Salt Funds Management managing director Matt Goodson said it was hard to attribute the general rally to one specific factor.
“The US market was quite strong across the board last night and across most sectors on light volumes ... That has spilled over globally,” Goodson said.
“One theory was that global markets had been buoyed by the increasing probability of interest rate cuts in the US after weak employment figures were released last week.
“Market expectations are now pricing in a September rate cut, but that was also the case last Friday when that data came out. That’s probably about the only real thing that can be pointed out. Bad news is good news.”
The NZX
The general rally lifted many of the index’s big names, especially those with exposure to the US market.
Mainfreight picked up 2.38% and closed at $61.50. The stock lost about 10% last week after managing director Don Braid said at the freight and logistics firm’s annual meeting it had been a “slow and disappointing” start to the year.
Fisher & Paykel Healthcare, which has had a rollercoaster year, was up 3.24% to $36.94 on volumes exceeding $10m. The index’s largest constituent is still down about 3% for the year to date.
KMD Brands, which sells its Rip Curl and Oboz Footwear brands to customers in the US, was up 6.38% to 25c.
However, Goodson said he “wouldn’t read anything into that price move at all”.
“The thing with KMD is that equity is quite a small part of their capital structure now, relative to their debt, and particularly relative to their lease contracts.”
Infratil, another company that does business in the US via its Longroad Energy investment, gained 4.16% to $11.90. Goodson said the infrastructure investor’s price had been helped by a note by Morgan Stanley, which was “very bullish” on the data centre sector in Australasia.
Among other investments, Infratil has stakes in Longroad Energy in the US and in Canberra Data Centres in Australia.
Travelling in the other direction was Gentrack Group, which fell 3.36% to $9.78, worsening a tough run for the stock.
“It peaked at $14 back in late 2024 and it was almost $13 a month ago. But it seems to have had a lot of ‘fast-money-growth investors’ who are exiting, given they’ve missed out on one or two contracts to the competitor, Kraken,” Goodson said.
“It just illustrates how expectations and market valuations can change very quickly in growth zones like this. They have a lot of expectations priced into them.“
Goodson also highlighted New Zealand Rural Land Company, which climbed 4.3% to 97c after it told the market it would undertake a capital review.
Confession session over
Besides the news from across the Pacific giving the market a boost, Goodson said it had been a quiet day on the exchange.
“We’re almost through the confession session,” he said.
“We’re waiting for results season to really get under way for most New Zealand companies, which really kicks in in the third week of August.”
He said he thought investors would be watching for outlooks that are “less bad than the recent past”.
“Although, that said, the large caps in our market are not leveraged to our economy. The likes of Fisher & Paykel Healthcare, Infratil and Ebos have very little economic cyclicality to their businesses.”
In a Craigs Investment Partners note published on Monday, the investment house said the cyclical recovery was “under way”.
The analysts said the Reserve Bank of New Zealand’s rate cuts, which began in July last year, are finally starting to lift economic activity.
“With over half of all mortgages refinancing at lower rates in the second half of 2025, we expect to see further improvement in consumption.”
