Stocks across Asia were broadly stronger as reports started leaking out that US President Donald Trump was poised to announce a trade deal with the UK, while his Treasury secretary Scott Bessent is set to start negotiations with China.
Utilities software developer Gentrack, which has some hefty exposure to the UK, posted the biggest gain on the S&P/NZX 50 index, although New Zealand’s benchmark turned late in the day as Ryman Healthcare snapped a five-day gain on hefty volumes.
Infratil dropped after Forsyth Barr analysts trimmed their target price and raised the prospect of asset sales to fund the capital hungry arms of the infrastructure investor’s portfolio.
And Australian dual-listed lenders ANZ Group Holdings and Westpac Banking Corp fell for another day as the major banks’ recent earnings left investors feeling cold.
Let’s get moving again
The New Zealand dollar fell to 59.68 US cents at 5pm in Auckland from 60.01 cents yesterday and declined to 44.77 British pence from 44.96 pence as Trump signalled a major trade deal was going to be announced on Thursday in the US. Reports later emerged that it will be with the UK, which this week reached a free trade agreement with India.
That comes as the Bank of England is set to review monetary policy overnight and is expected to cut its benchmark rate, following on from the Federal Reserve’s announcement today, where it stayed on hold.
The NZX50 turned late in the trading session to slip 29.86 points, or 0.2%, to 12,467.03, with 22 stocks falling, 25 gaining and three unchanged. Turnover across the main board was $133.1 million.
Australia’s S&P/ASX 200 index rose 0.2% in late trading, while Singapore’s Straits Times Index slipped 0.2% and Hong Kong’s Hang Seng was up 1%.
Vista Group International led the benchmark index lower, falling 3.3% to $3.53, continuing its whipsawing in recent days as investors ponder whether Trump’s threatened tariff on films made outside the US will actually come to fruition.
Meanwhile, Ryman sank 3.3% to $2.37 on a volume of 6.2 million shares, making it the most heavily traded stock on the day.
An honest conversation
Infratil dropped 3.2% to $11.30 after Forsyth Barr analysts affirmed their ‘neutral’ rating on the stock and trimmed their target price by 20 cents to $12.50, predicting the infrastructure investor may need to rethink its portfolio to meet the cash demands for its data centres and renewable energy businesses.
The company will soon claim a stake of Contact Energy once the gentailer completes its cash-and-scrip acquisition of Manawa Energy – of which Infratil is a shareholder – and Forsyth Barr’s Aaron Ibbotson and Benjamin Crozier anticipate selling the Contact shares will only cover two years of its capital needs.
“To set Infratil up for the next decade, a rethink is needed,” Forsyth Barr’s Ibbotson and Crozier said in a note to clients. “That may mean abandoning the dividend altogether, replacing debt with equity, or changing the portfolio mix to more cash-generative infrastructure assets.”
Contact slipped 0.6% to $8.94, while Manawa gave up some of yesterday’s power surge, falling 0.5% to $6.16.
ANZ slipped 1.9% to $31.80 after reporting flat earnings – like its peers Westpac and National Australia Bank – in what was chief executive Shayne Elliott’s last hurrah. Westpac fell 3.2% to $32.85.
Gentrack posted the biggest gain on the day, climbing 5.1% to $12.55, its highest since February.
Commercial landlords were also among the day’s gainers, with Precinct Properties NZ advancing 3.5% to $1.18, Kiwi Property Group climbing 3.5% to 89 cents, and Stride Property Group gaining 2.6% to $1.18.
Reporting by Paul McBeth. Image from Emily Wang on Unsplash.
