Market close: NZ stocks continue to rally but still a ‘tough winter to get through’

Fletcher Building continued its strong run, rising 10c or 1.88 per cent to $5.42 after sitting at $4.24 on March 20. Photo / Supplied

The New Zealand sharemarket continued its broad-based rally with a near one per cent rise, and utilities investor Infratil was quickly back to an all-time high.

The S&P/NZX 50 Index followed the same pattern as the previous two days – down in the morning to a low of 11,704.37 and up in the afternoon, closing with a gain of 108.35 points or 0.92 per cent to 11,916.47.

The index was up 1.53 per cent for the week and has now increased nearly 3.9 per cent for the year.

There were 88 gainers and 37 decliners over the whole market on volumes of 50.92 million transactions worth $176.09 million.

Shane Solly, portfolio manager with Harbour Asset Management, said the latest business and consumer confidence surveys have come off their lows, and inflation indicators are starting to fall.

“People are now talking about a soft landing to the economy without causing mass disruptions or layoffs but we still have a tough winter to get through,” Solly said.

“Some of the listed companies are doing better than expected and that’s what is grinding through the capital markets. We’ve seen a good old rally in the last few days with some good dividends being paid out, and that’s helped.

“New Zealand has under-performed global markets because we don’t have the depth of technology stocks, but perhaps a little bit of KiwiSaver money has been coming in before the end of June,” Solly said.

The ANZ-Roy Morgan Consumer Confidence Index showed an improvement, lifting six points in June to 85.5, still a very low level but the highest since January last year.

ANZ said the overall level of confidence remains very subdued. While job security is still excellent and wage growth historically strong, ongoing cost of living increases continue to bite.

In the United States, the Dow Jones Industrial Average was up 0.8 per cent to 34,122.42 points with a rally in the banking sector, while the Nasdaq Composite was flat.

The US Commerce Department’s final estimate of first-quarter gross domestic product rose to 2 per cent, higher than the market consensus of 1.4 per cent, and consumer spending rose 4.2 per cent, the highest pace since the second quarter of 2021.

Commentators said while the economy remains resilient it also strengthens the case for further tightening by the Federal Reserve. The Fed reported that all 23 banking institutions included it its annual stress test are well capitalised to weather a downturn.

At home, Infratil increased 16.5c to $10.15, surpassing its previous high of $10.10 set on June 7.

Because of strong shareholder interest, Infratil completed a bigger-than-expected retail offer of $185m (instead of $100m) at $9.20 a share. Including the institutional placement, Infratil raised a total of $935m and some of it will be used to purchase an additional 49.95 per cent in One New Zealand (formerly Vodafone) for $1.18b.

Solly said Infratil had a well-supported capital raise and seeing the stock back up over $10 so quickly is a stunning performance.

Ventia Services, with its latest Australian Defence Department maintenance contract in the bag, neared its high after rising 7c or 2.15 per cent to $3.32. Ventia reached $3.34 on September 13 last year after listing in November 2021.

The energy sector again showed strength, with Meridian up 7c to $5.60; Contact increasing 12c to $8.10; Genesis adding 2c to $2.73; and Manawa gaining 6c to $4.95.

Vector, up 2c to $4.01, has completed the sale of 50 per cent of its New Zealand and Australia metering business to QIC Private Private Capital and will receive about $1.74 billion.

Fletcher Building continued its strong run, rising 10c or 1.88 per cent to $5.42 after sitting at $4.24 on March 20. Mainfreight was up $1.01 to $72; Heartland Group gained 4c or 2.41 per cent to $1.70; and Scott Technology increased 10c or 3.28 per cent to $3.15.

Port of Tauranga collected 9c to $6.24; Skellerup recovered 17c or 3.85 per cent to $4.59; Hallenstein Glasson was up 24c or 4.07 per cent to $6.14; SkyCity Entertainment gained 5c or 2.24 per cent to $2.28; and Sky TV increased 9c or 3.83 per cent to $2.44.

Technology stocks Serko rose 10c or 2.74 per cent to $3.75; Vista Group was up 9c or 5.49 per cent to $1.73; and Smartpay Holdings increased 8.5c or 4.76 per cent to $1.87.

In the retirement sector, Ryman Healthcare was up 5c to $6.58; Arvida Group rose 6c or 5 per cent to $1.26; Summerset Group was down 13c to $9.59; and Oceania Healthcare declined 1c to 77c.

Seeka, down 4c to $2.61, has refinanced its $201m banking facility into a sustainability linked loan through to the end of January 2026. Seeka will pay a lower interest rate for achieving its sustainability targets such as reducing greenhouse gas emissions.

PGG Wrightson gained 1c to $4.09. The established rural services company told the market that its chair Lee Joo Hai has been charged in Singapore under securities regulation disclosure requirements related to Singaporean-listed Hyflux of which Lee is a director.

Lee will continue as a director and chair of PGG as the board considers the charges and investigations do not compromise his performance in relation to the New Zealand company.