NZX 50 gains for 4th month as Gentrack surges out of the doldrums

New Zealand’s S&P/NZX 50 index rose for a fourth month in August, with utilities software developer Gentrack surging out of the doldrums and Fisher & Paykel Healthcare notching up its best month in two years.

The NZX 50 rallied on Monday in heavy trading, with Auckland International Airport climbing in its busiest day since May as institutional investors rebalanced their portfolios for the end of the month.

Stock markets across Asia were more muted on Monday, with oil prices climbing after the US and Iran exchanged attacks for the first time in a month, while investors prepare for higher interest rates after Federal Reserve chair Kevin Warsh’s speech at the annual central bankers’ symposium in Wyoming last week.

And trading of Winton Land shares was suspended after the property developer’s boardroom exodus, while Michael Hill International climbed to a two-month high after the jewellery chain resumed dividends after reporting sales growth across all its markets.

Brushing off the winter chill

The NZX 50 climbed 149.12 points, or 1.1%, to 13,917.3 on Monday, taking its monthly gain to 1.6%.

Gentrack posted the biggest monthly gain, up 31% after the utilities software developer rejigged its boardroom to add two European-based directors in the middle of August. Sky Network Television and Hallenstein Glasson Holdings both jumped 12%, while F&P Healthcare’s 9.1% monthly gain was the medical device maker’s biggest since August 2024.

Meanwhile, Westpac Banking Corp posted the steepest decline in the month, falling 8.1%, while KMD Brands dropped 6.6% and Air New Zealand sank 6%.

“If you look at earnings, which is the ultimate driver of where a share price goes, there were more beats than misses and the outlooks were correspondingly more positive than what they were six months ago,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.

Within the index on Monday, 31 stocks gained, 17 declined and two were unchanged. The S&P/NZX 20 index futures contract for September increased 0.8% to 7,712 with five lots traded for a value of $39,000, while the NZX 20 jumped 1.2% to 7,785.92.

Turnover across the main board was $364 million, of which Auckland Airport accounted for $103 million as it rose 3.4% to $8.85.

“There’s a lot of rebalancing going on here, particularly with Auckland Airport,” McIntyre said. “Auckland Airport does have a special place in New Zealand and Australian share markets as the only listed airport in the southern hemisphere.”

Meridian Energy led the NZX 50 higher on Monday, up 5.3% at $5.53 on a turnover of $61.1 million, while F&P Healthcare gained 1.4% to $44.40 on a turnover of $45.8 million, Infratil increased 0.9% to $14.42 with almost $31 million of shares traded, and Contact Energy nudged up 0.2% to $8.75 on a value of $22.2 million.

New troubles

New Zealand’s NZX 50 outperformed most of Asia, with Japan’s Nikkei 225 index down 0.4% in late trading, Hong Kong’s Hang Seng sliding 0.6% and Australia’s S&P/ASX 200 index dipping 0.3%. Brent crude oil futures climbed 2.4% to US$90.19 a barrel after the US and Iran exchanged fire in the Middle East after a lull in the conflict over the past month.

Meanwhile, the kiwi dollar fell to 59.20 US cents at 5pm in Auckland from 59.58 cents last week as the greenback was broadly stronger on mounting expectations that the Fed will raise its benchmark rate in September, after chair Warsh said the central bank had more work to do on the inflation front.

The ANZ business outlook today showed firms’ optimism about the outlook for the economy and their own activity dimmed in August, although their experienced activity picked up.

Michael Gordon, a senior economist at Westpac NZ, said renewed hostilities in the Middle East had a relatively muted impact on fuel prices, and firms were learning to live in the new environment.

“Firms appear to have weathered the disruptions stemming from the Iran conflict reasonably well, though not wholly unscathed,” Gordon said in a note. “Meanwhile, although inflation pressures have been more contained than initially feared, they were already on the uncomfortably high side even before the conflict began.”

New Zealand’s Reserve Bank is expected to hike the official cash rate a quarter-point to 2.75% when the monetary policy committee reviews the benchmark on Wednesday.

Vulcan Steel posted the steepest decline on the NZX 50 on Monday, falling 3.2% to $6.44, while Briscoe Group declined 2.2% to $4.40 and Tourism Holdings slipped 2.2% to $2.70.

Outside the benchmark, Michael Hill surged 12% to 46.5 cents after the retailer’s board declared a 2 cents per share final dividend after the company grew sales across all regions and lifted annual earnings 57%.

Shares of Winton were suspended on both sides of the Tasman – last trading at a record low $1.05 – while Savor was unchanged at 17.1 cents after the Auckland hospitality operator’s board said it recommended Garry Moore as a new director at the upcoming annual meeting. Moore was nominated by the Cushing family’s H&G, which owns about 16% of the company.

Bremworth was unchanged at 71 cents after the carpetmaker reported a narrower annual pre-tax loss of $9.5 million, with wider gross margins and a 22% lift in annual revenue to $106.6 million. The company had cash of $22 million at the June 30 balance date.

Reporting by Paul McBeth. Image from Curious News.