New Zealand’s S&P/NZX 50 index rallied into the end of the week as investors have one eye on the Reserve Bank’s next policy meeting and one on the ramping up of domestic earnings.
The benchmark index rose 83.2 points, or 0.6%, to 12,989.18, taking its weekly gain to 0.7% as it ended a three-week run of declines.
Fletcher Building led the NZX50 higher, gaining for a seventh session as it climbed 3.3% to $3.18. Fletcher’s 7.8% weekly gain was its best since early October.
The building materials firm is among the domestic companies reporting next week, with expectations low given the protracted economic downturn. And earlier this week, BusinessDesk reported that private equity firms were eyeing up Fletcher’s Australian assets.
The BNZ-BusinessNZ performance of manufacturing index showed industrial activity grew for the first month in almost two years in January, albeit on a day when Japan’s Oji Fibre Solutions confirmed plans to close its paper operations at its Kinleith mill and lay off about 230 staff.
Rubber goods maker rose Skellerup rose 1.6% to $5.25, while Vulcan Steel advanced 1.1% to $8.50 and Fisher & Paykel Healthcare gained 1.9% to $35.78.
A time for tariffs
Those three companies have been among those at risk of being affected by the White House’s new tariff regime. US President Donald Trump’s latest tariff announcement will see the US Commerce Department deliver reports on how to achieve reciprocal trading status before any steps are taken.
The New Zealand dollar rose to 56.91 US cents at 5pm in Auckland from 56.61 cents at 7am and 56.50 cents yesterday. It’s on track for a 0.5% gain this week as traders prepare for the Reserve Bank’s policy meeting next week, which is expected to deliver a half-percentage point cut to the official cash rate to 3.75%.
Statistics New Zealand figures today indicated stronger price pressures in January than economists predicted and posed an upside risk for the March quarter reading.
“Overall, we don’t think today’s update will cause too much alarm for the RBNZ ahead of next week’s policy meeting,” Westpac NZ senior economist Satish Ranchhod said in a note. “We still think the RBNZ will deliver a 50 basis point cut on 19 February.”
Meridian Energy rose 0.8% to $6.05 after its latest monthly update showed national hydro storage shrank to 91% of the historical average, with storage in its Waiau catchment less than half the norm at the end of January.
Powering through
Among other power companies, Genesis Energy gained 0.9% to $2.33, while Contact Energy – which is joining the MSCI global standard index at the end of the month – rose 1.1% to $9.39. Mercury NZ – which is out of the index – increased 0.2% to $6.425.
Lines company Vector posted the biggest decline on the benchmark index, down 2.9% at $3.96.
NZME gained 1.9% to $1.06 after The Australian’s DataRoom column speculated the media group may face a takeover from members of the local business community wanting to change the editorial direction of its flagship NZ Herald newspaper and website. Zuru founder Nick Mowbray was touted as a potential candidate but scotched the rumour.
Sky Network television increased 1.2% to $2.55 after the pay-TV operator said testing is underway on its new satellite and that migration is on schedule for early April.
South Port New Zealand rose 1.6% to $5.69 after the Bluff hub operator said it expects annual earnings to be in the top end of guidance after swelling volumes across its key commodities helped boost first-half profit 90% to $5.8 million. It declared an unchanged interim dividend of 7.5 cents per share.
Reporting by Paul McBeth. Image from Curious News.