Sharemarket at highest level since 2008
The New Zealand sharemarket rode corporate earnings momentum to a four year high, with Pumpkin Patch leading gainers after its profit upgrade, and Rakon surging after announcing a Chinese supply deal.
The NZX 50 Index rose 9.09 points, or 0.25 per cent, to 3,648.74 as of noon, its highest level since May 2008. Turnover was $23.9 million, with a lower than usual 8.2 million shares passing through the bourse.
Across the Tasman, the S&P/ASX 200 Index fell 0.5 per cent to 4348.20, while Japan’s Nikkei 225 Index gained 0.5 per cent to 9208.62 in early trade.
Pumpkin Patch, the children’s clothing retailer, rose 4 per cent, with the stock still attracting interest from investors after it said net profit before non-recurring reorganisation costs is set to come in at $10.1 million.
That beats a forecast of $9.7m from brokerage Forsyth Barr, although the improved level is still short of the $12.6m profit reported for the same period a year ago.
Rakon, the maker of electronic components, rose 16.7 per cent to 49 cents, after signing a deal with Huawei which could quadruple its sales to the Chinese consumer electronics giant over the next five years.
Kathmandu, the outdoor clothing and equipment maker, rose 1.7 per cent to $1.80.
Telecom, the country’s biggest phone company and most traded stock, rose 1.5 per cent to $2.73.
Trade Me rose 1.3 per cent to $3.93. The online marketplace provider last week saw interests associated with Australian billionaire James Packer take a 5 per cent stake in the firm.
Nuplex, the chemical and resin maker, rose 1.1 per cent to $2.76.
Cavalier, the carpet maker, fell 5.1 per cent to $1.66, leading decliners on the NZX50 after it posted a full-year net loss of $1.6 million compared with $18.2 million profit the previous year.
PGG Wrightson, the rural services firm set to release its annual results on August 29, fell 3.1 per cent to 31c. Forsyth Barr is forecasting the firm profits to jump by over 50 per cent to $26.2m.
NZX, the securities market operator, fell 0.9 per cent to $1.13 after posting an interim profit of $3.2m, down from $4.5m a year ago.
The service sector is still expanding, but the pace is slowing from a trot to a jog, with slow sales in difficult business conditions.
For the second month in a row expansion levels for the services sector dipped, though the level still suggests moderate growth is expected.
The BNZ-BusinessNZ Performance of Services Index, PSI, was 53.1 in July, down 0.8 points from June. It fell 2.5 points in the previous month.
A figure above 50 indicates the sector is expanding, and below 50 that it is contracting.
- © Fairfax NZ News