A larger reduction?
Greg Smith, investment specialist at Generate, said there was a positive sentiment for global markets when New York Federal Reserve president John Williams suggested an interest rate cut next month.
“Our big event this week is the Reserve Bank [RBNZ] locking in a 25-basis points cut in the official cash rate (to 2.25%) – there’s a chance they will look at a larger reduction.
“The big question is whether they will leave the door open for further cuts next year, and the language and the outlook from the bank will just be as important as the move they make,” Smith said.
ASB expects the RBNZ will leave its options wide open for next year, signalling it is prepared to cut further if the economic recovery risks are underwhelming its assumptions. After this week, the Reserve Bank has nearly three months to look at how the recovery is progressing.
Gentrack surged $1.43 or 18.22% to $9.28 after reporting an 8% increase in revenue to $230.19m and a 119% rise in net profit to $20.87m for the year ending September. It is not paying a dividend.
The utilities software company said, based on the scale and maturity of its development pipeline, “We are confident that revenue growth will be higher in FY26, but it is too early to provide further guidance.”
Gentrack said it passed a key milestone when Genesis Energy went live on its new cloud-based platform with Salesforce’s customer relationship management embedded.
ACEN in the Philippines and Pennon Water Services in the UK will soon be using the new platform.
Smith said the Gentrack stock has had a torrid time (on the NZX) this year, but the market got excited about earnings growth post-2026. There was a strong lift in recurring revenue with the utilities division up 12% and airports 17%.
Other stocks
Amongst other leading stocks, Freightways increased 28c or 2.01% to $14.21; Auckland International Airport gained 19c or 2.43% to $8.01; Chorus collected 16c to $9 94; and Briscoe was up 17c to $5.39.
Third Age Health increased 20c or 3.57% to $5.80; Vital Healthcare Property Trust gained 3.5c or 1.78% to $2; Sanford was up 19c or 2.6% to $7.49; Vulcan Steel added 21c or 2.58% to $8.34; and Tower was up 5c or 2.65% to $1.94.
Ryman Healthcare, up 2c to $2.89, told the market it has successfully completed a full refinancing of its $2 billion syndicated loan facilities, extending the term to five years and introducing a new flexible structure.
Kiwi Property, down 0.005c to $1.085, reported half-year revenue of $136.65m, up 6.46%; operating profit of $62.9m, an increase of 11.5%; and net profit of $9.82m, up $218.4m. Net tangible assets are $1.12 per share, and its portfolio value has hit $3.3b.
Kiwi said 77% of large-format retail land at Drury has been conditionally sold with the sale proceeds of $115m to be received in the 2017-19 financial years. Latest land sales were to Costco, Rebel Sport/Briscoes and Harvey Norman.
Santana Minerals increased 4.5c or 4.86% to 97c after the Environmental Protection Authority formally accepted the application for developing the Bendigo-Ophir Gold Project in Central Otago, under the Fast-track Approvals Act.
The application will now be considered by an expert panel, and the decision is expected within six months.
a2 Milk decreased 16c to $10.72 after receiving preliminary China regulatory approval to transition two China-label infant milk formula registrations, acquired through the purchase of the Pokeno processing plant, to a2 Milk-branded products.
The final step is applying to the State Administration for Market Regulation in China, with the review process expected to take about six months, the company said.
Stay ahead with the latest market moves, corporate updates, and economic insights by subscribing to our Business newsletter – your essential weekly round-up of all the business news you need.