NZX 50 joins decline across Asia; Infratil stumbles as CDC valuation dips

New Zealand’s S&P/NZX 50 index joined a decline across Asia as rising oil prices and bond yields weighed across the region, with Infratil among those on the red side of the ledger as the valuation of its CDC Data Centres unit was trimmed on a higher interest rate outlook.

Interest rate-sensitive companies including commercial landlords and lines company Vector were broadly weaker as New Zealand’s 10-year government bond yield inched higher, while Freightways was at the bottom of the leaderboard amid the elevated fuel costs.

Tower was among the day’s gainers, hitting a four-and-a-half month high after Forsyth Barr analysts upgraded the insurer to ‘outperform’, while Gentrack and Vista Group International followed Wall Street’s tech rally, where the Nasdaq Composite closed at another all-time high.

And across the Tasman, ASX-listed Dicker Data advanced after saying it agreed to buy New Zealand tech distributor Sektor for $138 million.

Not so frothy

The NZX 50 slipped 16.08 points, or 0.1%, to 13,684.04, with 25 stocks declining, 21 gaining, and four unchanged. The S&P/NZX 20 index fell 0.3% to 7,482.46, with the futures contract untraded.

Turnover across the main board was $146.2 million, of which Fisher & Paykel Healthcare accounted for $21.6 million, with the country’s biggest listed company up 1.1% at $47.

Stock markets across Asia were broadly weaker, skipping Wall Street’s rally to record highs, with Brent crude oil futures up 1% at US$101.56 a barrel as Iran increased the pace of attacks on tankers, and government bond yields pushed higher.

Japan’s Nikkei 225 index fell 0.7% in late trading, while Hong Kong’s Hang Seng declined 0.5% and Australia’s S&P/ASX 200 index was down 0.1%.

“The NZX has been relatively flat this week,” said Greg Smith, investment specialist at Generate Investment Management. “The business confidence survey yesterday took the urgency away from a potential rate hike, and it all hangs a little bit on the September CPI,” he said, referring to Statistics New Zealand’s consumers price index.

The yield on New Zealand’s 10-year government bond edged up 1 basis point to 5.12%, while the kiwi dollar traded at 56.09 US cents at 5pm in Auckland from 56.01 cents yesterday.

Rate-sensitive companies were broadly weaker, with Vector falling 2.3% to $4.67, Ryman Healthcare sliding 2% to $1.75, Kiwi Property Group declining 1.6% to 90 cents and Precinct Properties NZ down 1.6% at 93.5 cents.

Freightways posted the steepest decline on the day, down 2.4% at $12. Former chair Mark Cairns sold his 50,000 Freightways shares at an average price of $12.36 in several trades over the past week, filings to the stock exchange showed.

Rising rates

Infratil fell 0.9% to $13.70 after the infrastructure investor trimmed its quarterly valuation on the CDC Data Centres business, with the midpoint of the range down A$78 million at A$18.45 billion as rising interest rates lifted the assumed cost of future financing, offsetting increased contracted capacity.

Separately, Infratil declined to comment on a report in The Australian’s DataRoom that it was considering selling telecommunications provider One New Zealand’s fibre assets. Rival Spark New Zealand increased 0.5% to $1.985 with 2.2 million shares traded – the most for the day – and fibre network operator Chorus advanced 0.5% to $8.35.

Tower hit a four-and-a-half-month high of $2.09, ending the day up 1% at $2.06 after Forsyth Barr analysts James Lindsay and Georgio Toulis lifted their target price on the insurer by 20 cents to $2.60 and raised their rating to ‘outperform’ after the company upgraded its earnings guidance.

“Given our expectations for risk-mix impacts to moderate through 1H27 and previous analysis suggesting the NZ insurance pricing cycle could be approaching trough levels, our confidence in Tower’s growth outlook has improved,” Lindsay and Toulis said in a note to clients.

Fonterra Shareholders’ Fund units nudged up 0.1% to $8.95 after milk prices rose at the latest Global Dairy Trade auction, with the GDT index up 1.2% for an average winning price of US$3,928 a tonne.

Gentrack posted the biggest gain on the NZX 50 for a second day, up 7% at $4.15 while Vista advanced 1.1% to $2.81. Serko unchanged at $1.21.

Across the Tasman, Dicker Data climbed 2.2% on the ASX after saying it agreed to buy New Zealand’s Sektor, subject to conditions and regulatory approval. The Kiwi tech distributor generated revenue of $440 million in the 12 months ended Aug 31, with adjusted earnings of $22.7 million. Dicker Data said it would fund the deal through its existing debt facilities.

Reporting by Paul McBeth. Image from Curious News.