“A 25-basis-point cut is pretty much locked in, and we’re now looking at a 30% to 40% probability of a 50-basis-point cut,” Smith said.
“We are starting to get a little bit of suggestion from data prints and company announcements that the New Zealand economy is starting to bottom out. If we are at the bottom economy-wise or coming off the bottom, then that’s good for cyclical companies.”
Synlait Milk’s share price rallied after its full-year result, rising 15.71% or 11c to 81c after 958,873 shares changed hands on turnover worth $783,828.90.
Key to the response was news the business could soon become debt-free after the sale of its state-of-the-art factory at Pōkeno to Chicago-based Abbott for $307m.
The business reduced its debt over the year by 55%, dropping from $551.6m to $250.7m. Synlait also cut its net loss to $39.82m in the July 31 year, down from $182.11m a year earlier.
“It’s encouraging that they’ve been able to reach a deal to sell loss-making assets. It seems to be seen as a relatively decent price that they’ve received,” Smith said
Synlait is the sole supplier of infant formula to a2 Milk, whose share price rose 0.42% or 4c to $9.66.
The Fonterra Shareholder Fund also got a boost from the Synlait result, lifting 4c to $7.95 per unit.
Elsewhere, Infratil had another positive day with its share price climbing 1.56% or 19c to $12.39.
Mainfreight’s share price also rose, up 0.91% or 57c to $62.87 after 80,839 shares traded on turnover worth $5.08m, and Freightways’ was up 24c to $13.49.
Meanwhile, shares in Ebos Group fell late in the day, dropping 40c to $29.60 on turnover worth $5.83m.
Smith said investors should look out for the Reserve Bank of Australia’s meeting on Tuesday, although he noted the market was not predicting another cut.
Most Asian markets rose Monday, tracking gains on Wall Street, after US inflation figures that met expectations and soothed concerns about US President Donald Trump’s latest tariff salvo.
However, investors were keeping a wary eye on Washington, where lawmakers have failed to reach a funding compromise to keep the Government running, which observers say could affect the release of key data.
All three main indexes in New York ended in the green Friday, snapping three straight losses after news the Federal Reserve’s preferred gauge of inflation rose in line with expectations, giving the bank room to cut interest rates again.
While the 2.7% reading on the August personal consumption expenditures index was up from 2.6% in July and well above the Fed’s 2% target, policymakers are focusing on supporting the labour market after a string of weak jobs readings.
The cut earlier this month, the first since December, came as a closely watched guide indicated two more were in the pipeline before January.
– Additional reporting AFP
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
