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NZ Herald
4 days ago
- Business
- NZ Herald
KiwiSaver growth strong despite lagging NZ market
As for default funds, all funds with the notable exception of Fisher Funds (2.3%) returned over 4%. 'However it is worth noting that Fisher Funds' default fund is marginally the strongest performer for the trailing one year and is middle of the pack over three years,' Morningstar said. Generate, Quay Street, Milford and Westpac produced some strong performances across many risk profiles for the quarter. Morningstar said it was most appropriate to evaluate the performance of a KiwiSaver scheme by studying its long-term returns. Over 10 years, the aggressive category average has given investors an annualised return of 8.6%, followed by growth (7.8%), balanced (6.4%), moderate (4.6%), and conservative (4.1%), it said. ANZ led the market share with almost $22b. ASB was in second position, with a market share of 14.6%. Fisher, Milford and Westpac round out the big five. The New Zealand equity market (S&P/NZX 50 Index) posted a 2.8% gain in Q2 2025, recovering from an initial dip. 'This performance, while positive, trailed stronger returns seen in international shares (+9.3% hedged to NZD) and Australian shares (+7.4%),' Morningstar said. The Reserve Bank's rate cuts and improving domestic sentiment were supportive factors for local equities, it said. Both international and New Zealand fixed interest markets delivered positive returns in Q2, with gains of 1.2% and 1.3% respectively. The general trend of lower interest rates has supported bond prices, although yield curves steepened marginally. Morningstar said the residential property market, while still recovering, was showing increased activity among first-home buyers. 'The declining interest rate environment and recent government policy changes (such as restoring mortgage interest deductibility for rentals) are expected to bolster investor demand in the medium term,' it said. 'Investors may find opportunities as the market gradually gains momentum.' Morningstar noted the weaker New Zealand dollar. 'Investors with international holdings should consider the impact of currency fluctuations on their unhedged returns,' it said. Jarden on Genesis Investment firm Jarden has given its seal of approval to the deal done by Genesis with the other big power generators to support the Huntly Power Station. This week, Genesis Energy, Mercury, Meridian and Contact signed agreements to establish a strategic energy reserve centred on Genesis' Huntly asset. 'This is positive for Genesis, as it supports the longevity of its Huntly assets and should reduce some of the political risk around the industry, managing dry-year risk without intervention,' Jarden said in a research note. The initiative enables deferral of planned decommissioning of one of the Rankine units (originally scheduled for February 2026) through to 2035, and the establishment of a 600,000-tonne solid fuel reserve. The strategic reserve has been developed in response to tight market conditions during winter 2024, where declining gas availability, low hydro storage and subdued wind output spurred concerns about security of supply. Michael Hill's share holding Sir Michael Hill died holding 148.3 million shares (38.4%) in the company that bears his name, according to a notice filed with the NZX soon after his passing. Separately, acting chief executive Andrew Lowe said in an update that despite retail trading conditions remaining challenging in all markets, the jewellery business had delivered full-year earnings and gross margin broadly in line with the prior year's. A 'relentless' focus on store productivity brought a second-half lift in group same-store sales of 2.4%, Lowe said. The company's trading update for the 52 weeks to June 29 showed the jewellery retail chain's earnings before interest and tax would be around $14m to $16m. For the 2024 period it was $15.9m. NZX downgraded Forsyth Barr has downgraded its rating of stock exchange operator NZX to 'underperform' from 'neutral'. 'We believe its sustainable growth level is lower than market expectations given: (1) increased competition in the low-fee passive funds industry has heightened fee pressure on NZX and softened net inflows to its high-value KiwiSaver product, and (2) our view that the headwinds to earnings growth in its capital markets segment over the last decade will persist rather than ease,' the broker said. Over the last five years, NZX's earnings before interest, tax, depreciation and amortisation had shifted from about 90% markets to around 40% funds management. With funds management generating lower returns, more cyclical earnings and higher competitive pressures, it represented a lower-multiple earnings stream, Forsyth Barr said. 'Despite this shift, NZX is trading at a higher 12-month forward price earnings multiple today of 23 times than its pre-Covid average of 19 times. 'A sizeable valuation needs to be assigned to its wealth tech platform to explain the difference, which we believe is unjustified in light of historical merger and acquisition multiples,' the broker said. NZL's Capital Review Farm landlord NZ Rural Land (NZL) is to undertake a capital review of its strategic options. Proposals to conduct the review for completion within the current financial year ending December 31 have been sought, the company said. 'NZL has been listed for coming up to five years. In that time the company has made strong progress in growing its asset and earnings quality and size. 'That has not been reflected in the share price. 'The board considers that the full range of strategic options on the capital structure requires review and input from shareholders.' Shares in New Zealand Rural Land Company (NZRLC) debuted on the NZX at $1.31, a 4.8% premium to their $1.25 issue price, in December 2020. The stock last traded at 99c, after spending much of last year at 85c. Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
NZ Herald
23-05-2025
- Business
- NZ Herald
NZ sharemarket weakens, ignores Budget
The New Zealand sharemarket largely ignored the Budget to ended weaker, driven in part by a fall in infrastructure investor Infratil and offshore influences. The S&P/NZX 50 Index ended 0.52%, or 65.75 points, down at 12,596.50, with 44.7 million shares, worth $141.5m, trading. There were 73 rises and 63 falls
