NZX50 posts best week in almost two years; SkyCity leads Friday gainers

New Zealand’s S&P/NZX 50 index rose for a fifth day on Friday, to mark its best week since November 2023 ahead of the upcoming rate review by the Reserve Bank, which is expected to deliver a quarter-point cut with an outside chance of an even bigger 50 basis point reduction.

Companies with beat-up share prices were among those leading gainers through the week, including Fletcher Building and SkyCity Entertainment Group – both of which stand to benefit from a spurt of economic activity if rates are cut.

Meanwhile, stock markets across Asia were mixed with Chinese markets closed for the Golden Week holiday while Japan’s Nikkei 225 neared new highs ahead of the ruling Liberal Democratic Party’s vote on a new leader to replace prime minister Shigeru Ishiba.

And e-waste recycler Mint Innovation played down speculation across the Tasman that it’s looking at an initial public offering on the ASX before the end of the year, while acknowledging it’s always weighing up options to boost shareholder value.

Five-day run

The NZX50 rose 62.33 points, or 0.5%, to 13,514.09 on Friday, taking its weekly gain to 3.1%. Within the index, 37 stocks gained, 12 fell and once was unchanged. Turnover across the main board was $122.2 million, of which Fisher & Paykel Healthcare accounted for $12.8 million as it rose 1.3% to $37.75, joining Australian health stocks higher.

SkyCity Entertainment Group led the benchmark, climbing 6.7% to a month-high 71.5 cents. The casino operator was sold heavily when it raised $240 million at a steep discount in August, with underwriters needing to pick up the slack from tepid demand in the retail component of the offering.

The gambling company climbed 9.2% this week, clawing back some losses ahead of the Reserve Bank’s monetary policy review next week, which is expected to cut the official cash rate 25 basis points to 2.75%, with an outside chance of a larger half-percentage point reduction.

“In our view, there doesn’t seem to be a good reason to delay a move to 2.5%,” Westpac NZ chief economist Kelly Eckhold said in a note. “Quickly moving the OCR to a stimulatory level will generate confidence and activity ahead of the important Christmas and summer trading period.”

Building materials firm Fletcher Building increased 0.9% to $3.48 on Friday, to enjoy its best week since February with a weekly gain of 7.7%, while clothing chain Hallenstein Glasson Holdings advanced 0.7% to $9.60 taking its weekly gain to 7.3%, its best since May.

Stock markets across Asia were mixed as China kicked off its Golden Week holiday, while the US federal government shutdown holds up official data from feeding into the Federal Reserve’s rate decision later this month. Australia’s S&P/ASX 200 index was up 0.4% in late trading, while Japan’s Nikkei 225 surged 1.5% ahead of the Liberal Democratic Party’s vote on a new leader to take over the prime ministership. Hong Kong’s Hang Seng fell 0.9% in late trading.

The kiwi rose to 85.91 yen at 5pm in Auckland from 85.91 yen yesterday, and traded at 58.19 US cents from 58.27 cents yesterday.

Among other companies to gain on the day, Oceania Healthcare rose 4.5% to 70 cents, KMD Brands gained 3.6% to 28.5 cents, and Goodman Property Trust increased 2.8% to 2.23.

Port of Tauranga rose 1.7% to $7.85 after saying Northport – which it co-owns with the Northland Regional Council and the Ngapuhi investment vehicle, Tupu Tonu – received resource consent to extend its wharf.

A widening channel

Channel Infrastructure was the most heavily traded company on the exchange with a volume of 2.3 million shares changing hands as it rose for a fifth day, up 1.5% at $2.75 and notching up an 8.3% weekly gain.

The a2 Milk Co posted the biggest decline on the day, falling 3.4% to $10.05, while Ryman Healthcare declined 2.3% to $2.61 and Gentrack slipped 1.1% to $9.59.

Stock market operator NZX rose 1.4% to $1.42 after its latest monthly operating update showed a 6% decline in the value of cash trading in September from a year earlier, with slower pace of growth in the year-to-date.

NZX shares ended the week up 4.4%, even as another two companies look set to depart the bourse as Restaurant Brands New Zealand’s three-quarter owner Finaccess lobbed in a takeover bid for the rest of the company it doesn't own and carpetmaker Bremworth’s board agreed to a scheme of arrangement with the parent of rival Godfrey Hirst.

Meanwhile, e-waste recycler Mint Innovation played down a report in the Australian Financial Review that it’s meeting fund managers next week with one eye on an A$80 million initial public offering on the ASX before the end of the year, saying the market shouldn’t rely on unofficial reports or speculation and that any material information on its strategic plans will meet all regulatory requirements it might face.

“We, as like most companies, are always evaluating strategic options to enhance shareholder value and accelerate our vision to be the world's leading provider of circular green metals,” a spokesperson said in an email. “This is a normal part of our business planning and review process.”

Reporting by Paul McBeth. Image from Partha Narasimhan on Unsplash.