NZX50 gains as China keeps growing
House sales were soggy in June.
New Zealand’s S&P/NZX 50 index snapped a four-day decline as investors brushed off US President Donald Trump’s latest bout of tariff threats and as China's economic growth wasn't deterred by the cooling global trade environment.
Tourism Holdings led the local market higher, though is still at a discount to the non-binding offer lobbed in by the Trouchet family and private equity firm BGH Capital.
Meanwhile, retirement village operators Summerset Group Holdings and Ryman Healthcare advanced after Real Estate Institute figures showed house sales remained soft through June.
And Tower rallied after Forsyth Barr started formal coverage of the general insurer with an ‘outperform’ rating.
On the rise
The NZX50 rose 10.94 points, or 0.1%, to 12,689.63, with 21 stocks gaining, 23 declining, and six unchanged. Turnover across the main board was a relatively quiet $93.8 million.
Stock markets across Asia were broadly stronger and S&P 500 futures were pointing to a 0.2% gain when Wall Street opens, as investors shrugged off US President Donald Trump’s latest strong-arming of his trading partners.
Local heavyweight Mainfreight was among one of the stronger performers on the NZX, up 2.2% at $66, while Port of Tauranga rose 1.1% to $7.10 and Napier Port advanced 0.9% to $3.28.
Auckland International Airport increased 0.3% to $7.435 after the country’s major gateway reported a 1% increase in international passenger movements in June from a year earlier, while domestic numbers were up 2%. Separately, the airport’s target price was cut by 1.1% to $8.90 a share by Citi analysts.
National carrier Air New Zealand and casino operator SkyCity Entertainment Group were both unchanged at 59 cents and 98 cents respectively.
The a2 Milk Co gained 0.6% to $7.94 and Fonterra Shareholders’ Fund units gained 1.1% to $6.65 after China’s gross domestic product grew 5.2% in the June quarter from a year earlier, defying the heightened trade tensions with the US and coming in line with economists’ expectations.
Not quite there
Tourism Holdings led the local market higher, up 9.1% at $2.16, still below the $2.30 price dangled in front of the rental campervan operator by the Trouchet family – which joined the company as part of the Apollo Tourism & Leisure – and private equity firm BGH Capital.
Separately, South Island-based tour operator Leisure Tours, which carries 10,000 passengers a year, was bought by Pounamu Tourism Group in a multi-million-dollar deal.
Tower rose 1.3% to $1.61 after Forsyth Barr initiated formal coverage of the general insurer, giving it an ‘outperform’ rating and a price target of $2, saying the discount to its Australian is unjustifiably understated given the way it’s lifted its game in recent years.
“As such, we see Tower continuing to offer investors a compelling risk-adjusted total return profile, with scope for further capital returns or buy-backs should large-event costs remain benign in any given year,” Forsyth Barr analysts James Lindsay and Will Twiss said in a note to clients.
Hot property?
Retirement village operators were broadly stronger after REINZ figures showed the property market remained soggy in June, with the house price index up 0.3% from a year earlier and an increase in the days to sell a property. Ryman Healthcare rose 0.8% to $2.55 while Summerset advanced 1.4% to $11.88.
“The REINZ data for June paints a further gloomy picture of the housing market, with overall conditions remaining steadily subdued and without any significant improvement,” ASB Bank economist Yen Nguyen said in a note. “Overall, these indicators suggest the housing market has shown little movement despite a sizeable reduction in mortgage interest rates.”
Fletcher Building fell 1.3% to $3.03.
Commercial landlords were broadly weaker with Argosy Property down 1.7% at $1.13, Investore Property falling 1.7% to $1.16, and Goodman Property Trust slipping 1% to $2.05.
Sky Network Television posted the biggest decline on the day, down 3.6% at $2.92.
Outside the benchmark index, media group NZME was unchanged at $1.16 after MediaWorks won Auckland Transport outdoor advertising contract previously held by ASX-listed oOh!media, which was up 1.2% in late trading.
The kiwi dollar traded at 59.77 US cents at 5pm in Auckland from 59.81 cents yesterday.
Reporting by Paul McBeth. Image from Nuno Alberto on Unsplash.