NZ Herald
13-05-2025
- Business
- NZ Herald
Capital Markets: NZ's strategic edge in a tumultuous global market
New Zealand capped off 2024 with an 11.4% gain in the NZX 50 Index, demonstrating improved investor sentiment as inflation cooled and interest rates eased. Secondary market activity saw material uplifts, with investors supportive of growth pipelines and balance sheet recapitalisations of large, established New Zealand assets; more than $5 billion has been raised via follow-on offerings over the past 18 months. Leading many of these processes, Jarden has been part of the shift in how New Zealand companies approach capital raising; most notably, through the use of ANREOs (Accelerated Non-Renounceable Entitlement Offers) in the New Zealand market. First employed under the new NZX Listing Rules for Heartland Group's $210 million raise last year, ANREOs enable tighter pricing compared to a renounceable raising structure, a faster execution timetable and more certainty for existing shareholders subscribing for additional shares at a fixed price. Fletcher Building's September 2024 $700m and Ryman Healthcare's February 2025 $1b raises – both led by Jarden – incorporated ANREO components following Heartland's positive market reception. The growing use of ANREOs brings New Zealand into closer alignment with Australian market norms, with recent activity reflecting a maturing attitude and understanding that the right balance of structural innovation, pricing and fairness can drive better overall shareholder outcomes. This holds true both during and following equity raise execution. Fletcher Building's 2024 equity raising delivered strong aftermarket performance, achieving a two-week return of 15% relative to its theoretical ex-rights price (TERP), outperforming the -2.5% median of recent New Zealand Accelerated Renounceable Entitlement Offer (AREO) structures the market was more familiar with. Retail investors were better off under the ANREO structure and received an overall value accretion (even if they didn't participate), given the potential value of rights in an AREO offer implied by precedents was likely outweighed by trading performance. Recent secondary market activity has also evidenced a strong appetite for quality growth investment propositions. Auckland Airport's $1.4 billion equity raise last year, the largest follow-on offer in NZX history, was project-linked, supporting the construction of a new terminal as part of a $6.6b capital expenditure programme. Strong investor demand reflected the confidence the market has in Auckland Airport's long-term strategy. The trend of NZX/ASX dual listings continues with Ryman Healthcare announcing alongside its recent equity raise that it is pursuing a secondary listing on the ASX, geared towards enhancing attractiveness to offshore capital and liquidity. This trend is particularly relevant for companies in sectors where Transtasman investor familiarity is high. Future New Zealand outlook Although the Reserve Bank cut the Official Cash Rate by 200 basis points from 5.5% in August 2024 to 3.5% on April 9, President Donald Trump's protectionist rhetoric and tariff disruptions have brought significant, fresh volatility to capital markets; the US market reached a five-year high in volatility (per the VIX Index) in early April, and the S&P 500 is down ~4.0% year to date. Following suit, the NZX 50 is down ~4.6% year to date. Global uncertainty has catalysed a focus on defensive assets and execution capability, meaning investors will look to transfer capital from globally exposed sectors into what are perceived as 'safe haven' geographies. In this context, New Zealand, with its relative political stability and robust legal framework, becomes more attractive to offshore capital. This outlook is coupled with an expectation that deal momentum will improve in 2025. Private equity exits were down 50% in 2024, stretching holding periods beyond five years and increasing the pressure on private equity firms to recycle capital. Also observed are emerging valuation gaps between public and private markets, leading to private equity sponsors directing dry powder towards listed companies with stable cashflow profiles and under-levered balance sheets. At the same time, local corporates have become open to strategic M&A – either to divest non-core assets or consolidate in sectors facing structural headwinds. The proposed divestment of Fonterra's consumer brands business (Mainland) is an example of this trend playing out locally and globally. IPO-specific future outlook New listings have remained scarce, with no major NZX IPOs since 2023 – higher market volatility and interest rates stalled most post-Covid IPO ambitions. Heightened investor selectivity and global macro uncertainty continues to weigh on the risk appetite of investors in considering new listings, which directly affects the valuations private shareholders can achieve. While the IPO window may be limited for smaller growth assets with a more speculative outlook, large and well-established businesses in mature markets, such as in the case of the Fonterra's Mainland divestment, remain strong candidates for IPOs. ASX sentiment supports this thesis, with predominantly large growth businesses, such as the IPOs of Digico and Guzman y Gomez, successfully listing in 2024. Helping to improve New Zealand's future IPO outlook are forthcoming regulatory changes, including amendments to prospective forecast information disclosure and lodgement requirements. These changes will reduce costs, lower friction for potential issuers and improve execution certainty, increasing IPO accessibility. An optimistic second half With both supply and demand-side drivers of M&A activity elevated, New Zealand capital markets are poised for continued momentum despite global volatility. Our pick is a continuing trend of secondary issuances using the ANREO structure, IPOs of high-quality assets in the second half of 2025 and calendar year 2026, as well as an inflow of foreign capital interested in New Zealand 'safe haven' opportunities. All in all, a positive outlook.
