New Zealand’s pace of inflation didn’t climb as fast as some economists feared in the June quarter, with local body rates a key driver in the annual lift, keeping alive hopes that the Reserve Bank will cut the official cash rate at next month’s review.
New Zealand’s S&P/NZX 50 index started off the week on an upbeat note as companies paying reliable dividends such as Vector and Precinct Properties NZ were among the daily winners after Statistics New Zealand’s inflation data were released.
Warehouse Group shares shrugged off the Commerce Commission’s filing of criminal charges against its Noel Leeming consumer electronics and appliances store over its promotion to match competitors’ prices.
And Bremworth is continuing on with a strategic review of its ownership structure under the new-ish board, with interested parties invited to submit proposals to the carpetmaker.
Quietly higher
The NZX50 climbed 81.11 points, or 0.6%, to 12,961.51, with 32 stocks gaining, 15 declining, and three unchanged. Turnover across the main board was a relatively quiet $85.2 million, with Japanese markets closed for the Marine Day public holiday.
Across the Tasman, Australia’s S&P/ASX 200 index sank 1.2% with the big four banks weighing on the benchmark as it eased from Friday’s record high.
Dual-listed Westpac Banking Corp posted the biggest decline on the NZX50, falling 3.4% to $36.10, while ANZ Group Holdings slipped 1.8% to $33.01. Heartland Group Holdings declined 1.3% to 79 cents.
Locally, Stats NZ figures showed the consumers price index rose 2.7% in the June quarter from a year earlier, a touch below the 2.8% expected by economists, who’d feared accelerating inflation might cause the Reserve Bank to stay its hand in cutting the official cash rate at next month’s policy review.
“Our core judgement is that the RBNZ will accommodate (or look through) the tick up in near-term overall CPI inflation as the weakening global outlook and the large margin of spare capacity implies a lower medium-term inflation outlook,” ASB Bank senior economist Mark Smith said in a note. “After earlier tapping the monetary policy brakes, the RBNZ is expected to press the accelerator and actively provide policy support.”
New Zealand’s two-year swap rate fell 6 basis points to 3.14%, while the kiwi dollar was unchanged at 59.51 US cents at 5pm in Auckland from last week.
Hunting income
Companies paying reliable dividends were among the main drivers on the NZX50, with lines company Vector advancing 2.1% to $4.40, commercial landlord Precinct climbing 2% to $1.255 and Auckland International Airport up 1.8% at $7.80. Spark New Zealand rose 1.8% to $2.575.
Kiwi Property Group was the most heavily traded stock on volume of 3 million, gaining 0.5% to 98 cents.
Retailers were mixed, with KMD Brands leading the NZX50 higher, rising 6% to 26.5 cents. Hallenstein Glasson Holdings slipped 0.1% to $8.52 while Briscoe Group and Michael Hill International were unchanged at $6.10 and 43.5 cents respectively.
Warehouse rose 1.2% to 82 cents, shrugging off the Commerce Commission charging the retailer’s Noel Leeming unit with breaching the fair trading act over its promise to match prices.
Bremworth rose 3.3% to 62 cents. After trading ended, the carpetmaker said it’s still working through the strategic review of its ownership structure, and has invited interested parties to make their bids.
And West Coast whisky maker Reefton Distilling Co has launched an equity crowdfunding on the Snowball Effect platform, seeking to raise up to $2 million to expand its production and storage. The liquor company has already raised $747,000 of the $1 million minimum it’s after.
Reporting by Paul McBeth. Image from Curious News.
