New Zealand’s benchmark index climbed near a three-week high as exporters including The a2 Milk Co rallied on Chinese economic growth figures meeting expectations as strong exports and government support puts Asia’s biggest economy back on more stable footing.
The S&P/NZX 50 index jumped 129.76 points, or 1%, to 13,130.43, with turnover on the main board a more respectable $136.1 million after relatively quiet trading this week.
New Zealand’s benchmark index gained 1.8% across the week as cooler inflation in the US and UK revived optimism the Federal Reserve will be freer with its rate cuts this year, taking the heat out of elevated bond yields.
The yield on New Zealand’s 10-year government bond ended the week at 4.68%, while the kiwi dollar traded at 56.04 US cents at 5pm in Auckland from 56.09 cents yesterday.
Air New Zealand led the NZX50 higher, climbed 3.3% to 62 cents on a volume of 6.1 million shares, the most traded in a session since Nov 25.
Auckland International Airport figures earlier this week showed international visitor numbers have been recovering, while a weak kiwi dollar makes export goods and services more attractive to foreign buyers. The airport operator’s shares rose 1.1% to $8.67.
Tourism Holdings fell 3.9% to $2, posting the biggest decline on the benchmark index for the day.
Milk marketer a2 Milk climbed 3.2% to $6.50, while its key supplier Synlait Milk gained 2.4% to 42 cents, New Zealand King Salmon Investments rose 2.3% to 22.5 cents, and high-tech components maker Rakon advanced 1.7% to 61 cents.
Flying dragon
Chinese gross domestic product grew at a 5% annual pace in 2024, meeting Beijing’s target and in line with international analysts’ expectations.
Local exporters got a strong lead from global luxury brands – which have generally been tied to the health of the Chinese consumer – after Cartier-owner Richemont beat December earnings expectations.
Fisher & Paykel Healthcare climbed 2.8% to $38.90 and Infratil gained 0.3% to $11.91.
Meridian Energy rose 1.7% to $6.04 after Forsyth Barr analysts retained their neutral rating and target price of $6.25 after Thursday’s operating metrics showed a very weak period when hydro lake levels were at emergency lows is making way for a materially stronger outlook.
Contact Energy increased 0.7% to $9.67 and Mercury NZ gained 1.2% to $6, while Genesis Energy declined 0.5% to 2.16.
Stocks were weaker across the Tasman as the big four banks followed Wall Street lower, despite the solid earnings from the US financial sector.
Dual-listed ANZ Group Holdings fell 3.3% to $32 on the NZX, while Westpac Banking Corp was down 1% at $35.53.
Merger and acquisition activity dominated headlines in Australia with a potential tie-up of mining giants Rio Tinto and Glencore said to be in early stages, while tussle for Insignia Financial heats up with CC Capital raising its bid for the financial services firm formerly known as IOOF. And AVJennings granted due diligence to Singaporean developer Ho Bee Land.
Reporting by Paul McBeth. Image from Michael Myers on Unsplash.