The New Zealand sharemarket found no surprises with Budget 2021 and staged a strong rally, rising more than 1 per cent after a torrid 4 per cent sell-off over the past 10 days.
The S&P/NZX 50 Index was solid all afternoon while the Government's latest Budget was being delivered, closing at 12,437.17 – up 155.66 points or 1.27 per cent. There were 75 gainers and 61 decliners over the whole market on volume of 46.54 million share transactions worth $171.64 million.
Matt Goodson, managing director of Salt Funds Management, said there were no shocks and the market wasn't really moved by the Budget.
"The increase in benefit payments will be slightly inflationary and this will be potentially beneficial for some listed companies as no doubt the extra money will be spent through the economy rather be saved," he said.
The Government is spending nearly $1 billion on increasing weekly benefit rates by between $32 and $55 per adult in July and next April. The market was also greeted with the news unemployment would fall to 4.4 per cent by June 2025, economic growth would also reach 4.4 per cent in 2023, and the next surplus is expected in 2027 at 0.1 per cent of gross domestic product.
Goodson said the markets here and in Australia had been sold off hard and they have reversed that.
"A bit of money has been put to work in the markets across Australasia."
At 5.45pm (NZ time), the S&P/ASX 200 Index was up 1.31 per cent to 7022.30 points.
Back home, market leader Fisher and Paykel Healthcare gained 57c to $33.12 on trade worth $31.25m; Ebos Group rose $1.01 or 3.26 per cent to $32.01; Chorus increased 18c or 2.88 per cent to $6.44; and the milk companies made recoveries – a2 Milk up 16c or 2.91 per cent to $5.66 and Synlait picking up 18c or 6.25 per cent to $3.06.
Mercury Energy picked up the ground it lost the day before, rising 26c or 4.15 per cent to $6.53; Contact was up 14c or 186 per cent to $7.68; Meridian increased 11c or 2.11 per cent to $5.32; Infratil climbed 22c or 3.02 per cent to $7.51; Comvita jumped 12c or 3.79 per cent to $3.29; and Serko gained 20c or 3.2 per cent to $6.45.
Contact held its Capital Markets Day in Taupō, and the market pricked up its ears at the forecast the carbon price would increase from $37 a tonne to $70-$80 a tonne by 2025.
"That's when it becomes viable to switch from coal to electricity for boilers," Goodson said.
The market had also chewed over Infratil's annual result.
"The guidance on its key growth asset CDC data centres looked a touch light, but analysts met with the company and all was forgiven," Goodson said.
Retirement village operators Summerset Group Holdings was up 9c to $12.63, while Ryman Healthcare – announcing its latest financial result Friday - fell 21c to $14.39. Goodson said the result, and particularly its balance sheet, will be closely watched to see if Ryman's debt-to-equity is starting to get up.
There are also rumours that cost pressures are coming into the retirement village sector. The companies employ entry-level staff being paid an increased minimum wage.
Auckland International Airport chief executive Adrian Littlewood is stepping down after nine years at the helm. Its share price rose 21.5c or 2.93 per cent to $7.55. Air New Zealand was up 5c or 3.03 per cent to $1.70.
South Port New Zealand, which is applying to deepen the entrance channel and harbour to 10.7m at Bluff, fell 6c to $8.69. Fellow port companies Port of Tauranga was down 10c to $7.31; Marsden Maritime Holdings gained 7c to $6.10; and Napier Port increased 2c to $3.28. Personal lender Harmoney fell 6c or 3.31 per cent to $1.75.
Mobile consumer engagement company Plexure Group plunged 11c or 14.47 per cent to 65c after reporting a net loss of $7.93m, a fall from a profit of $1m, for the year ending March. Its revenue from existing customers increased 15 per cent to $29.15m, and its platform is used by 224m people in 64 countries, including McDonald's.
Sky Network Television has renewed its multi-year partnership with global sports broadcaster ESPN, and its share price slipped 0.002c to 17.2c.
MHM Automation, which supplies systems for the global food processing and logistics sectors, upgraded its operating earnings (ebitda) forecast to at least $3.5m for the 2021 financial year ending June, compared with $2.4m last year, and its share price increased 2c or 3.23 per cent to 64c.