NZX 50 gains this week as Mainfreight, Scales navigate Middle East tensions

New Zealand’s S&P/NZX 50 index was back in the green this week as global logistics firm Mainfreight and apple exporter Scales Corp navigated their way through the heightened Middle East tensions that slowly subsided as the US and Iran got back around the negotiating table.

The local market ended Friday back at a four-month high in relatively light trading as investors got away from their desks early ahead of school holidays, with Fisher & Paykel Healthcare and Ebos Group among the big drivers for the daily gains.

Retailers were broadly stronger after the latest ANZ-Roy Morgan consumer confidence survey showed households casting off some of their earlier gloom, although KMD Brands and Michael Hill International were an exception.

And Freightways is on the hunt for a new chair after Mark Cairns flagged plans to step down from the board as he dials back his governance workload.

A new dawn

The NZX 50 rose 36.23 points, or 0.3%, to 13,618.42, having touched a four-month high during the day. Within the index, 22 stocks gained, 18 declined and 10 were unchanged.

That took the weekly gain to 0.9%, with Mainfreight leading the benchmark higher as the logistics group advanced 5.8%, while exporter Scales climbed 5.6%, as tensions between the US and Iran flared up last weekend before cooler heads prevailed and the nations got back to the negotiating table for a lasting ceasefire and unfettered traffic through the Strait of Hormuz.

Cinema analytics firm Vista Group International was the weakest performer on the benchmark over the week, with Warner Bros Discovery’s Supergirl flopping in its opening weekend.

New Zealand’s market joined a stronger day across Asia, with Wall Street closed on Friday for the Independence Day holiday keeping trading relatively light. Turnover on the main board was $89.5 million, of which F&P Healthcare accounted for $12.2 million as it climbed 1.7% to $39.71, providing the biggest tailwind for the NZX 50.

The S&P/NZX 20 index futures contract for September was unchanged at 7,642, with 200 lots traded for a value of $1.5 million, while the NZX 20 rose 0.3% to 7,705.67.

The kiwi dollar extended its overnight gains, trading at 57 US cents at 5pm in Auckland from 56.74 cents yesterday after the ANZ-Roy Morgan monthly consumer confidence survey rose 4 points to 91.3, with people less pessimistic about making big ticket purchases.

“It’s helpful, but still below the 107.3 it reached in January,” said Matt Goodson, managing director at Salt Funds Management. “We’re looking and hoping for signs that the economy is turning up again like it was in the March quarter – you have to scrape pretty hard to see it.”

Out shopping

Retailers were broadly stronger, with Briscoe Group up 1.1% at $4.65 and Hallenstein Glasson Holdings climbing 0.6% to $10, while KMD dropped 4.4% to $1.76. Outside the benchmark, Warehouse Group recovered from its record low, surging 7.4% to 58 cents, and Michael Hill International declined 4.7% to 40.5 cents.

Ebos rose 2.3% to $20.98, joining a rally among healthcare stocks across the Tasman.

Goodson said F&P Healthcare largely avoided the souring sentiment on healthcare companies due to its heavy exposure to intensive care as opposed to consumer health, while Ebos was only starting to see some of the sector’s rebound that started last month.

Among other gainers on the day, Fletcher Building rose 2.4% to $3.38, Kiwi Property Group rose 2.2% to 95 cents, Summerset Group Holdings increased 1.7% to $8.90 and Mainfreight advanced 1.7% to $63.68.

Apple exporter Scales gained 1.2% to $6.57. New Zealand’s second-biggest apple grower Crasborn Fresh Crunch, a subsidiary of Kiwi Crunch, was tipped into liquidation today by the Inland Revenue Department over an unpaid $19 million tax bill. T&G Global was unchanged at $2.39 while Napier Port increased 1.4% to $3.75.

Tourism Holdings gained 0.7% to $2.94 after reaching a confidentiality agreement with BGH Capital and the Trouchet family to grant the consortium due diligence to investigate a potential acquisition of at least $3.10 a share. A rival suitor, reported to be Portugal’s Indie Campers, was granted due diligence last week after making an indicative offer of between $3.30 and $3.40.

Institutional money

Ryman Healthcare was the most heavily traded stock on the day, with a volume of 2.9 million as it rose 0.5% to $2.18. Of that, four trades accounted for almost 2.4 million shares changing hands at $2.175 apiece.

The NZX was unchanged at $1.42 after the latest monthly operating metrics showed a sharp increase in trading volumes and value in June and growth in the Smart units funds under management.

Vulcan Steel posted the steepest decline on the day, down 5.3% at $5.95.

Freightways slipped 0.1% to $13.88 after chair Mark Cairns announced his intention to retire from the board to cut down his governance commitments. He’ll stay in the role until the succession process is completed.

Goodman New Zealand dipped 1% to $2.08 after the commercial landlord outlined the details of a planned $125 million on-market buyback programme of its stapled shares in its notice of meeting, which could lift Goodman Group’s stake to almost 34% from about 32% if it didn’t participate. Independent adviser Simmons Corporate Finance said the rationale for the buyback was sound, and that the increase in Goodman Group’s stake wouldn’t be significant.

Meridian Energy fell 1.2% to $5.65 in a broadly softer day for the power companies, after getting final approval for easier access restrictions on the Lake Pūkaki hydro scheme’s contingent storage.

Outside the benchmark index, Fisher Funds managed-investment company Marlin Global declined 1.8% to 76.5 cents after appointing Fisher’s chief investment officer Ashley Gardyne to senior portfolio manager, with head of global research Sam Dickie staying within the wider international investment team.

Black Pearl Group surged 15% to 60 cents, unwinding some of its losses in recent weeks.

Reporting by Paul McBeth. Image from Curious News.