RBNZ gets a Nordic twist with new governor; NZX50 buoyed by Infratil

The government unveiled a fresh face to lead the Reserve Bank, with Riksbank deputy governor Anna Breman taking up the governorship in December, while fill-in Christian Hawkesby will depart No 2 The Terrace once she starts.

Meanwhile, the S&P/NZX50 index rallied late in the day after Infratil reversed earlier losses to end the session in the green as its CDC data centres unit confirmed new contracts putting it on track to double earnings in two years.

KMD Brands gained as it reported a widening loss and underlying earnings at the bottom end of guidance, while Australian media reports raised the prospect of an interested party in the form of billionaire Brett Blundy.

And Fonterra Shareholders’ Fund units continued to break into new territory ahead of the dairy cooperative’s annual result on Thursday, which is expected to deliver a strong result and shed more light on the sale of the Mainland consumer business to France’s Lactalis.

A new governor

The kiwi dollar traded at 58.61 US cents at 5pm in Auckland from 58.55 cents at 7am and 58.46 cents yesterday after finance minister Nicola Willis announced Riksbank deputy governor Anna Breman as the next governor of the Reserve Bank, starting in December.

Sweden’s central bank cut its key rate a quarter-point to 1.75% on Tuesday in potentially the final reduction in its easing cycle as inflation in the Nordic nation has been simmering amid a sluggish economic recovery.

Breman, who was previously chief economist at Sweden’s Swedbank, stressed a focus on price stability during a press conference on her appointment.

“It’s going to be quite a refreshed policy committee, with a recent appointment and Hawkesby leaving,” said Greg Smith, investment specialist at Generate Investment Management. “The key point is she’s there to restore credibility.”

The Reserve Bank appointment overshadowed the release of Treasury’s long-term fiscal statement, which again pointed to New Zealand’s problematic ageing population in balancing the government’s books, with current and future governments warned to consider a mix of options to cope with the rising costs of healthcare and superannuation.

A green light

Meanwhile, New Zealand’s NZX50 was one of the stronger performers across Asia, rising 44.77 points, or 0.3%, to 13,181.31. Within the index, 25 stocks rose, 15 fell and 10 were unchanged. Turnover across the main board was $138.2 million, with Fisher & Paykel Healthcare accounting for $35 million of that as it rose 1.1% to $37.80.

Across Asia, stock markets were mixed after a soft lead from Wall Street, with Australia’s S&P/ASX 200 index down 1% in late trading as the banks and tech sector led a broad sell-off. Japan’s Nikkei 225 index nudged up 0.1% and Singapore’s Straits Times Index slipped 0.2%, while Hong Kong’s Hang Seng rose 0.9%.

The local bourse was buoyed by heavyweight Infratil as the infrastructure investor ended the day up 1.1% at $12.39, reversing an earlier decline before it said it’s contracted an extra 100 megawatts of capacity for its CDC data centres business. That puts the jewel in Infratil’s crown on track to double earnings by 2027.

KMD Brands led the bourse higher as it climbed 6.5% to 24.5 cents, coming off a record low. The outdoor equipment chain reported a widening loss and earnings near the lower end of guidance as it gave up margin with discounted offers to maintain sales. Meanwhile, the Australian newspaper reported Australian billionaire Brett Blundy has been seeking to build a meaningful stake in the retail chain.

“The shares are more about the Blundy interest,” Generate’s Smith said.

Fonterra Shareholders’ Fund units jumped 6% to $7.90, having climbed as high as $7.99 – a new record on an adjusted basis and nearing the all-time unadjusted high of $8.09 the fund reached in 2013. Fonterra Cooperative Group reports its annual result on Thursday, and is expected to deliver a strong result as global demand for milk holds up. Investors will also be looking for more clarity on the $4.2 billion sale of the Mainland consumer business.

Reassuring

Tower rose 0.3% to $1.72 after the insurer renewed its reinsurance estimating the cost will represent 10.7% of gross written premium, down from 13.3% in the 2025 financial year.

Westpac Banking Corp posted the biggest decline on the NZX50, falling 3.7% to $42.49, while travel software developer Serko dropped 2.2% to $2.70 and ANZ Group Holdings declined 2.1% to $8.80.

SkyCity Entertainment Group was again the most heavily traded stock with a volume of 2.5 million, ending the day unchanged at 66 cents, still shy of the 70 cent price of its recent capital raising that needed underwriters to pick up about two thirds of the retail component.

Outside the benchmark index, Trade Window dropped 12% to 25.5 cents after raising $1 million in a placement to wholesale investors at 19 cents a share, a 9% discount to the volume weighted average price over the past 90 days. It affirmed revenue guidance of between $10 million and $11 million in the March year.

And WasteCo slipped 5.3%, or 0.1 of a cent, to 1.8 cents after raising $2 million through a convertible note, rolling an existing $1 million note and injecting $1 million of cash into the business.

Reporting by Paul McBeth. Image from Curious News.