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MARKET CLOSE: NZ shares inch higher in tepid trade

Monday 14th January 2019

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New Zealand shares inched higher in quiet trading as investors await news from offshore. Kathmandu recovered some of its recent losses. 

The S&P/NZX 50 index rose 8.97 points, or 0.1 percent, to 8,968.55. Within the index, 21 stocks rose, 12 were unchanged and 17 fell. Turnover was $80.6 million. 

Grant Williamson, a director at Hamilton Hindin Greene, said there was "no theme" to the trading and "all of the movements are pretty tiny." 

Investors are largely treading water, waiting for leads from offshore, he said. 

Market sentiment may be impacted by US earnings, with several banks due to release quarterly results this week, the ongoing US government shutdown and the vote on Brexit this week. 

Domestically, tomorrow's business outlook survey from the New Zealand Institute of Economic Research is unlikely to move the market with business confidence still tepid, said Williamson.

Earlier today, Fitch Solutions Macro Research said New Zealand's economy will likely grow at a slower pace than Treasury is forecasting due to weak business confidence and declining consumer confidence.

“We forecast real GDP growth to come in at 2.6 percent in 2019 and 2.3 percent in 2020 compared to the Treasury’s more bullish forecasts of 3 percent and 3.2 percent respectively,” it said.

"I do get the feeling that we are not going to see too much movement in this market unless we get some large movement offshore," Williamson said. "I think investors are really waiting for the February reporting season." 

Kathmandu, which has been under pressure since reporting a disappointing Christmas trading season, gained 1.3 percent to $2.28 and was the most heavily traded stock today. However, while volumes were larger than usual, Williamson said actual on-market trading was very light.

Spark New Zealand had the second highest volume, shedding 0.6 percent to $4.14. Almost 2 million of its shares changed hands, compared to its average 3.2 million the past three months.

Meridian Energy was third, falling 0.7 percent to $3.5850. Genesis Energy fell 1.5 percent to $2.57. 

Precinct Properties and Z Energy also saw fairly strong volume, with Precinct Properties down 0.7 percent to $1.47 and Z Energy up 0.2 percent at $5.62. 

The top mover was Port of Tauranga, which gained 1.8 percent at $5.14. Vista Group added 1.6 percent to $3.92 and Fisher & Paykel Healthcare was up 1.5 percent to $13.8.  Fletcher Building added 1 percent to $4.99. 

In the other direction, the biggest fall was in Sky Network Television, which shed 3 percent to $1.92. 

A2 Milk was unchanged at $11.35. Economists are expecting dairy prices to show a moderate rise in this week's GlobalDairyTrade auction, with ASB Bank tipping a 1 percent in whole milk powder prices and BNZ expecting a "moderate lift."

Synlait Milk rose 1 percent to $9.36. Late Friday it said registration of its Dunsandel plant in the South Island has been renewed by Chinese authorities for another four years.


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