New Zealand’s benchmark stock index drifted lower in quiet trading, snapping four days of gains and sitting out a global rally ahead of US President-elect Donald Trump’s pending inauguration.
The S&P/NZX 50 index fell 42.12 points, to 0.3% to 13,088.31, ignoring gains across the Tasman and throughout most of Asia as investors prepare for a flurry of announcements from the White House once Trump is back in the Oval Office.
The kiwi dollar clawed back some of its losses on Friday, trading at 56.12 US cents at 5pm in Auckland from 55.85 cents at 7am and 56.04 cents last week.
Local trading was relatively quiet, with a turnover of just $59.6 million across the main board, with Wellington on holiday for its regional anniversary, and Spark New Zealand the only company to trade on a volume of more than a million shares, as it gained 1% to $3.03.
KMD Brands led the benchmark index lower, slumping 8.1% to 40 cents, with retailers broadly weaker on the day. Michael Hill International declined 3.2% to 60 cents and The Warehouse Group declined 1.9% to $1.01, while Briscoe Group fell 1% to $4.80 and Hallenstein Glasson was unchanged at $8.10.
Statistics New Zealand is due to release spending on credit and debit cards for December on Tuesday, which Westpac NZ economists anticipate will show a gradual resumption in growth.
“We expect the recovery in spending levels will resume in December but is likely to remain gradual,” Westpac NZ’s economists said in a note. “We’re forecasting a 0.3% rise in retail sales, underpinned by a 0.2% rise in the core categories.”
Time to exhale
The main local data set for release this week is December quarter inflation figures on Wednesday, which are expected to show a slowing annual pace and keeping the door open for the Reserve Bank to continue lowering the official cash rate.
Companies typically held for their reliable dividends were among those pacing declines. Lines company Vector fell 3.4% to $4, Precinct Properties NZ declined 3.2% to $1.21, Kiwi Property Group slipped 3.2% to 91.5 cents and Meridian Energy was down 2.7% at $5.88.
Port of Tauranga fell 2.1% to $6.19 after Forsyth Barr analysts downgraded the company’s stock rating to neutral from outperform, while also lifting their target price 25 cents to $6.60.
“While attractive forward earnings growth supports a positive investment outlook for Port of Tauranga, we believe the balance of earnings risk now lies more to the down rather than upside due to elevated port pricing expectations,” Forsyth Barr analysts Andy Bowley and Hugh Lockwood said in a note.
Millennium & Copthorne Hotels NZ surged 19% to $2.14 after controlling shareholder City Developments launched a takeover for the 24% of the hotel operator it doesn’t own at $2.25 a share. That was a 25% premium to the Friday’s closing price, but short of the company’s $3.36 net tangible assets per share.
CDL Investments, the property developer controlled by the hotel operator, will remain a separate listed entity with its own minority shareholders. It shares fell 3.9% to 75 cents.
Meanwhile, Rural Equities said its controlling shareholder H&G crossed the 90% threshold needed to enforce mop-up provisions in its takeover of the USX-listed farm owner. The Cushing family’s investment vehicle hasn’t declared its takeover unconditional yet.
Reporting by Paul McBeth. Image from Tabrez Syed on Unsplash.
