Dual-listed Westpac Banking Corp was leading the charge among financial stocks on both sides of the Tasman as the lender’s third-quarter result impressed investors, while Commonwealth Bank of Australia declined for a second day.
Meanwhile, Gentrack clawed back some of its recent losses after Origin Energy’s earnings shone a light on the utilities software developer’s bête noire, Kraken Technologies.
Real Estate Institute of New Zealand figures painted a dark picture of the local property market, although Fletcher Building and Ryman Healthcare kept themselves on the green side of the ledger.
And Vista Group International was at the bottom of the leader board after its first-half result left a mixed taste in the mouths of analysts with revenue guidance pulled down to the bottom end of the band.
Big Red
The S&P/NZX 50 index climbed 67.54 points, or 0.5%, to 12,834.08, with 32 stocks gaining, 13 declining and five unchanged. Turnover was $110.4 million.
Westpac led the local benchmark index higher as it jumped 6.5% to $39.45 and was leading gainers on S&P/ASX 200 – which was up 0.6% in late trading – after reporting a 14% increase in June quarter net profit. ANZ Group Holdings rose 2.3% to $35.60 on the NZX, while ASX-listed National Australia Bank was up 2.5% in late trading.
CBA was the odd one out, falling for a second day after Wednesday’s annual result underlined the disconnect between its earnings and its lofty valuation.
Heartland Group Holdings was up a more muted 1.3% at 80 cents on the NZX.
Meanwhile, REINZ data showed house prices fell in July on a seasonally adjusted basis in their biggest decline since April last year, reaffirming the view that the local property market is still in the doldrums.
“These results point to a stagnant housing market, despite a cumulative 225 basis point reduction in the OCR and significant declines in mortgage interest rates to date,” said ASB Bank economist Yen Nguyen in a note, referring to the official cash rate. “With further support from lower interest rates, we expect that the housing market and other parts of the economy will continue to recover gradually, though at a slower pace than initially projected.”
Biding their time
New Zealand’s Reserve Bank is expected to cut the OCR a quarter-point to 3% when it reviews its policy next week. The kiwi dollar traded at 59.76 US cents at 5pm in Auckland from 59.57 cents yesterday.
Building materials firm Fletcher Building rose 1% to $3.08, while retirement village operators – whose occupation rights sales are linked to the property market – were mixed as Ryman Healthcare gained 1.3% to $2.37 and Summerset Group Holdings decreased 0.1% to $10.78. Oceania Healthcare increased 1.5% to 66 cents.
Gentrack jumped 6.1% to $9.78, clawing back some of its recent losses, after Origin Energy’s results across the Tasman showed the firm’s rival Kraken lifted contracted customer accounts 45% in the year to 74 million and was on track to hit 100 million customers earlier than expected.
Vista was the most heavily traded stock on a volume of 2.8 million, as it posted the biggest decline on the day, falling 3.3% to $3.20 after reporting a 39% increase in operating earnings and dialling back annual revenue guidance to the bottom end of its range.
Spark New Zealand fell 2.6% to $2.485 as investors minds turn to its upcoming result and what a long-term sustainable dividend will look like with the sale of three-quarters of its data centre business completed.
Tower fell 0.6% to $1.69 after Suncorp’s New Zealand general insurer lifted earnings 90% in the June year on price increases, lower reinsurance costs and relatively few major weather events. Insurance Australia Group’s NZ division lifted its insurance profit 32% and eked out a small gain in gross written premiums.
Reporting by Paul McBeth. Image from Curious News.
