NZX 50 gains as business confidence remains buoyant

New Zealand’s S&P/NZX 50 index gained as ANZ’s monthly business confidence survey showed firms continued to weather the elevated fuel prices, with companies linked to the economy such as Freightways and Spark New Zealand among the day’s leaders.

Stock markets across Asia were mixed as results from Samsung Electronics and Alphabet slowed the recent momentum in the artificial intelligence trade, and as investors weighed the Federal Reserve’s latest pause ahead of other central bank meetings.

Port of Tauranga was unchanged after the maritime hub told shareholders a drop in log exports weighed on volumes in the September quarter.

And Serko extended its march higher after signalling upgraded guidance was on the cards when it reports its first-half result next month, with the travel software developer on track for its best week in almost two years.

Not so bad

The NZX 50 increased 18.84 points, or 0.1%, to 13,710.17, with 24 stocks gaining, 16 declining and 10 unchanged. The S&P/NZX 20 index advanced 0.1% to 7,495.9, while the futures contract was untraded.

Turnover across the main board was $104.6 million, of which Fisher & Paykel Healthcare accounted for $20.8 million as the country’s biggest listed company declined 0.4% to $47.38, one of the bigger headwinds for the local market.

Stocks across Asia were mixed as investors digested the Fed’s pause ahead of meetings by the European Central Bank and Bank of Japan, and amid weaker oil prices, with Brent crude oil futures down 1.1% at US$114.10 a barrel at 5pm in Auckland.

Australia’s S&P/ASX 200 index gained 0.4% in late trading while Hong Kong’s Hang Seng was up 0.1% and Japan’s Nikkei 225 index increased 0.3%. South Korea’s Kospi dropped 2.3% as weaker-than-expected earnings from Alphabet and Samsung Electronics’ lack of returns to shareholders weighed on tech-heavy bourses.

The kiwi dollar steadied after its slide on the Reserve Bank’s surprise pause yesterday, trading at 56.21 US cents at 5pm from 56.14 cents yesterday.

Business confidence remained high in ANZ’s monthly business outlook survey, with a net 52.5% of respondents expecting the economy to improve. Still, they were slightly less upbeat about their own activity, and a growing number of businesses expect to raise their prices.

“The most notable development in the last month has been the resurgence in fuel prices, with petrol prices at the pump breaking above the previous record highs seen in the initial wake of the Iran conflict,” Westpac NZ senior economist Michael Gordon said in a note. “But the general steadiness in the activity measures suggests that businesses are simply learning to live with higher fuel costs.”

Freightways, often seen as a bellwether for the economy, gained 3.3% to $12.73 after the courier operator said first-quarter profit and revenue posted double-digit gains, while Spark gained 2.3% to $1.98.

Interest rate-sensitive commercial landlords were broadly stronger as the yield on New Zealand’s 10-year government bond fell 5 basis points to 4.88%. Argosy Property rose 2% to $1.02, Precinct Properties NZ was up 1.1% at 94 cents and Stride Property increased 1% to $1.04.

Auckland International Airport was one of the larger tailwinds for the local market, gaining 1.1% to $8.43. The country’s main gateway said it was considering a five-year bond offering for institutional and retail investors, and a three-year floating-rate bond sale to wholesale investors.

Rebound trade

Serko rose for a third day, up 4.4% at $1.18 in the biggest gain for the NZX 50. The travel software developer has gained almost 17% so far this week, spurred by its trading update that it anticipated making a modest upgrade to income guidance when it reports its first-half result.

Stock market operator NZX increased 0.7% to $1.49 after the company said September quarter operating revenue was up 14%, largely from its funds management and wealth technologies arms.

Ryman Healthcare posted the biggest decline on the NZX 50, down 2.5% at $1.74, while Hallenstein Glasson Holdings slipped 2% to $14.50 and Briscoe Group fell 1.9% to $4.12.

Port of Tauranga was unchanged at $8.30 after the country’s biggest port said first-quarter trading volumes shrank 4.8%, with a decline in log exports the major drag. The port operator reaffirmed annual earnings guidance.

Outside the benchmark index, AoFrio climbed 6.3%, or 0.3 of a cent, to 5.1 cents, even as it reported a 17% decline in September quarter revenue.

Move Logistics fell 2.2% to 17.6 cents as the trucking company said there were signs of improvement in the economy, but that the recovery remained gradual and uneven.

Eroad slipped 0.5% to 97.5 cents as a notice to the stock exchange showed Ampfield lifted its stake in the transport software and hardware firm, while WasteCo was unchanged at 0.8 cents after securing a $3 million investment in shares and a loan from a new Singaporean investor.

And Me Today slid 6.7% to 7 cents after raising $2.3 million from warrant holders exercising their securities, and saying first-half revenue was expected to climb by more than a third, helping narrow its operating loss.

Reporting by Paul McBeth. Image from Curious News.