Turnover across the main board was $141.4 million, of which Summerset accounted for $12.7 million.
New Zealand’s S&P/NZX 50 index rallied with retirement village operators such as Summerset Group Holdings and Ryman Healthcare buoyed by the prospect of lower interest rates after a subdued business confidence survey from the New Zealand Institute of Economic Research stoked hopes among investors for a half-percentage point rate cut by the Reserve Bank on Wednesday.
Meanwhile, Infratil dipped as the latest valuation for its marquee CDC data centres unit nudged higher, while the latest deal from OpenAI to secure chips from Advanced Micro Devices fed into concerns that the artificial intelligence sector is becoming more circular without delivering actual profits.
Stock markets across Asia were mixed, as Japan’s Nikkei 225 continued its rally on the prospect some extra juice for the economy under the presumptive prime minister Sanae Takaichi, while Australia’s S&P/ASX 200 index was caught in a broad sell-off touching almost every sector.
And ASB Bank has agreed to pay $135.6 million to settle its four-year tussle with thousands of customers who took a class action against the lender, claiming it breached consumer law disclosure obligations. A separate action against ANZ Bank New Zealand is still live.
The NZX50 rose 42.05 points, or 0.3%, to 13,531.29, closing in on the 13,643.78 peak it hit in January 2021. Within the index, 26 stocks gained, 17 fell and seven were unchanged. Turnover across the main board was $141.4 million, of which Summerset accounted for $12.7 million as it rose 1.2% to $11.24, joining retirement village operators and property companies buoyed by the prospect of lower interest rates.
The NZIER’s quarterly survey of business opinion showed fewer firms expect the economy to improve over the coming year, with dwindling intentions to invest and take on new staff and more companies than not experiencing a decline in their own activity through the September quarter.
“There was a fairly sombre quarterly survey of business opinion out today,” said Matt Goodson, managing director at Salt Funds Management. “That’s cemented the expectations, or hopes, for a 50 basis point move by the RBNZ as opposed to 25.”
The Reserve Bank is expected to cut the official cash rate a quarter-point to 2.75% when it reviews policy on Wednesday, although markets have been pricing in an outside chance of a 50 basis point cut.
The kiwi dollar traded at 58.31 US cents at 5pm in Auckland from 58.40 cents at 7am and 58.35 cents yesterday, while two-year swap rates slipped 2 basis points to 2.62%.
Salt’s Goodson said the prospect of a bigger rate flowed through to companies more exposed to interest rates, such as the retirement village operators and commercial landlords.
Ryman Healthcare led the benchmark index, climbing 6.7% to $2.88 as it touched a six-month high $2.90 during the session, while Oceania Healthcare rose 2.1% to 72 cents. Kiwi Property Group advanced 1.8% to $1.115, and Goodman Property Trust increased 1.4% to $2.26.
Separately, Summerset reported a record quarter for sales of occupation rights, with gains in both new sales and resales. The company affirmed its forecast to deliver 650-to-730 new units by the end of the year.
Tech stocks were mixed as Serko rose 3.4% to $2.75, while Gentrack posted the biggest decline on the benchmark as it fell 3% to $9.45 and Vista Group International slid 1% to $3.03. Outside the NZX50, Scott Technology climbed 8.3% to $2.49 and Eroad gained 7.5% to $2.73, while Black Pearl Group fell 2.6% to $1.115 after completing an oversubscribed $15 million capital raising at 95 cents a share.
Infratil dipped 0.8% to $12.49 after the infrastructure investor lifted the valuation of its CDC data centre business in the September quarter, saying its cost of equity nudged higher from a new valuer’s approach to the business. Components maker Rakon declined 2.3% to 84 cents.
Spark New Zealand was the most heavily traded stock on a volume of 3.7 million as it rose 0.9% to $2.37.
Stock markets were mixed across Asia, with Australia’s ASX200 down 0.3% in late trading with 10 of the index’s 11 sectors in the red, while mining companies were buoyed as the gold price crossed US$4,000 an ounce for the first time.
Japan’s Nikkei was up 0.8%, carrying on its rally with the new Liberal Democratic Party leader Sanae Takaichi seen as favouring greater monetary and fiscal stimulus, while Hong Kong’s Hang Seng fell 0.7%, while Chinese markets remained closed for the Golden Week holiday.
And ASB Bank settled its four-year class action over claims of disclosure failures under consumer lending laws, agreeing to pay $135.6 million without admitting liability or wrongdoing and describing the deal as a pragmatic way to end it. ANZ Bank New Zealand is continuing to defend a similar class action.
Reporting by Paul McBeth.
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