Fletcher leads NZX 50 higher in Matariki-shortened week

New Zealand’s S&P/NZX 50 index rose in the shortened trading week, with Fletcher Building’s earnings upgrade and a revived appetite for Ebos Group powering the benchmark higher as the artificial intelligence trade runs out of steam and renewed fighting in the Middle East stoked oil prices.

Fletcher led the local market higher on Thursday, supported by heavyweights Infratil, Fisher & Paykel Healthcare and Auckland International Airport, in a mixed day across Asia as investors kept their nerve amid US President Donald Trump’s heightened rhetoric over Iran.

Freightways was among the day’s gainers as ANZ’s monthly traffic gauge and the BusinessNZ-BNZ manufacturing index were the latest indicators of the burgeoning economic recovery.

Meanwhile, interest rate sensitive companies such as commercial landlords and retirement village operators were mixed after yesterday’s rate hike by the Reserve Bank and the subsequent lifts in mortgage and term deposit rates by the retail banks.

Back on top

The NZX 50 rose 120.49 points, or 0.9%, to 13,785.67 – a new record close – with 22 stocks gaining, 22 declining and six unchanged. That took the weekly gain to 1.2% in the short week, with the local market closed on Friday for the Matariki public holiday.

Fletcher touched a four-month high as it posted the biggest gain across the week, up 6.8%, while Ebos advanced 5.6% and retailer Briscoe Group rose 4.3%.

The S&P/NZX 20 index futures contract for September climbed 0.9% to 7,781, with 50 lots traded for a value of $388,000, with the NZX 20 advancing 1.1% to 7,810.69.

Turnover across the main board was $137.4 million, of which F&P Healthcare accounted for $23.3 million as the medical device maker gained 1.1% to $40.25.

Stock markets across Asia were mixed as investors took higher oil prices in their stride, with Australia’s S&P/ASX 200 index down 0.5% and Hong Kong’s Hang Seng sliding 0.7%, while Japan’s Nikkei 225 jumped 1.6%. Brent crude oil futures were up 1.1% at US$78.87 a barrel at 5pm in Auckland.

“Considering what happened this morning, it’s been relatively calm in Asia,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “Markets don’t see this as lasting too long.”

Fletcher led the NZX 50 higher on Thursday, climbing 5.6% for the day to close at $3.61 after the building materials firm said earnings from continuing operations in the June year would be $400 million-to-$403 million, up from a mid-June forecast of $375 million-to-$380 million. The company said volumes improved across core manufacturing and distribution units, with some buying ahead of price hikes bringing forward a little activity that’s likely to smooth out in the next financial year.

“It’s a flagship day for them in recent times – they’ve upgraded,” McIntyre said.

Big drivers

Among other tailwinds for the index, Infratil gained 3.1% to $15.50, Port of Tauranga advanced 2.7% to $8.76 and Auckland Airport rose 1.5% to $8.85.

Freightways, often seen as a barometer for the economy, increased 2.1% to $14.04 after ANZ’s monthly traffic gauge showed a lift in heavy vehicle movements, while the BusinessNZ-BNZ manufacturing index reported a strong gain in industrial activity.

The kiwi dollar traded at 57.26 US cents at 5pm in Auckland from 57.14 cents yesterday.

KMD Brands posted the steepest decline on the day, falling 4% to $1.68, while SkyCity Entertainment Group dropped 3.6% to 53.5 cents and Vista Group International decreased 2.9% to $2.39.

Heartland Group Holdings slipped 1.6% to $1.21 after the financial services firm said a special meeting for shareholders to approve a proposed merger with TSB Bank would be delayed after the Toi Foundation miscalculated its consultation timeframe and would spend another 28 days taking in submissions before making a final decision in August. The parties were still targeting a December completion.

Air New Zealand was unchanged at 43.5 cents, sidestepping the declines among carriers across the region on the rising oil price. Across the Tasman, Qantas Airways was down 1.1% in late trading and Virgin Australia fell 1.8%.

Rate-sensitive companies were mixed after the Reserve Bank’s rate hike on Wednesday, which prompted retail banks to raise their mortgage and deposit rates. Goodman New Zealand rose 1.9% to $2.10, Precinct Properties NZ gained 1.4% to $1.055 and Summerset Group Holdings increased 0.8% to $8.75, while Ryman Healthcare declined 1.8% to $2.16, Kiwi Property Group fell 1.6% to 94 cents and Property for Industry slipped 0.4% to $2.41.

Outside the benchmark index, NZ Rural Land Co dropped 5.2% to 91 cents after the rural landlord said it was exposed to the collapsed Kiwi Crunch apple exporter and suspended earnings guidance.

Bremworth extended its decline, falling 8% to 69 cents after its major shareholders pre-emptively blocked a proposed sale of the carpetmaker’s assets, while Tāiko Critical Minerals gave back some of Wednesday’s gains as it fell 11% to 30 cents.

Reporting by Paul McBeth. Image from Curious News.