Property stocks brace for Precinct’s index reweighting.
Scales' apple production.
New Zealand’s S&P/NZX 50 index snapped a three-day decline, joining a rally across Asia as investors warmed to the prospect of lower US interest rates after Federal Reserve chair Jerome Powell’s latest speech was taken as a signal that the central bank will keep cutting, amid renewed tensions between the US and China.
Gold prices remained elevated, buoying mining stocks in Australia while dual-listed Santana Minerals closed at a record since taking up a secondary listing on the NZX and boding well for incoming junior miner Uvre when it starts trading on this side of the Tasman on Thursday.
Apple exporter Scales Corp paced gains on the local market after raising its earnings guidance in the latest sign of a healthy primary sector.
Meanwhile, property stocks continued their selloff after Precinct Properties NZ’s $310 million capital raising, with investors preparing for the upcoming index reweighting.
The NZX50 rose 30.41 points, or 0.2%, to 13,307.4, with 29 stocks gaining, 12 declining and nine unchanged. Turnover across the main board was $137.8 million, of which Fisher & Paykel Healthcare accounted for $13.1 million, ending the day unchanged at $35.75.
Stocks across Asia followed Wall Street higher after US Federal Reserve chair Jerome Powell said the central bank’s close to finishing its quantitative tightening programme as it sells Treasuries and shrinks the size of its balance sheet, while noting the US jobs market remained soft.
That reaffirmed expectations the Fed will keep lowering the federal funds rate as US and China tensions start to ratchet up again, and the yield on New Zealand’s 10-year government bond fell 6 basis points to 4.04% at 5pm in Auckland, while gold futures were up 1% at US$4,205 an ounce. The kiwi dollar traded at 57.21 US cents from 57.11 cents yesterday.
The rally in gold prices spurred gains among mining stocks on Australia’s S&P/ASX 200 index, which was up 0.8% in late trading, while the major banks also advanced following stronger earnings results from the likes of Wells Fargo, JPMorgan Chase, Goldman Sachs and Citibank in the US.
Dual-listed Santana Minerals climbed 5.8% to a record close on the NZX, ending the day at $1.005, while junior miner Uvre was up 6.7% at 24 Australian cents on the ASX ahead of taking up a secondary listing in New Zealand on Thursday. Stock market operator NZX rose 1.3% to $1.51.
Scales Corp was among the day’s leaders on the NZX, up 4.2% at $5.94 after raising its forecast for annual earnings to be between $54 million and $59 million in the calendar year from a previous range of $51 million and $56 million.
“The market was already above their guidance range,” said Matt Goodson, a managing director at Salt Funds Management. “They’ve historically been quite conservative.”
KMD Brands led the market higher, rising 4.9% to 32 cents, while Vector advanced 4% to $4.99 and Turners Automotive Group gained 3.2% to $7.45.
Auckland International Airport increased 1% to $8.05 after its latest traffic update showed a 3% increase in international passenger numbers in September from a year earlier, while domestic passenger movements climbed 7%. Air New Zealand was unchanged at 59.5 cents.
Channel Infrastructure advanced 2.3% to $2.70 after reporting a 5.2% increase in September quarter fuel throughput at its import terminal.
Vital Healthcare Property Trust posted the biggest decline on the benchmark index, falling 3.1% to $2.16 after announcing several asset sales, which it will use to repay debt.
Precinct Properties NZ slipped 0.4% to $1.23 as it opened a $25 million share purchase plan, the retail component of a $310 million capital raising at $1.23 a share.
Salt’s Goodson said Precinct’s capital raising was weighing more broadly on property stocks, with investors selling other firms to participate in the $285 million placement and index reweightings set to have a second-round impact.
Stride Property Group declined 2.4% to $1.405, Argosy Property declined 2.4% to $1.23, Investore Property decreased 0.8% to $1.22 and Kiwi Property Group was down 0.5% at $1.055.
Spark New Zealand was the most heavily traded stock on a volume of 3.1 million shares, ending the day unchanged at $2.40.
Restaurant Brands NZ rose 1.6% to $5.03 after cornerstone shareholder Finaccess formally lodged its $5.05 per share takeover offer for the quarter of the company it doesn’t already own, while Comvita was unchanged at 76 cents after its board recommended the 80 cents per share scheme when it fell within the independent adviser’s valuation range.
Bremworth was unchanged at 86 cents after saying the Australian Competition and Consumer Commission won’t hold a public review of Mohawk Industries’ proposed scheme to buy the carpetmaker.
Black Pearl Group gained 0.8% to $1.22 after reporting a 39% quarterly increase in annualised recurring revenue of $19.5 million.
Reporting by Paul McBeth.
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