Market close: Solid company results do little to move wary market

Ebos Group, a wholesaler and distributor of healthcare products, dominated the day's trading and fell 6c to $40.44. Photo / 123RF

The New Zealand sharemarket traded flat and investors were showing signs of wariness despite solid financial results from utilities investor Infratil and seafood exporter Sanford.

The S&P/NZX 50 Index closed a choppy session with a very small gain of 7.16 points or 0.06 per cent to 11,239.14, after reaching an intraday high of 11,277.63.

There were 59 gainers and 67 decliners over the whole market on improved volume of 41.79 million share transactions worth $151.67 million. Ebos Group, down 6c to $40.44, dominated the day’s trading with $16.13m worth of its shares changing hands.

Shane Solly, portfolio manager with Harbour Asset Management, said markets were being a bit wary as US Federal Reserve open market committee (FOMC) members come out with a heady mix of comments on the direction of inflation and interest rates.

“We are cracking into our reporting season and investors are watching out for earnings risks in a slowing economy. The Sanford result was better than expected and there was something for everyone with Infratil,” he said.

Next off the reporting cab are Investore and Napier Port, with Ryman Healthcare and My Food Bag following on Friday.

FOMC members will be providing their “view of the world” all week, and the major US indices weakened. Federal Reserve vice chair Lael Brainard indicated the central bank could soon slow the pace of its interest rate rises, while Fed governor Christopher Waller said the endpoint of the slowing remains “a ways off”.

ANZ Research expects the Reserve Bank to increase the official cash rate (OCR) 75 basis points to 4.25 per cent next week, saying the bank has already proven it is not afraid to go its own way and the global tilt towards slower hikes is unlikely to play a significant part in the decision.

“We are forecasting the OCR to peak at 5 per cent via another 75 basis points hike in February on a let’s just get it done basis,” ANZ said

Utilities investor Infratil was up 2c to $8.41 after reporting a 50.7 per cent increase in net profit to $557.3m on operating revenue of $951m, up 47.7 per cent, for the six months ending September. It is paying an interim dividend of 6.75c a share on December 14.

Infratil narrowed its full-year operating earnings (ebitdaf) to $510m-$540m, from $510m-$550m, with key contributions from its substantial shareholdings in CDC Data Centres, Vodafone, Manawa Energy and Diagnostic Imagining. Ebitdaf for the six months was $275.6m, up 11 per cent.

The energy sector underpinned the market, with Meridian – the biggest stock on market capitalisation – up 5c to $4.66; Contact gaining 15c or 2.04 per cent to $7.50; Vector adding 5c to $4.25; and Manawa increasing 10c or 2 per cent to $5.10. Genesis, however, was down 5.5c of 1.99 per cent to $2.715.

Sanford, unchanged at $4.20, reported a 244.53 per cent rise in net profit to $55.77m on revenue of $531.88m, up 8.63 per cent, for the 12 months ending September. The profit was boosted by the sale of its crayfish quota in April and stronger pricing, particularly with whitefish. Sanford is paying a final dividend of 10c a share on December 9.

Synlait recovered 7c or 2.41 per cent to $2.97, and a2 Milk was up 5c to $6.47. Solly said a2 Milk’s annual meeting on Friday is keenly anticipated as investors find out how the November 11 Singles Day shopping went and get a sense of the latest demand in China.

Other gainers were Fletcher Building, up 10c or 2 per cent to $5.11; Restaurant Brands increasing 11c to $7.22; Foley Wines adding 3c or 2.22 per cent to $1.38; and Smartpay collecting 4c or 4.4 per cent to 95c.

NZX gained 3c or 2.54 per cent to $1.21; hospitality group Savor was up 1.5c or 3.75 per cent to 41.5c; and Pacific Edge rebounded 2.5c or 5.49 per cent to 48c.

T&G Global was down 2c to $2.65 after alerting the market that it will likely have a loss before income tax of $1m-$5m for the 2022 financial year. This compares with a profit of $9.8m last year.

The fresh produce grower and exporter is holding a higher-than-normal inventory at this stage of the year as a result of the rapid deterioration in the quality of premium Envy apples hit by heavy rains during the latest harvest. There will be fewer sales in Europe and UK because of the worsening economic conditions.

Fellow apple exporter Scales Corp was down 17c or 3.56 per cent to $4.60.

Mainfreight fell $2.47 or 3.41 per cent to $70.;05; Skellerup Holdings decreased 17c or 3.05 per cent to $5.40; Tourism Holdings was down 8c or 2.18 per cent to $3.59; Kiwi Property shed 2.5c or 2.81 per cent to 86.5; Accordant Group declined 5c or 2.7 per cent to $1.80; and Rakon was down 4c or 3.1 per cent to $1.25.