However, the undershoot was partly a result of the participation rate dipping to 70.8% from 70.9%, BNZ economists said.
“It basically just reaffirms that the employment market is soft and is probably getting softer,” said Greg Smith, head of retail at Devon Funds.
“Even though the headline unemployment rate was, on the face of it, not too bad, it reinforces still relatively low business confidence, business investment intentions and employment intentions,” Smith said.
“We need support, and it has to be in the form of a decent rate cut at the end of this month [May 28] from the Reserve Bank.”
He said approval of the Contact-Manawa merger had “put a blowtorch” under Manawa‘s share price.
“There had been some doubt about whether it was going to proceed after the Commerce Commission expressed some concerns.”
The deal will make Contact the clear number two power generator – ahead of Mercury and behind Meridian.
It also gives Contact, which has large geothermal stations in the Central North Island, more versatility in its hydro-generating capability.
“It gives them optionality with respect to generation and more resilience to hydrological conditions across the broader market,” Smith said.
Infratil, which owns 51% of Manawa Energy, will end up with about 9.5% of Contact and cash proceeds of $186m as part of the deal.
The infrastructure investor closed 9.5c higher at $11.67.
Smith said Infratil had been firm on the back of top management buying shares in the company after it increased its holding in CDC Data Centres in February.
Market data showed $3.8m worth of shares had been bought by company insiders – including chief executive Jason Boyes – at $9.57 in April.
The data showed $13m worth of shares were bought by executives since February.
The stock had traded as low as $9.35 in early April.
Shares in Briscoe Group gained 12c to $4.44 despite reporting a 2.58% fall in sales over the first quarter, weighed down by weaker homeware sales.
Group managing director Rod Duke said the period had proved difficult and the company is targeting a first-half net profit after tax target of “around $30 million”.
“Briscoes has been quite resilient to the slowdown in the retail environment, so today’s update shows that even they aren‘t immune,” Smith said.
Sky City dropped 2c to $1.06 after falling sharply on Tuesday on the back of an earnings downgrade.
The company now expects June year earnings before interest, tax, depreciation and amortisation to fall to about 4% below the bottom of the current guidance range of $225 million to $245m.
In the big picture, Devon’s Smith said that on the major markets, it appeared there was more optimism that tariff wars would soon lessen in their intensity.
Chinese and US trade officials are due to meet this week.
“The major markets look to be getting some comfort from news that China and the United States would enter trade talks and the parties are looking to take a more conciliatory tone,” he said.
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.
