The US March consumer price index (CPI), released overnight, should wake up the market. Inflation is expected to fall further, with economists predicting a CPI monthly rise of 0.2 per cent compared with 0.4 per cent in February.
After that, the health of the US economy and consumers will be put to the test as the first-quarter corporate earnings season gets underway.
Goodson said the March CPI would be a key focal point for markets as they get to grips with where the Federal Reserve cash rate would peak. The Fed is meeting again next month.
At home, telecommunications provider Chorus was up 10c to $8.55. In an intriguing notice to the market, Chorus said the Crown had given approval for Australian superannuation fund UniSuper to acquire up to 20 per cent of Chorus should it choose to in the future.
UniSuper, which increased its shareholding in Chorus from 7.5 per cent to 8.5 per cent in December, has $100 billion in assets, 450,000 members and concentrates on the higher education and research sector in Australia.
Goodson said Chorus fitted into the long-term desires of super funds, and the question was whether Chorus could earn its regulated rate of return in the face of wireless broadband competition.
“Spark and One NZ (formerly Vodafone) provide their own infrastructure and keep the full margins,” he said. “What can Chorus charge while losing market share in wireless broadband?”
Ventia Services Group rose 14c or 5.07 per cent to $2.90 after telling the market it had a new contract, worth $280m over the next two and a half years, with government corporation NBN Co, Australia’s wholesale broadband provider. Ventia will provide fibre connections on the NBN fixed line network for an additional 1.5 million premises.
Market leaders Fisher and Paykel Healthcare and Meridian led the market higher, gaining 18c to $26.91 and 17.5c or 3.41 per cent to $5.30 respectively.
Mainfreight increased $1 to $70.45; Infratil was up 19c or 2.07 per cent to $9.35; a2 Milk added 9c to $6.24; and Genesis Energy collected 5.5c or 2.02 per cent to $2.775.
In the port sector, South Port NZ was up 14c or 1.87 per cent to $7.64; Port of Tauranga gained 4c to $6.31; Napier Port was down 10c or 3.7 per cent to $2.60; and Marsden Maritime declined 3c to $5.19.
Automation specialist Scott Technology surged 23c or 8.3 per cent to $3 after reporting an impressive first-half financial result. Net profit increased 65 per cent to $7.82m on revenue of $126.89m, up 11 per cent, for the six months ending February. Dunedin-based Scott is paying an interim dividend of 4c a share on May 11.
Scott’s margins increased from 22 per cent to 26 per cent despite inflationary and supply chain pressures, and operating earnings (ebitda) were up 20 per cent to $15m.
Scott said its world-leading production technology in the core meat, materials handling and logistics and mining sectors delivered 77 per cent of revenue and 92 per cent of margin.
Other gainers were NZME up 3c or 2.91 per cent to $1.06; Michael Hill increasing 4c or 3.81 per cent to $1.09; and Steel & Tube adding 3c or 2.8 per cent to $1.10.
Ebos Group was down 64c to $45; Restaurant Brands decreased 33c or 4.8 per cent to $6.55; Serko shed 5c or 2.33 per cent to $2.10; Eroad declined 2c or 3.33 per cent to 58c; Green Cross Health was down 45c or 2.37 per cent to $1.65; and NZ Automotive Investments fell 2.5c or 8.62 per cent to 26.5c.
Financial technology company PaySauce was up 1c or 3.7 per cent to 28c after telling the market that recurring revenue increased 56 per cent to $1.63m in the March quarter, and annual revenue rose 50 per cent to $6.7m. Processing fee revenue was up 27 per cent to $1.23m.
The Carbon Fund has been making a strong recovery from weaker wholesale prices, rising 6c or 3.26 per cent to $1.90. It is now trading at its net tangible assets value after being below it. “There has been concern and confusion over the Government’s policy for the carbon emissions sector,” Goodson said.