Sky News AU
30-04-2025
- Business
- Sky News AU
ASX 200 rises as fresh data shows inflation falls into RBA's target range, could prompt second rate cut in 2025
The ASX 200 has edged higher following a market surge in the US overnight, amid fresh data showing the RBA's preferred measure of inflation has fallen into its target range. The index bumped up 0.2 per cent on Wednesday, with Ramelius Resources rising 3.7 per cent and Spartan Resources jumping three per cent. Australian stocks have been on a tear over the past week, rising by 3.2 per cent over the past five days. Headline inflation remains stable at 2.4 per cent, but trimmed mean inflation - down from 3.3 per cent to 2.9 per cent - has fallen into the central bank's target range for the first time since 2021. The new figures have sparked hope that the RBA is about to make its second interest rate cut of the year. Sky News Business Reporter Ed Boyd said lowering inflation could lead to a boost in market confidence. 'Inflation numbers today could have an impact on the market,' Boyd said. 'If they're pretty good, the markets should lift even more.' On Wall Street, all major indexes surged despite US employers posting 7.2 million jobs vacancies in March, below the 7.5 million forecast by economists. The Nasdaq rose 0.6 per cent, the Dow Jones increased 0.8 per cent and the S&P 500 jumped 0.6 per cent. Hopes of the ongoing trade war simmering have surged on the back of US President Donald Trump telling reporters tariff negotiations with India are 'coming along great' and predicting there will be a deal between the two major countries. 'I think we'll have a deal with India,' Trump said outside the White House. 'The prime minister, as you know, was here three weeks ago, and they want to make a deal.' US treasury secretary Scott Bessent echoed Trump's comments, telling reporters the US was 'very close on India'. The US President said he was in discussions with Anthony Albanese on tariff discussions after speculation grew on whether the Prime Minister can get in contact with Trump. 'They are calling, and I will be talking to him, yes,' Trump told Nine News. The NZX 50 Index rose about 0.4 per cent on Wednesday before more than undoing these gains and sitting down 0.1 per cent. After Japan pausing trading on Tuesday for Showa Day, Japan's Nikkei 225 spiked almost half a per cent before losing its gains. South Korea's KOSPI is up about 0.1 per cent.
Sky News AU
22-04-2025
- Business
- Sky News AU
ASX 200 tumbles after Donald Trump's attack on Federal Reserve chairman Jerome Powell sends Wall Street plummeting
The ASX 200 initially dropped about one per cent on Tuesday after markets tumbled in the US when Donald Trump lashed out at Federal Reserve chairman Jerome Powell for failing to lower interest rates. Medical tech company Mesoblast sank 4.2 per cent, while uranium miners Deep Yellow (down 5.5 per cent) and Paladin Energy (down about 5.5 per cent) have dropped since the market opened on Tuesday. The tech and energy sectors are down about two per cent while real estate has dropped more than 1.5 per cent. The ASX 200 has recovered some losses since opening and hovers about half a per cent lower than its closing price on Thursday afternoon. Wall Street tumbled on Monday after Trump lashed the Federal Reserve chairman, who was appointed by Trump during his first term, in a scathing social media post where the US President demanded an interest rate cut. Trump labelled Mr Powell a 'major loser' and claimed there was 'virtually no inflation' and that energy and food prices were 'trending down'. 'With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,' Trump wrote on Truth Social. 'Europe has already 'lowered' seven times. 'Powell has always been 'Too Late,' except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?' The US President's attack is just one of many against the Federal Reserve chairman and follows a White House executive saying Trump was looking into whether he could fire Mr Powell. Markets fell after the post went live with the tech-heavy Nasdaq dropping about 2.5 per cent, the S&P 500 fall 2.4 per cent and the NYSE sinking 1.8 per cent by the end of the day. Gold has surged to a new record high as investors turn to the valuable commodity amid fears the trade war between China and the US will continue to escalate. Sky News Business Reporter Ed Boyd said this was a boon for gold stocks with West African Resources up almost four per cent, Regis Resources rising more than two per cent and Westgold Resources jumping 2.5 per cent on Tuesday. 'We've never seen the price of gold as high as it is right now,' Boyd said. 'Investors are flocking to gold over the past year.' Gold is up more than 40 per cent over the past 12 months and has now surpassed US$3400. New Zealand's NZX 50 Index is down about 0.9 per cent as Japan's Nikkei 225 is down about 0.3 per cent and South Korea's KOSPI 200 opened relatively flat on Tuesday.
