Interest rate cuts from the Reserve Bank of Australia and the People’s Bank of China kept stock markets across Asia in a buoyant mood, with the S&P/NZX 50 index keeping its head above water in an often mixed session.
Spark New Zealand was near the top of the leaderboard on some hefty volumes, with the telco ignoring speculation across the Tasman that its beleaguered share price has captured the attention of private equity firms.
Meanwhile, the domestic earnings season continued with insurer Tower delivering a bigger interim dividend than expected after paying out a smaller number of claims, while Serko revenue growth fell short of analysts’ predictions.
And in M&A news, long-serving Goldman Sachs New Zealand head Andrew Barclay will leave the firm after 25 years as one of the country’s most respected dealmakers.
Treading water
The NZX50 increased 15.16 points, or 0.1%, to 12,644.23, with 23 gainers, 20 decliners, and seven companies unchanged. Turnover across the main board was $119 million.
New Zealand’s market was a bit of a laggard across Asia, with the S&P/ASX 200 index up 0.6% in late trading after the Reserve Bank of Australia met expectations by cutting the target cash rate a quarter-point to 3.85% while China’s Shanghai Composite rose 0.4% after the People’s Bank of China sliced 10 basis points from its benchmark lending rates.
The kiwi dollar traded at 59.21 US cents at 5pm in Auckland, unchanged from 7am and up from 58.88 cents yesterday.
Hong Kong’s Hang Seng jumped 1.3%, with Chinese battery maker CATL surging almost 13% on debut in the world’s biggest initial public offering so far this year. Local stock market operator NZX was unchanged at $1.53.
Utilities held for their reliable dividends were among the day’s local leaders, with lines company Vector posting the biggest gain on the benchmark index higher as it rose 3.9% to $4.25.
Meridian Energy gained 3.4% to $5.915, while Vital Healthcare Property Trust advanced 1.1% to $1.87, Goodman Property Trust increased 0.8% to $1.94, and Kiwi Property Group rose 0.6% to 90 cents.
Buy the rumour
Spark New Zealand gained 3% to $2.25 on a volume of 4.8 million – the most for the day – after The Australian newspaper reported the local telco had attracted interest from two private equity firms.
Chorus decreased 0.4% to $8.23 after the Commerce Commission noted an investigation into the broadband network operator’s geographic pricing obligations on its website.
The broadband network company said it’s engaging with the commission and is confident it’s fully compliant with the obligations.
Tower rose 2.1% to $1.47 after more than doubling its interim dividend as first-half earnings climbed 25%.
“It’s a definite advantage as an insurance company when you’ve got higher revenue and less money going out the door in claims,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene.
Ebbs and flows
Meanwhile, Serko sank 7.8% to $2.94 in the biggest decline on the NZX50 after the travel software company’s 27% increase in income fell short of expectations and it wrote down the value of its recent GetThere acquisition.
Stride Property Group declined 2.5% to $1.15 and Vista Group International slipped 2.5% to $3.51. Fisher & Paykel Healthcare decreased 1.6% to $35.31.
Among companies reporting on Wednesday, Argosy Property fell 1.9% to $1.055, Napier Port rose 2.5% to $2.84, Radius Residential Care slipped 1.8% to 27 cents, and PaySauce was unchanged at 15.8 cents.
Reporting by Paul McBeth. Image from James Yarema on Unsplash.
