New Zealand’s S&P/NZX 50 index gained for a second day, joining Australia higher as the Reserve Bank of Australia’s rate cut yesterday spurred on a rally among its banking stocks, including pushing the Commonwealth Bank of Australia to a new record.
The domestic earnings season continued to heat up today with Napier Port surging on a better-than-expected result and special dividend to boot, while Argosy Property gained despite subdued earnings, Radius Residential Property rallied on its first profit in three years, and PaySauce gained as it remained in the black.
Meanwhile, investors are preparing for finance minister Nicola Willis’s budget on Thursday, which is being pitched as supporting economic growth within skinnier operating allowances.
And fresh from revenue minister Simon Watts calling time on the proposed digital services tax bill, Google New Zealand filed its local accounts, showing a lift in annual profit from its local support operation.
Still on track
The NZX50 rose 58.87 points, or 0.5%, to 12,703.1, with 19 gainers, 23 decliners and eight stocks unchanged. Turnover was $109.5 million.
New Zealand’s benchmark index is on track for its best month since April 2020, when it charged out of the covid pandemic slump, having gained 6.7% so far in May.
“It’s not bad to see the NZX50 tracking quite nicely,” said Mark Lister, investment director at Craigs Investment Partners.
Napier Port was the pick of companies reporting today, declaring a special dividend after finalising an insurance settlement, and lifting first-half profit 41% as it enjoyed increased container volumes. The shares jumped 6.7% to $3.03.
“There’s been a string of bad news with corporates downbeat with the tariffs and a depressing budget, so it’s good to see someone doing well,” Lister said. “The continaers have a good outlook, the agri side of the business is in good shape and there’s an increase in cruise ships coming in more frequently.”
Among other companies reporting today, Argosy Property rose 1.4% to $1.07 as revaluations bolstered its bottom line, even as underlying earnings declined. Radius Residential Care climbed 5.6% to 28.5 cents after reporting its first profit in three years and PaySauce increased 3.8% to 16.4 cents as it reported its second straight profit.
Banking on it
New Zealand’s benchmark index joined Australia higher as the S&P/ASX 200 index gained 0.6% in late trading, with the Reserve Bank of Australia’s rate cut yesterday buoying the banking sector as Commonwealth Bank of Australia hit a new record.
Dual-listed Westpac Banking Corp slipped 0.2% to $34.40 on the NZX, while ANZ Group Holdings decreased 0.1% to $31.40, and minnow lender Heartland Group Holdings was unchanged at 83 cents.
Fisher & Paykel Healthcare paced gains on the benchmark index as it rose 3.5% to $36.55. Forsyth Barr analysts raised their target price on the medical device maker by 40 cents to $37.70 ahead of its result next week.
The shoulder earnings season heats up next week when F&P Healthcare reports, along with Mainfreight, Infratil and Ryman Healthcare. Mainfreight today slipped 0.6% to $67.50, while Infratil fell 1.8% to $11.48 and Ryman rose 2.5% to $2.50.
New Zealand’s Reserve Bank will also review monetary policy next week and is expected to cut the official cash rate a quarter-point to 3.25%.
Managing expectations
Serko clawed back some of yesterday’s losses when it missed earnings expectations, climbing 4.1% to $3.06 today, while Tower rose for another day, up 1.4% to $1.49.
Warehouse Group led the local market higher, rising 4.8% to 88 cents.
The government will unveil its budget on Thursday, which finance minister Nicola Willis has said will support growth initiatives, but will have tight operating allowances requiring ministries and departments to cut spending in some areas to prioritise it in others.
The kiwi dollar rose to 59.49 US cents at 5pm in Auckland from 59.15 cents at 7am and 59.21 cents yesterday.
Meanwhile, Google New Zealand filed its financial statements with the Companies Office for the 2024 calendar year, showing net profit rose to $25.9 million from $17.8 million a year earlier, on a 3.4% increase in revenue to $87.2 million.
The local unit of the search engine giant acts a reseller of its services, meaning it doesn’t book local advertising revenue in its domestic entity. The accounts show it paid $1.05 billion in service fees to related parties in the year.
Google overnight signalled plans to introduce an artificial intelligence mode on its search engine, which is coming under increasing pressure from AI large language models being used to replace simple online searches.
Revenue minister Simon Watts yesterday pulled the pin on a proposed digital services tax, which was to act as a backstop if multilateral efforts to address cross-border tax issues stalled.
Reporting by Paul McBeth. Image from Mitchell Luo on Unsplash.
