The New Zealand stock index fell on Monday as investors prepared for the Reserve Bank to raise the official treasury rate later this week.
Tuesday November 23, 2021, 6:54 p.m.
The S & P / NZX 50 Index lost 132 points, or 1%, to 12,607.64. Turnover was $ 146 million.
Rising interest rates weighed on the local stock market, which has not posted any lasting gains since the same period last year.
On Wednesday, the central bank will release its November monetary policy statement, which is expected to contain a 0.25% increase in the official exchange rate (OCR).
However, strong inflation expectations and near-record unemployment have prompted investors to predict a 45% chance of a 50 basis point hike.
A note from the Craigs Investment Partners research team said they would expect to see a reaction in financial markets anyway.
ASB economist Mike Jones said the Reserve Bank of New Zealand (RBNZ) meeting on Wednesday afternoon would be a “punch”. “
Once the dust settles, we believe the lasting market response will be determined by the extent to which the bank raises its long-term OCR forecast, ”he said.
The RBNZ had forecast that the spot rate would peak at 2.1% in August but could take it to 2.5% – a level closer to market expectations of more than 3%.
Investors appeared to be taking some risk on the table with a sample of stocks posting significant declines today.
Ryman Healthcare led the market lower, falling 3.7% to $ 12.50 after already being the worst performing stock last week.
Jarden analysts reiterated their “sell” rating after the retirement village operator’s half-year results were lower than expected.
Analysts said the stock was “unattractive” due to high levels of leverage and the risk of the stock price falling significantly.
However, Macquarie expressed a different point of view, saying that with strong demand and high real estate prices, the stock deserved its price.
Electricity stocks were particularly weak today, with Vector down 2.7% to $ 3.90, Genesis Energy down 2.7% to $ 2.92 and Meridian Energy closing down 2. , 4% to $ 4.52.
Meridian Energy will sell its Australian power sector assets for A $ 729 million (NZ $ 754 million) to oil multinational Shell and Infrastructure Capital Group.
Metro Performance Glass fell 8.5% to 37.5 cents a share after announcing that it had just broken even in the first half of the year.
The latest listing for NZX, logistics software Trade Window, jumped nearly 85% when it debuted in the market after a direct listing this morning.
Shares that floated at 92 cents were trading at $ 1.70 at market close, valuing the company at $ 146 million.
The New Zealand Refining Company climbed 5.8% to 91 cents after confirming its decision to convert to an import-only fuel terminal.
The New Zealand dollar was trading at 69.90 cents US by 3pm in Wellington, against 70.36 cents on Friday.
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