The Warehouse Group was tipped out of the S&P/NZX 50 index by arch-rival Briscoe Group in the latest reweightings, which will prompt index-tracking passive investors to ditch their Red Sheds stock for Rod Duke’s powerhouse.
Meanwhile, the local stock market slipped in a relatively subdued day across Asia as investors scratched their heads about what the falling out between former besties Tesla chief Elon Musk and US President Donald Trump means for global markets.
Fletcher Building led the local bourse lower after SkyCity Entertainment Group said it wants $330 million over the much-delayed convention centre in downtown Auckland and will take its claim to court.
Despite that, the NZX50 started June on the front foot, with a weekly gain – albeit potentially tinged by expectations that the lacklustre economy will need a boost from the Reserve Bank.
Thank you for the music
The NZX50 decreased 13.67 points, or 0.1%, to 12,563.48, with 17 companies declining, 28 gaining, and five stocks unchanged, in a day where investors were left stunned by the very public spat between Tesla chief Elon Musk and US President Donald Trump over the White House’s expansive spending plans.
Tesla shares sank 14% in New York trading, although they’re up 0.8% in the aftermarket, and the EV carmaker was the most traded US security by Sharesies users today. S&P 500 futures are pointing to a 0.3% increase when Wall Street opens.
The kiwi dollar was little changed at 60.46 US cents at 5pm in Auckland from 60.32 cents yesterday.
Fletcher led the local market lower, falling 2.5% to $3.07 on a volume of 2.3 million after SkyCity said it plans to file court proceedings against the building company seeking more than $330 million over the much-delayed international convention centre. Fletcher said it will defend the claim.
SkyCity fell 1.1% to 94 cents, having climbed as high as $1.04 in early trading.
Red shed redemption
Meanwhile, Warehouse fell 2.1% to 94 cents before its fate leaving the benchmark index was confirmed after the bell. Briscoe rose 1.4% to $4.92, overcoming liquidity concerns given managing director Rod Duke’s three-quarter stake of the company.
Briscoe also replaces Warehouse in the S&P/NZX midcap index, while the Red Sheds operator switches into the smallcap index – all effective before trading starts on June 23.
KMD Brands gained 3.5% to 30 cents.
Ryman Healthcare posted the biggest gain for a second day in a row, advancing 4.1% to $2.27 as it continues to climb out of its recent rut.
Energy companies also remained buoyant, with Meridian Energy gaining 2.3% to $5.86, while Manawa Energy increased 1.3% to $6.46, Mercury NZ advanced 0.8% to $5.97 and Contact Energy was up 0.3% at $9.30.
“Attention on the sector is very high as the ministerial review and Energy Competition Task Force level-playing-field processes near their conclusions,” Forsyth Barr analysts Andrew Harvey-Green and Hugh Lockwood said in a note to clients. “Given the scrutiny and comments from politicians and regulators, we expect action to eventuate – though it is difficult to determine exactly what that will be. We maintain that any resulting changes are unlikely to materially impact company valuations.”
Breaking into June
The NZX50 rose 1.2% for the week, snapping two weekly declines and starting the month of June on the front foot.
That’s been supported by economists eyeing up another rate cut by the Reserve Bank if data continue to show New Zealand’s economy remains sluggish.
“Our forecast is that benign inflation data and sluggish activity data will pave the way for the RBNZ to continue cutting beyond what they currently envisage, but our views are certainly data dependent too!” ANZ New Zealand economists said in a note.
US non-farm payrolls figures are the main piece of data coming from New York on Friday, with analysts predicting the world’s biggest economy added 125,000 jobs last month, with the unemployment rate steady at 4.2%.
Reporting by Paul McBeth. Image from Curious News.
