Infratil and TECT get their own circular deal going on.
New Zealand’s accelerating pace of inflation isn’t seen as staying the hand of the Reserve Bank when it reviews the benchmark rate at the end of next month, as investors turn their eye to a slew of annual meetings for clues as to when the economy will shake off its protracted winter blues.
The benchmark S&P/NZX 50 index joined a rally across Asia as Liberal Democratic Party leader Sanae Takaichi looks set to secure Japan’s prime ministership and as China’s slowing pace of economic growth beat expectations while the Chinese Communist Party’s central committee gathers for the next five-year plan.
Contact Energy was among the local gainers as Infratil beefed up its stake in the electricity generator-retailer, buying TECT Holdings’ shares in a cash and scrip deal.
And ANZ Bank New Zealand is back under in the gun in the disclosure class action backed by LPF after Parliament’s finance and expenditure select committee recommended dropping the inclusion of the live litigation from a retrospective re-writing of consumer lending law.
The kiwi dollar traded at 57.37 US cents 5pm in Auckland from 57.21 cents at 7am and 57.30 cents yesterday after Statistics NZ figures showed the pace of annual inflation accelerated to 3% in the September quarter from a 2.7% rate in June, largely in line with what economists had expected.
“The headline will have you thinking we’re going in the wrong direction now we’re just within the target band, but the general thinking is when you look under the hood there are areas of softness,” said Mark Lister, investment director at Craigs Investment Partners. “No-one thinks this will dissuade the Reserve Bank from another cut at the end of November.”
The NZX50 climbed 55.75 points, or 0.4%, to 13,344.96, with 24 stocks gaining, 22 declining, and four unchanged. Turnover across the main board was $128.6 million, of which Auckland International Airport accounted for $21.3 million as it rose 1% to $8.12.
Courier company Freightways, often seen as a bellwether of the economy, rose 0.8% to $13.26, while stock market operator NZX gained 2.7% to $1.545 and retirement village operator Ryman Healthcare advanced 2.2% to $2.80. Gentrack led the market higher, up 3.6% at $9.43.
Annual meetings from Fletcher Building, Steel & Tube Holdings, Auckland Airport and Tourism Holdings may provide some insights into how the economy is tracking, Craigs’ Lister said.
Fletcher slipped 0.6% to $3.13, while Steel & Tube declined 0.7% to 70 cents and Tourism Holdings increased 0.4% to $2.56.
Commercial landlords, which are typically sensitive to interest rate movements, were mixed as Precinct Properties NZ advanced 1.3% to $1.25 and Goodman Property Group gained 0.9% to $2.14, while Kiwi Property Group slipped 0.9% to $1.055 and Argosy Property declined 1.2% to $1.25.
Investore Property posted the day’s biggest decline, falling 3.6% to $1.22 after shareholders voted in favour of the company’s $114 million acquisition of the Silverdale Centre shopping mall north of Auckland and convertible note issue to help fund the deal, along with a broader remit for manager Stride Property Group, which fell 3.4% to $1.42.
The local market joined gains across Asia as Japan’s Nikkei 225 surged 2.8% in late trading after LDP leader Sanae Takaichi looks set to become the nation’s first female prime minister after securing the support of the Japan Innovation Party.
Hong Kong’s Hang Seng jumped 2.4% as data showed China’s economic growth slowed to 4.8% as the nation’s leaders prepare for the fourth plenum to map out the next five years for the world’s second biggest economy.
The a2 Milk Co, which counts China as its biggest market, rose 0.5% to $10.49 while Fonterra Shareholders’ Fund units decreased 0.1% to $8.29 and Sanford was unchanged at $5.70.
Infratil declined 0.5% to $12.37 after the infrastructure investor lifted its stake of Contact Energy to more than 14%, buying TECT Holding’s 4.9% holding at $8.95 a share, of which $218.8 million was in new Infratil shares at $12.43 apiece. Contact rose 1.1% to $9.15, joining gains across the power companies as Mercury NZ increased 2.5% to $6.65 and Meridian Energy advanced 0.2% to $5.81.
Genesis Energy fell 0.4% to $2.47.
Outside the benchmark index, NZME decreased 0.5% to $1.045 after tapping Warehouse Group exec Jo Hempstead as its new chief financial officer, starting next year.
And ANZ Bank New Zealand won’t face a more lenient regime in its defence of a class suit backed by litigation funder LPF over claims of disclosure failings. Parliament’s finance and expenditure select committee reported back with an amendment to carve out live litigation from the retrospective elements of the latest re-write of consumer lending law. The proposed changes give a judge scope in ordering a penalty of a breach.
Reporting by Paul McBeth.
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