consensus, but investors weren’t overly concerned.

“It’s pretty clear both their key businesses are going well, and they’ve tended to be pretty conservative,” he said.

Ikea is coming

Briscoe Group posted the biggest decline on the NZX50, falling 2.9% to $5.02, while KMD Brands was down 1.8% at 27 cents. Outside the benchmark index, Warehouse Group decreased 0.7% to 77 cents. Retailers face increased competition in Auckland from tomorrow when the much-anticipated Ikea store opens.

Spark New Zealand was the most heavily traded stock with a volume of 1.6 million shares, as it fell 0.4% to $2.31.

Locate Technologies gained 6.7%, or 0.5 of a cent, to 8 cents in its debut on the NZX after the software company quit the ASX because the Australian exchange’s rules didn’t let it operate a Bitcoin treasury strategy.

Bitcoin was up 1.7% at US$92,686 at 5pm in Auckland, continuing its recovery after a sharp decline earlier this week. Smart’s Bitcoin exchange traded fund rose 6.8% to $3.565.

Meanwhile, NZX fell 1.3% to $1.50 after the stock market operator pace of trading volume growth continued to slow in November.

The kiwi dollar rose to 57.49 US cents at 5pm in Auckland from 57.27 cents yesterday.

Reporting by Paul McBeth.