New Zealand’s pick up in unemployment through the June quarter reaffirmed expectations the Reserve Bank will cut the official cash rate later this month, with more people dropping out of the labour force and wage growth relatively subdued.
The S&P/NZX 50 index kept its head in green territory as Infratil buoyed the local bourse, with stock markets mixed across Asia as investors ponder the outlook for US interest rates and President Donald Trump’s wide-ranging tariff regime.
Eroad hit a three-year high after transport minister Chris Bishop unveiled plans to dump petrol excise in favour of a digital-based road user charging system, which the telematics firm said it’s well-placed to support.
And across the Tasman, while the S&P/ASX 200 index hit a new record, the stock market operator was forced into an embarrassing reversal after misidentifying TPG Telecom as the buyer of automotive software developer Infomedia, rather than the private equity giant TPG Capital.
Deep in the details
Statistics New Zealand figures showed the country’s unemployment rate rose to 5.2% in the June quarter from 5.1% in the prior period, falling short of analysts’ predictions for a 5.3% rate and in line with the Reserve Bank’s outlook.
Still, the headline figure was suppressed by a reduction in the participation rate to 70.5%, while private sector wage inflation remained relatively subdued at 2.3%.
“The headline looked in line but really it was a bit softer,” said Greg Smith, head of retail at Devon Funds Management. “It’s not a great time to be a youth if you’re looking for work in New Zealand.”
The kiwi dollar rose to 59.25 US cents at 5pm from 58.98 cents yesterday.
The NZX50 increased 3.12 points, or 0.02%, to 12,880.16, in a mixed day as 24 stocks fell, 17 gained, and nine were unchanged. Turnover was $136 million across the main board.
One New Zealand-owner Infratil helped buoy the domestic market, rising 1.3% to $12.05 on a volume of 2 million, while broadband network operator Chorus gained 3.3% to $9.09 and Spark New Zealand advanced 1% to $2.505 on a volume of 2.5 million – the most for the day.
Across the Tasman, TPG Telecom yesterday signalled a A$3 billion share buyback after selling its network assets to Vocus, but today was caught up in a case of mistaken identity when the ASX tagged its ticker code to private equity giant TPG Capital’s purchase of automotive software firm Infomedia for A$651 million.
Australia’s stock market operator is already under the microscope by regulators over protracted issues upgraded its clearing and settlements system. ASX was down 0.9% in late trading, while the benchmark ASX200 index was up 0.6%, having hit a fresh record.
Big deals
New Zealand’s stock market operator NZX fell 1.3% to $1.48 with an unusually large volume of 2.2 million shares changing hands, of which 1.8 million were traded in a single deal at $1.48 apiece.
Gentrack led the local index higher, up 3.8% at $10.15 as it snapped a three-day slide. The utilities software developer has been under increasing pressure from rival Kraken Technologies.
Meanwhile, Property for Industry gained 1.3% to $2.32 after the industrial property landlord ended a tenancy with Graincorp early, with a $5 million surrender fee, and said it expects annual dividends to be at the top end of guidance.
Oceania Healthcare posted the biggest decline on the NZX50, falling 2.9% to 67 cents, while SkyCity Entertainment Group fell 2% to 96 cents, and Investore Property slipped 1.7% to $1.13.
Outside the benchmark index, Eroad hit a three-year high $1.60, ending the day up 4.6% at $1.59 after the government announced plans to drop petrol excise duties in favour of electronic road user charging.
Eroad said the change offers a substantial opportunity to modernise road funding at scale, and that its platform is well-positioned to support the shift.
Reporting by Paul McBeth. Image from Curious News.