Manufacturing activity in New Zealand is now the highest in four years, according to the BNZ-BusinessNZ Performance of Manufacturing Index (PMI).
The index reached 56.1 in December, up from 51.4 in November – its best reading since December 2021 and well above the long-term survey of 52.5.
Shane Solly, portfolio manager with Harbour Asset Management, said the better-than-expected PMI update is another sign the economy is recovering, though some are seeing weakness in the number of business closures.
He said the increased activity is benefiting companies like Fletcher Building and Mainfreight. Fletcher was still cautious in its trading update, but there is a better tone towards economic activity.
Fletcher rose 12c or 3.18% to $3.89, and Mainfreight was up 49c to $68.99.
Ebos Group increased 28c to $26.46. Solly said, “We’ve seen very heavy selling in Ebos from offshore, but we might be getting through to the other side of it.”
Infratil, which traded at $12.67 in early November, was up 7c to $11.26 on the back of a recovery in overseas tech stocks.
Taiwan Semiconductor Manufacturing Co, a major supplier to the industry, reported stronger quarterly profit than analysts expected and said it could boost its equipment investment to US$56 billion ($97.2b) to take advantage of the artificial intelligence (AI) boom.
Nvidia was up 2.1% to US$186.99. Solly said the continued demand for chips is positive for datacentres, and this benefits Infratil.
There had been quite a debate about the capital expenditure for AI.
He said there was also a bounce-back in New Zealand tech stocks.
“We’ve been seeing some weakness and wariness in that sector over the use of vibe coding, one of the AI tools, and replacing existing software applications.”
Other stocks
Vista Group increased 5c or 2.27% to $2.25; Gentrack was up 19c or 2.3% to $8.46; Blackpearl Group added 5c or 5.26% to $1; and Eroad gained 3c or 2.36% to $1.30.
Fintech stock PaySauce, down 0.005c or 1.79% to 27.5c, earlier reported record annual recurring revenue of $9.4m for the December quarter, including an 11% increase in year-on-year processing fees to $1.8m. This offset a 25% reduction in interest revenue.
The dual-listed banking groups had a good day, with Westpac rising $1.24, or 2.79%, to $45.73, and ANZ up 42c to $43.41.
The financial institutions had a better day in the United States. BlackRock increased by 5.93% to US$1156.65, and Goldman Sachs rose 4.63% to US$975.86 after reporting improved quarterly profits.
Back home, Santana Minerals increased 4c or 3.27% to $1.26, and 2 Cheap Cars was up 2c or 3.17% to 65c after its positive quarterly update.
Heavily traded Ryman Healthcare was down 8c or 2.69% to $2.89, with 4.33 million shares worth $12.6m changing hands a day after reporting steady quarterly sales.
Fellow retirement village stock Summerset, which provides an update next week, gained 22c or 1.81% to $12.40.
There was heavy trading in energy stocks on the quarterly rebalancing of the S&P Global Clean Energy Index. Contact was up 10c to $9.36 on trade worth $27.11m; Meridian gained 7c to $5.59; and Mercury also added 3c to $6.48 on trade worth $11.7m.
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