Channel near 7-yr high, leads NZX50 higher

Channel Infrastructure rose near a seven-year high as the import terminal operator led the S&P/NZX 50 index higher in unusually heavy trading, and after a string broker upgrades in recent months.

Summerset Group Holdings and Ryman Healthcare both gained despite Real Estate Institute of New Zealand figures showing the housing market was fairly moribund in August.

And Investore Property advanced after setting the interest rate range on an upcoming convertible note, which will help fund its acquisition of the Silverdale Centre north of Auckland from its manager, Stride Property Group.

Meanwhile, commerce minister Scott Simpson and economic growth minister Nicola Willis outlined the latest tweaks to competition law and an overhaul of the Commerce Commission to speed decisions by the antitrust regulator.

Fed in view

The NZX50 rose 26.58 points, or 0.2%, to 13,234.89, with 26 stocks gaining, 19 declining and five unchanged. Turnover across the main board was $145.8 million.

Channel Infrastructure led the benchmark index higher, climbing 4.7% to $2.45 – its highest level since November 2018 on an adjusted basis – on an unusually large volume of 4.4 million shares, of which almost 1.1 million changed hands in a single trade at $2.43 a share.

“Channel has been having a nice wee run,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “It’s a yield stock and it’s been upgraded by a number of brokers.”

New Zealand’s benchmark index is a gross measure, meaning it includes dividends, rather than the typical capital measure in other jurisdictions.

That means when companies shed rights to their dividend payments and fall by an equivalent amount - all things being equal – it weighs on the index.

McIntyre noted that the index has held up well despite the gross nature, ahead of the all-important Federal Reserve policy decision on Wednesday in the US.

Traders have all but priced in a rate cut by the Fed, with central banks in England, Canada and Japan among the glut of monetary authorities reviewing monetary policy this week.

The kiwi dollar traded at 59.61 US cents at 5pm in Auckland from 59.63 cents yesterday.

Bricks and mortar

Retirement village operators, which are typically linked to the ebbs and flows of the property market given their incoming occupants usually have to sell a house before buying occupation rights, were both up today despite Real Estate Institute of New Zealand figures continuing the trend of softer sales in August.

Summerset rose 2.4% to $11.03 while Ryman gained 1.6% to $2.51. Oceania Healthcare slipped 0.7% to 68.5 cents after outlining its pathway to boost free cash flow over the next five years.

Yen Nguyen, an economist at ASB Bank, said the REINZ figures indicate the housing market remains sluggish, reflecting the protracted weakness of the broader economy.

“With a further 50 basis points of OCR (official cash rate) cuts expected from the Reserve Bank by year end, we expect an increase in market activity in the last quarter of 2025,” Nguyen said in a note. “However, any significant recovery in house prices is unlikely to occur before 2026.”

Retailer Briscoe Group posted the biggest decline on the NZX50, falling 8.2% to $4.93 in very light trading for the tightly-held stock.

Commercial landlords were broadly weaker, with Vital Healthcare Property Trust declining 1.8% to $2.14, Kiwi Property Group slipping 1.4% to $1.035 and Precinct Properties NZ down 1.2% at $1.27.

Investore Property bucked the trend, gaining 1.8% to $1.16 after setting an indicative interest rate margin in its upcoming $65 million sale of convertible notes to help fund the acquisition of the Silverdale Centre north of Auckland. The final price will be set in a bookbuild, but the indicative margin range is 3-to-3.5 percentage points above the four-year swap rate – currently at 3.12% – and a minimum of 6.25%.

Contact Energy rose 1.1% to $9.20 after reiterating its view that more investment in renewable energy is needed to shore up national security of electricity supply, with consenting still a major issue.

Outside the benchmark index, Metro Performance Glass rose 2.5%, or 0.1 of a cent, to 4.1 cents after the company said its rights offering to shareholders was oversubscribed, meaning it raised the maximum amount of $23.9 million.

And commerce minister Scott Simpson and economic growth minister Nicola Willis announced changes to competition law and a restructuring of the Commerce Commission which, among other things, aim to speed up decisions and provide greater flexibility for potential acquirers to voluntarily offer undertakings to allay anticompetitive concerns.

Reporting by Paul McBeth. Image from Curious News.