New Zealand shares gained as the dollar sank following the official cash rate update, with Pushpay Holdings recovering from recent selling and SkyCity Entertainment Group continuing to gain.
The S&P/NZX50 Index rose 68.1 points, or 0.77 per cent, to 8,940.19. Within the index, 33 stocks rose, nine fell and eight were unchanged. Turnover was $95 million.
This morning, Reserve Bank governor Adrian Orr kept the official cash rate at 1.75 per cent. That was widely expected, but Orr also said he now expects to keep rates on hold into 2020, at least a year longer than previously thought, and reiterated the next move could be up or down.
"The RB statement was certainly one of the key focal points of the day and it has seen the currency weaken quite sharply against the US and Australian dollars, and an element of the market today is that, although not entirely - there's a randomness in order flow driving some of it," said Matt Goodson, managing director at Salt Funds Management.
"Certainly names that do tend to move on a Kiwi/Aussie dollar have moved, like Fletcher Building and other names with offshore earnings - Fisher and Paykel Healthcare is up, Pushpay is up after a few very weak days, NZ Refining is a big beneficiary of a weaker kiwi dollar."
Pushpay Holdings - which operates in the US, where its payment app targets the church giving sector - was the best performer, up 3.1 per cent to $3.64. Fletcher Building rose 2.4 per cent to $6.98, New Zealand Refining rose 2.1 per cent to $2.48 and Fisher & Paykel Healthcare gained 1 per cent to $14.77.
However, other stocks which can benefit from a weaker New Zealand dollar didn't reap such benefits, with Sanford up 0.4 per cent to $7.71 and Scales Corp down 0.4 per cent to $4.57.
SkyCity Entertainment Group rose 2.2 per cent to $4.17, its second day of gains after yesterday when it increased full-year earnings more than forecast as its high-roller business recovered and its flagship Auckland casino improved. It expects "modest growth" in earnings in the current financial year.
"It was fractionally better than expected, but the fact they met their numbers and expectations has seen that move," Goodson said.
"The focus of the market is whether they can stimulate growth in Auckland once the convention centre is completed, and in Adelaide - the issue for Skycity is it has been ex-growth for the past couple of years."
Fonterra Shareholders Fund was in a trading halt at $5.11. Fonterra Cooperative Group's 2018 earnings may differ from its previous guidance, the country's dominant dairy company said today. Its securities trading on the NZX and ASX have been halted while it crunches the numbers, with an update expected by the end of tomorrow.
In May, the company cut its forecast dividend for the 2018 year to a range of 15-20 cents a share, from a previous forecast of 25-35 cents, while its normalised earning per share guidance was lowered to a range of 25-30 cents. That was after it posted a first-half net loss of $348m.
"To go into a trading halt suggests it must be material, and what they've stated is there may be a variation of earnings, so one can only assume a material earnings downgrade," Goodson said.
"The focus for unitholders will be the mix of earnings that go to FSF as opposed to the farmers' payment, particularly if there's a chunky downgrade."
Kathmandu Holdings was the worst performer, down 1.6 per cent to $2.09, while Gentrack Group declined 1.3 per cent to $6.73.
Vital Healthcare Property Trust dropped 1.2 per cent to $2.13. It saw adjusted earnings grow in 2018 as it continued to invest and expand throughout New Zealand and Australia.
In early May, Vital's manager NorthWest Healthcare Properties bought a 10.1 per cent interest in ASX-listed Healthscope, Australia's second-largest private hospital operator, acquiring 176.1 million shares through a derivative transaction at A$2.39 ($2.66) per share. Vital said today it has incurred $3.6m in strategic transaction costs towards acquiring that Healthscope interest.
"The result itself was largely as expected, but quite a few questions about their involvement with their parent Northwestern Properties and ownership of a 10 per cent stake in Healthscope," Goodson said.
"That's held through quite a complex derivatives structure and so there are some questions around the potential impact of that, especially given the Healthscope share price has fallen somewhat since they bought in. It will be a focus for the market from here."
Outside the benchmark index, Hallenstein Glasson Holdings was unchanged at $5.53. It says annual profit rose about 58 per cent, outpacing sales growth and after the clothing chain sold its Storm brand. The retailer will make a full earnings statement on September 28.