Retailers Briscoe, Hallenstein shrug off Warehouse woes as NZX50 gains

New Zealand’s S&P/NZX 50 index joined a broad rally across Asia as the prospect of the Federal Reserve sticking to cutting rates outweighing the federal government shutdown, with mining companies in Australia driving gains across the Tasman and South Korea’s benchmark hitting a record on potential chip deals with OpenAI.

Retailers shrugged off the latest round of red ink at Warehouse Group, with Briscoe Group and Hallenstein Glasson Holdings among the day’s gainers as the owner of the Red Sheds continues to rebuild after a torrid few years.

Stock market operator NZX declined with another company looking set to delist after carpet maker Bremworth found a buyer in Godfrey Hirst-parent Mohawk Industries.

Meanwhile, the government’s three-pronged freight strategy got a mixed response, with Port of Tauranga and Freightways on the green side of the ledger, while Mainfreight, Move Logistics and Napier Port declined.

What shutdown

The NZX50 rose 17.78 points, or 0.1x%, to 13,451.76, with 23 stocks gaining, 20 falling and seven unchanged. Turnover across the main board was $124.8 million, of which Spark New Zealand accounted for $15.7 million, ending the day unchanged at $2.35.

Stocks across Asia followed Wall Street higher as investors looked through the US federal government shutdown – which Fitch Ratings said won’t have any immediate implications for the country’s credit rating – as private payroll data showed a surprise decline in US jobs last month, firming up expectations for the Federal Reserve to cut its key rate later this month.

The kiwi dollar extended its gains, trading at 58.27 US cents at 5pm in Auckland from 58.12 cents at 7am and 57.91 cents yesterday.

Australia’s S&P/ASX 200 index rose 1.1% in late trading, with mining stocks including heavyweights BHP and Rio Tinto advancing as the gold price tests new heights, and after Reuters reported the US government has offered to buy stakes of Australian critical minerals firms as it seeks alternative supply to China.

South Korea’s KOSPI surged 2.9% to a record with SK Hynix and Samsung signing non-binding agreements to potentially supply OpenAI with advanced chips, while Japan’s Nikkei 225 index advanced 0.6% and Hong Kong’s Hang Seng climbed 1.5%.

Ryman Healthcare led the NZX50, rising 2.7% to $2.67, while across the Tasman it jumped 4.8% to A$2.39 in its second day of trading with a secondary listing on the ASX.

The dual-listed lenders were stronger on both sides of the Tasman, with ANZ Group Holdings up 2.2% at $38.48 on the NZX while Westpac Banking Corp increased 1.2% to $44.40. Heartland Group Holdings advanced 1.4% to $1.09.

Red ink

Hallenstein Glasson Holdings rose 1.9% to $9.53 and Briscoe Group gained 1% to $5.15 as Warehouse Group reported a narrower loss on a small increase in sales as the owner of the Red Sheds and Noel Leeming continues to turnaround plan to revive profitability. Warehouse, which sits outside the NZX50 was unchanged at 80 cents, while KMD Brands was also unchanged at 27.5 cents.

“There’s not exactly green shoots in there and that’s probably a disappointing performance at the Red Sheds,” said Greg Smith, investment specialist at Generate Investment Management, who noted the looming opening of Ikea in Auckland will add to the firm's challenges.

“The reality is, they’re getting a credible new competitor for the Christmas sales period, which is a critical one,” he said. “The home category is about one-seventh of the Red Sheds’ business.”

Fletcher Building extended its rally for an eighth day, climbing 1.8% to $3.45. Government data yesterday showed new building consents rose in August, which economists have said might indicate the cycle has passed its bottom.

Channel Infrastructure gained 1.9% to $2.71 after reports ExxonMobil is considering selling its New Zealand assets, such as the Mobil service station chain and a 27% stake of the Wiri Oil Services on the other end of Channel's Marsden pipeline.

Transport and logistics companies were mixed after infrastructure minister Chris Bishop announced a three-point plan to improve the nation’s freight system, which will see an updated action plan for the sector, an updated demand study, and a new advisory council.

Port of Tauranga rose 1.6% to $7.72, Freightways edged up 0.4% to $13.80, while Mainfreight fell 2.1% to $61.99, Napier Port slipped 1.2% to $3.19 and Move Logistics, which is outside the benchmark, dropped 6.8% to 20.5 cents.

Vulcan Steel posted the biggest decline on the NZX50, falling 4.5% to $8.02.

Stock market operator NZX slipped 1.1% to $1.40 with the local bourse poised to lose another listing after Bremworth’s board entered into a scheme of arrangement with rival Godfrey Hirst’s parent, Mohawk Industries.

Bremworth hit a nine-year high 92.5 cents as it surged 42% to end the day at 88 cents after saying shareholders are expected to receive between $1.05 and $1.15 a share, with Mohawk to pay 75 cents a share, or $52.9 million, for the company and another 30-to-40 cents of excess cash being distributed through a buyback and dividends. The deal is subject to regulatory and court approvals, and a shareholder vote.

Reporting by Paul McBeth. Image from Curious News.