“The good news is that the ceasefire has been extended and the bad news is we still haven’t got a deal. It seems Iran and the US are quite far apart with what they need to end the situation and reopen the Hormuz Strait.
“But the markets are still looking on the bright side. There are risks out there, and a lot of disruption is happening to the global economy while the strait is closed,” Lister said.
“New Zealand hasn’t recovered like the US, Europe and Japan markets in the last two weeks and is suffering from cautious sentiment about rising inflation and what the Reserve Bank will do.
“The mainstream view is an Official Cash Rate hike sooner than we thought,” said Lister.
The Brent Crude oil price crept up to US$97.55 ($164.94) a barrel. Lister said the oil price is still holding under $100 and that seems a psychological tipping point.
Local shares
At home, Mercury Energy gained 12c or 1.85% to $6.60 after upgrading its full-year operating earnings (ebitda) guidance to $1.05 billion, from $1b, because of higher forecast renewable generation from hydro and new projects.
Mercury reported a trading margin of $325m in the March quarter, up 27% on the previous corresponding period. Generation volume increased 286GWh to 1997GWh, and for the year to date it is up 824GWh to 6726GWh.
Elsewhere in the energy sector, Meridian was up 10c or 1.79% to $5.69; Contact gained 9c to $9.39; and Genesis added 2c to $2.29.
Ebos Group declined 75c or 3.37% to a seven-year low of $21.50 after downgrading its full-year operating earnings (ebitda) guidance to $610m-$620m, from $615m-$635, because of the fuel crisis.
Ebos told the market the downgrade reflected additional transport and distribution costs of $5-$10m – absorbed by the group in maintaining service continuity – rather than a change in underlying demand or long-term earnings.
The company is talking with relevant stakeholders, including the Australian Government, about fuel cost recovery, Ebos said.
Lister said analysts had seen the Ebos downgrade coming and the market doesn’t like to get a confirmation even if it was expected.
Market leader Fisher & Paykel Healthcare was down 57c to $37.35; Channel Infrastructure declined 5c to $2.91; and Spark decreased 4c or 1.9% to $2.07.
Fletcher Building shed 6c or 2.08% to $2.82; Blackpearl Group fell 8c or 8.25% to 89c; and Pacific Edge decreased 0.006c or 3.47% to 16.7c.
Transport and logistics stocks Freightways rose 50c or 4.13% to $12.60, and Mainfreight was up $1.10 or 1.86% to $60.30.
Infratil gained 13c to $12.46; Napier Port increased 12c or 3.46% to $3.59; Rua Gold gained 4c or 2.21% to $1.85; and Vista Group added 4c or 2.21% to $1.85.
Ryman Healthcare, up 3c to $2.12, has been upgraded from neutral to outperform by broker Forsyth Barr, saying its price-earnings ratio is near the lowest multiple in its history.
Forsyth Barr said Ryman was well positioned for a potential housing downturn, given its reduced gearing and limited development exposure – in fact, it could be a net beneficiary, with rising construction costs likely to exacerbate existing supply shortfalls.
KMD Brands, down 0.003c or 4.48% to 6.4c, completed its shortfall bookbuild from its retail rights offer, with 126.4 million new shares taken up at 6c a share. A further 42.9 million shares were allocated to sub-underwriters.
KMD raised $65.3m, including the earlier placement and institutional rights offer, and will be used to reduce debt.
NZME, up 1c to $1.10, told shareholders at the annual meeting that advertising revenue was tracking at 3% growth for the first four months of this year, while OneRoof’s growth may be moderated in the near term, given the softer property market, inflationary pressures and the potential for higher interest rates.
Air New Zealand, down 0.005c to 44.5c, announced its chief financial officer Richard Thomson, in the role for five years, has resigned and is leaving at the end of August.
NZX, unchanged at $1.40, announced Graham Law, who has been with the exchange since November 2017, as the acting chief executive to replace Mark Peterson.
Recruitment firm Accordant Group, up 0.005c or 3.57% to 14.5c, has opened its rights offer of up to $6.7m at 15c a new share.
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