NZX 50 climbs 1.6% in Sept quarter as Hallenstein Glasson shines

New Zealand’s S&P/NZX 50 rallied in the final day of September, with softer-than-expected inflation across the Tasman prompting traders to pare back their bets that the Reserve Bank of Australia will hike its cash rate again next month.

The local benchmark rose for a second quarter, with Hallenstein Glasson Holdings surging higher as the retailer navigated the protracted downturn, while Ryman Healthcare was the worst performer through the three-month period, with rising bond yields and a subdued housing market weighing on retirement village operators.

SkyCity Entertainment Group rallied on Wednesday, hiring advisers in a sign that it’s taking the interest from potential suitors seriously, while Auckland International Airport advanced in heavy trading as the gateway’s weighting in a global infrastructure index was lifted.

And Warehouse Group rose for a fourth day after reporting a return to profit, as the retailer fattened its margins even as sales stalled for the year.

Spring tide

The NZX 50 climbed 150.76 points, or 1.1%, to 13,834.39 on Wednesday, taking its quarterly gain to 1.6%. The index dipped 0.6% in September, snapping four months of gains.

Hallenstein Glasson was the strongest performer in the quarter, jumping 48% and touching new all-time highs, after reporting a strong annual result, while Fonterra Shareholders’ Fund units and SkyCity both climbed 24%.

Ryman Healthcare dropped 18% and Summerset Group Holdings sank 14%, with the retirement village sector under pressure amid rising interest rates and a soft housing market. Broadband network operator Chorus dropped 15% in the quarter.

In Wednesday trading, there were 34 gainers on the NZX 50, while eight stocks declined and eight were unchanged. The S&P/NZX 20 index futures contract for December increased 0.3% to 7,600, with 51 lots traded for a value of $388,000, while the NZX 20 climbed 0.9% to 7,587.84.

The end of the quarter spurred heavy trading on Wednesday, with turnover of $338.4 million across the main board, of which Auckland Airport accounted for $131 million, with 15.7 million shares traded, as it rose 0.4% to $8.38. The gateway was upweighted in the S&P Global infrastructure index.

Fisher & Paykel Healthcare rose 1% to $45.99 on a turnover of $45 million, while Infratil advanced 1.9% to $14.16, with $18.8 million of stock traded.

Stock markets across Asia were generally stronger ahead of US inflation data, as investors mull the selloff in bonds, which have pushed up 30-year US treasuries to their highest level since 2002. Australia’s S&P/ASX 200 index climbed 0.9% in late trading after Bureau of Statistics figures showed the pace of inflation accelerated at a slower pace than economists predicted. The kiwi dollar rose to 80.99 Australian cents at 5pm in Auckland from 80.77 cents yesterday.

A new season

New Zealand’s market joined its Australian counterpart higher, with heavy trading as investors rebalanced their portfolios to mark the end of the quarter.

“There had been expectations the RBA would probably hike again in November – that’s been thrown out the window now,” said Matt Goodson, managing director at Salt Funds Management. “That spilled across the Ditch, and we’ve picked up off the back of that.”

SkyCity climbed 5.4% to 68 cents after the casino operator hired UBS and Chapman Tripp to help it engage with two potential suitors, and said credible parties had shown an interest in buying its Adelaide site.

Air New Zealand posted the biggest gain on the day, up 6.5% at 41 cents, while Hallenstein Glasson extended its rally up 5.4% to $14.75 and Vista Group International advanced 4.1% to $2.80.

Meridian Energy increased 1.3% to $5.49 after the country’s biggest electricity generator said it would spend up to $510 million over the next decade to upgrade its Waitaki power station, increasing the site’s capacity by 15 megawatts to 120 MW.

Tourism Holdings posted the biggest decline on the day, falling 1% to $2.90, while Sky Network Television slipped 0.9% to $3.47 and Napier Port Holdings decreased 0.8% to $3.70.

Outside the benchmark index, Warehouse rose 0.8% to 63.5 cents after the retailer returned to profit, with fatter gross margins and a reduced cost of doing business offsetting a 3% dip in annual sales.

The kiwi dollar fell to 56.44 US cents at 5pm from 56.63 cents yesterday after ANZ’s business outlook survey showed firms’ optimism about a turn in the economy eased this month, with responses getting more pessimistic later in the month as oil prices spiked.

Satish Ranchhod, a senior economist at Westpac NZ, said the survey showed fairly resilient activity and contained inflation pressures.

“That very modest response to the fuel spike will help to calm nerves at the RBNZ ahead of October’s policy review,” Ranchhod said in a note. “We’ll be watching to see if that sort of message is reflected in next week’s closely watched quarterly survey of business opinion (out 6 October) and in the upcoming inflation reports (16 and 22 October).”

Reporting by Paul McBeth. Image from Curious News.