IkeGPS had the largest rise on New Zealand's stock market after signing contracts worth $26 million, while real estate stocks struggled after the Reserve Bank Australia hiked its target cash rate from 0.1% to 0.35% – surpassing nervous investors expectations.
The S&P/NZX 50 index fell 108.439 points, or 0.9%, to 11,675.92. Within the broader equity market, 49 stocks rose, 92 fell and turnover was $112m.
Utility pole management company IkeGPS had a wonderful day, jumping up to nab the top spot on the main board when trading opened and staying there for the whole day. The stock was up 20% around midday before ending the day up 16% at 87 cents.
This followed the company's announcement this morning it had signed contracts worth $26m in the year ended March, which will add between $15m and $17m to 2023 financial year revenue, largely matching its forecast revenue for the entire 2022 year.
Peter McIntyre, an investment adviser at Craigs Investment Partners, said the news had been “strong for Ike” and the company was “definitely going to see some profit” from today’s rapid rise.
Latest NZX data (market currently closed)
|DGL Group||$0.230||8.16 %|
|Pacific Edge||$0.040||5.88 %|
|Marlin Global||$0.060||5.50 %|
|Vital Healthcare Property Trust||$0.130||4.89 %|
|Evolve Education Group||$-0.030||-4.05 %|
|Marlborough Wine Estates Group||$-0.005||-2.94 %|
|Scott Technology||$-0.080||-2.68 %|
Eroad posted the day's biggest gain on the benchmark index, up 4.1% at $3.33.
Other stocks that did well today were rubber products company Skellerup, up 3.5% at $5.70, recovering some of the prior day's 3.6% decline. Chatham Rock Phosphate was also up, having jumped 3.5% to 30 cents.
Fonterra Shareholders' Fund units were up 1.4% to $2.84 ahead of the dairy giant’s overnight global dairy trade and electricity company Trustpower was up 1.5% to $7, having sold its retail book to Mercury NZ and ahead of its name change to Manawa Energy on Thursday.
Bad day for some
Transport and logistics group Move Logistics had one of the biggest losses on the main board today, down 7.8% at $1.30.
This came after it told the market it expects underlying earnings to be between $53m and $56m in the 12-months ended June, falling short of an earlier forecast to match the prior year's $61.3m.
Move said disrupted supply chains prevented it from deploying new trucks, forcing it to spend more on maintaining old vehicles.
Craigs' McIntyre said the company faced a lot of struggles over the past two years which was why the update was “more on the negative side”.
Air New Zealand shares finished the day down 0.6% at 87 cents ahead of a shortfall bookbuild, in which shares unclaimed during the capital raise will be auctioned to investors overnight.
Rival Qantas Airways said underlying travel demand was strong, and the Australian airline will go ahead with its Project Sunrise – direct flights to New York – in late 2025.
Financial services company JP Morgan raised its target price on the ASX-listed stock from A$5.95 to A$6.40, citing better than expected demand in both leisure and corporate travel, but that sentiment didn't travel across the Tasman to buoy Air NZ.
It was a gnarly day for real estate despite government statistics showing new housing consents hit a record 50,858 for the 12 months to March.
Craigs' McIntyre said real estate had been the “worst-performing stocks on the index today” thanks to interest rates currently being at the front of investors' minds, with the RBA's bigger rate hike than expected.
Argosy Property led the benchmark index lower, falling 3.4% to $1.28, Kiwi Property Group fell 2.8% to $1.025 and Goodman Property Trust also down 2.2% to $2.18.
Other property companies such as Investore Property fell 0.6% to $1.63 and Vital Healthcare Property Trust was down 1.1% at $3.
Precinct Properties fell 0.3% to $1.47.
RBA beats to its tune
The RBA’s interest rate decision has been on investors' minds for the past few weeks and this came to a head today when the central bank hiked the target cash rate from 0.1% to 0.35% – higher than market expectations of a 15 basis point increase to 0.25%.
Peter Esho, co-founder of Wealthi, an Australian investment property platform, said today’s rate rise was slightly higher than expected but the RBA had been “late to the game again” when it came to hiking rates.
“There’s even a hint of panic now with the central bank feeling like it went overboard when cutting rates to as low as they have been over the past two years,” he said.
The NZ dollar fell to a pre-pandemic low against its Australian counterpart, falling as low as 90.37 Australian cents from 91 cents immediately before the announcement.
The NZ dollar was trading at 64.62 US cents at 3pm in Wellington, from 64.65 cents yesterday, and near a two-year low against its US counterpart having slid from 69.71 cents at the end of March.
McIntyre said investors were shying away from commodity currencies such as the kiwi and the Aussie, favouring the relative safety of the greenback.
“The USD has always seemed to be the currency of choice or the currency to go to in terms of volatility,” he said.
“So we're seeing more investors back towards the US dollar just because of its size and it's seen as much more of a safe haven.”