Market close: Re-energised stocks continue upward climb

Spark was one of the few decliners, falling 6c to $5.01 after telling shareholders at the annual meeting that trading was steady. Photo / NZME

The re-energised New Zealand sharemarket made another significant gain on a lively day featuring a $150 million takeover offer for MHM Automation, one of the country’s oldest engineering companies.

The S&P/NZX 50 Index traded steadily in the afternoon, though it did dip slightly when NZ First and its leader Winston Peters joined the coalition negotiations to form a new Government after the wrap-up of special votes.

The index closed at 11,118.92, up 74.48 points or 0.67 per cent and gained 3.24 per cent for the week after four successive days of rises. It was the best week of trading since early July last year.

The index has now fallen almost 3 per cent this year, an improvement from the decline of 6.2 per cent at the end of last week.

There were 100 gainers and 32 decliners over the whole market, with 26.16 million shares worth $69.12 million changing hands.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said the market was again driven by the fall in bond yields, and the move by the US Federal Reserve to keep its funds rate on hold.

“We have a yield-sensitive market and any indication of interest rates falling is pleasing,” Sullivan said. “Some people in the US are expecting three rate cuts next year but the Fed has commented it is not even thinking of cuts.

“The Fed is well aware the market would take off with any [reduction] signal and possibly reignite inflation.”

Even so, Wall Street had another strong day with Dow Jones Industrial Average increasing 1.7 per cent to 33,839.08 points; S&P 500 rising 1.89 per cent to 4317.78; and Nasdaq Composite up 1.78 per cent to 13,294.19. The three indices were on track for gains of around 5 per cent for the week.

MHM Automation, which was started in Christchurch in 1884 by James Mercer, surged 61c or 67.03 per cent to $1.52 after receiving the takeover offer from Ohio-based American company Bettcher Industries.

The offer, backed by the MHM non-conflicted directors, is $1.70 a share, a premium of 86.8 per cent on the closing price the day before. Both companies are leading manufacturers of automated equipment for food processing plants.

Mainfreight was up a further 90c to $61, jumping from $56.30 in a week. Fisher and Paykel Healthcare rebounded a further 40c or 1.86 per cent to $21.90. Port of Tauranga recovered 7c to $5.15.

Freightways was up 8c to $7.88; a2 Milk gained 6c to $4.33; Heartland Group added 3c or 1.9 per cent to $1.61; Manawa Energy collected 8c or 1.9 per cent to $4.30 and Scales Corp increased 16c or 5.44 per cent to $3.10.

Retailers KMD Brands increased 4c or 4.82 per cent to 87c and The Warehouse was up 4c or 2.3 per cent to $1.78.

Other gainers were Turners Automotive, up 8c or 1.96 per cent to $4.17; Property for Industry increasing 5c or 2.35 per cent to $2.18; Arvida Group collecting 5c or 4.55 per cent to $1.15; Tourism Holdings rising 20c or 5.97 per cent to $3.55; and ikeGPS up 3c or 5.45 per cent to 58c.

Telco Spark was down 6c to $5.01 after telling shareholders at the annual meeting that trading was steady. Mobile revenue continues to grow strongly, broadband and cloud margins have stabilised and voice margin continues to decline.

Spark confirmed full-year operating earnings (ebitdai) guidance at $1.215 billion to $1.26b compared with $1.193b in the 2023 financial year. The dividend is expected to slightly increase to 27.5c a share. Spark is investing $250m to $300m into data centres, a market which is expected to rapidly expand.

Technology companies Serko fell 20c or 4.71 per cent to $4.05; Eroad gained 2c or 2.99 per cent to 69c; and Smartpay increased 6.5c or 4.55 per cent to $1.495.

Burger Fuel fell 4c or 13.11 per cent to 26.5c and 2 Cheap Cars was also down 4c or 5.71 per cent to 66c.

Channel Infrastructure, up 1c to $1.46, completed its $100m six-year bonds offer at an interest rate of 6.75 per cent.