Market close: KMD Brands rises on strong sales data

KMD Brands, which owns Kathmandu, rose 5c or 4.76 per cent to $1.10. Photo / Supplied

The New Zealand sharemarket traded flat for the second day running – but encouragingly there was a strong signal that inflation may have peaked in the United States.

The S&P/NZX 50 Index closed at 11,230.55, down 8.58 points or 0.08 per cent with a late fall after reaching an intraday high of 11,290.09.

There were 63 gainers and 67 decliners on the main board with 32.08 million shares worth $125.95 million changing hands.

In the US, the producer price index – a measure of wholesale inflation – increased 0.2 per cent in October when analysts expected a 0.4 per cent rise. This follows a fall in the consumer price index – down from 8.2 per cent to 7.7 per cent - and sparked a big market rally.

A US commentator said the crumbs are being laid for a deceleration in the pace of monetary tightening heading into next year. But there will be trepidation at the Federal Reserve given their credibility concerns and desire to avoid the mistakes of the 1970s – stop, start policies that prolonged the inflationary period.

Dan Stratful, investment adviser with Forsyth Barr, said inflation may have turned the corner and that’s an important first step for the markets.

“It has been a tough year for the markets and they have been trying to stage a recovery. Lower inflation in the US will be a great help but we need to see whether that is sustainable. New Zealand’s inflation is likely to be more stubborn.

“There is also a question mark about corporate earnings and whether they will hold up into next year in a slowing economy,” Stratful said.

The local market remained tentative, with few major moves amongst the leading stocks, though a2 Milk has a renewed spring in its step, gaining 12c or 1.85 per cent to $6.59 – its highest level this year.

Infratil was up 19c or 2.26 per cent to $8.60; Summerset Group increased 14c to $9.69; Freightways collected 10c to $10.29; and Sanford added 7c to $4.27.

Fisher and Paykel Healthcare was down 26c to $19.34; Mainfreight continued to slide, falling $1.05 to $69; and Heartland Group declined 5c or 2.81 per cent to $1.73.

In the energy sector, Meridian was down 11c or 2.36 per cent to $4.55, Mercury declined 8c to $5.31; Vector decreased 5c to $4.20; Manawa shed 7c to $5.03; and Contact was up 5c to $7.55.

KMD Brands was up 5c or 4.76 per cent to $1.10 after reporting strong sales growth in the first quarter of its 2023 financial year. Group sales were 61.8 per cent above the previous corresponding period and 7.5 per cent ahead of the pre-Covid first quarter in 2020. Operating profit improved by nearly $30m.

Fellow retailers perked up. Hallenstein Glasson gained 13c or 2.45 per cent to $5.44; The Warehouse increased 4c to $3.05; and Briscoe Group collected 4c to $5.05.

Napier Port increased 6c or 2.14 per cent to $2.86 after reporting an 11.8 per cent fall in net profit to $20.42m on revenue of $114.52m, up 4.6 per cent, for the 12 months ending September.

Total cargo reached 5.39m tonnes, 8.1 per cent down on the record 5.87m tonnes last year, with container volumes declining 7.9 per cent to 254,000 TEUS (20-foot equivalent units) and bulk cargo down 7.6 per cent to 3.6m tonnes. Napier is paying a final dividend of 4.7c a share on December 15.

Other gainers were Pacific Edge up 1.5c or 3.13 per cent to 49.5c; Tower increasing 1.5c or 2.27 per cent to $67.5c; Bremworth adding 1.5c or 3.26 per cent to 47.5c; NZX collecting 3c or 2.48 per cent to $1.24; Private Land and Property up 3c or 2.38 per cent to $1.29; and Rua Bioscience rising 1.5c or 6.52 per cent to 24.5c.

Bulk retail property owner Investore, unchanged at $1.48, reported a net loss of $27.68m on rental income of $30.21m, up 7.81 per cent, for the six months ending September.

Investore’s loss came from a net $42.7m decrease in the latest valuation of its portfolio, now worth $1.2 billion, with 44 properties and 142 tenants. Its operating earnings increased 15 per cent to $17.7m and Investore is paying an interim dividend of 1.975c a share on December 1.

Stratful said Investore’s 3.5 per cent valuation decrease is the start of a cycle for property companies. “Kiwi Property was the first to report a drop in valuation and the revaluations will flow through to reduced net tangible assets. Industrial property should not be as hard hit.

“Whether the property companies’ share prices will be affected is debatable as they have already moved down substantially in anticipation of the revaluation,” he said.

Precinct Properties was down 3c or 2.44 per cent to $1.20, and Property for Industry decreased 2.5c to $2.37.

T&G Global slipped a further 7c or 2.64 per cent to $2.58; Eroad shed 4c or 2.86 per cent to $1.36; Vista Group declined 3c or 1.9 per cent to $1.55; Smartpay was down 2c or 2.11 per cent to 93c; and Enprise Group fell 6.4c or 6.31 per cent to 95c.