Matt Goodson, managing director of Salt Funds Management, said it was a quiet trading day, with the market dominated by macroeconomic news.<\/p>\n
The Consumers Price Index (CPI) increased 0.9% for the March quarter, and annual inflation was unchanged at 3.1%. Most economists expected 2.9%, and the Reserve Bank of NZ (RBNZ) had forecast 3% inflation.<\/p>\n
The NZIER March quarterly survey of business opinion (QSBO) revealed that only a net 1% of respondents expected better general economic conditions over the coming months, compared with a net 39% in the December quarter.<\/p>\n
The building sector was the most downbeat.<\/p>\n
Firms\u2019 own trading activity was flat on a seasonally adjusted basis, a slight improvement from the net 3% reporting a decline in activity in their own business in the previous quarter.<\/p>\n
Goodson said the headline inflation rate was slightly higher than expected, but the underlying inflation measures were relatively steady at mid- to low 2%.<\/p>\n
\u201cSome people are now calling for a hike in the official cash rate in July, but that\u2019s just an obvious knee-jerk reaction to the 3.1% inflation rate. What would hiking achieve when the economy has spare capacity?\u201d<\/p>\n
Goodson said the QSBO survey was conducted throughout March and early April. The first batch of respondents, pre-Iran war, came in at plus 34% for business confidence, and post-Iran at minus 37%.<\/p>\n
\u201cThe Iran oil crisis has spooked businesses big time. If a peace settlement is reached, that confidence will recover quite quickly, but not entirely. It will take some months for the oil market to untangle itself.\u201d<\/p>\n
In the QSBO survey, a net 12% of firms plan to cut back on investment in buildings over the coming year, while 9% plan to reduce investment in plant and machinery.<\/p>\n
The Brent Crude oil price had fallen to US$94.43 (NZ$159.85) a barrel at 6pm NZ time.<\/p>\n
Local stocks<\/p>\n
At home, global transport and logistics company Mainfreight rose $2.10 or 3.68% to $59.20 after a two-week slide.<\/p>\n
Fletcher Building was down 5c or 1.71% to $2.88; ANZ fell $1.44 or 3.1% to $45.02; SkyCity decreased 1.5c or 2.22% to 66c; Turners Automotive eased 11c to $8.54; and The Warehouse declined 2.5c or 3.23% to 75c.<\/p>\n
In the energy sector, Meridian was down 6c to $5.59; Contact eased 9c to $9.30; and Mercury was up 3c to $6.48.<\/p>\n
Summerset, down 16c or 1.96% to $7.99, told shareholders at the annual meeting that its building programme for the year would be at the bottom of its guidance of 750-850 new units.<\/p>\n
Goodson said that, given the nature of the housing market and the rise in building costs, the guidance should not be a surprise; it was quite sensible. Summerset had tremendous leverage in its business model.<\/p>\n
Ryman Healthcare increased 8c or 3.98% to $2.09; Port of Tauranga gained 9c to $8.08; Ventia Services added 18c or 2.89% to $6.40; and Hallenstein Glasson rose 23c or 2.35% to $10.<\/p>\n
The property sector was stronger, with Property for Industry rising 5c or 2.21% to $2.31; Vital Healthcare Trust up 4c or 2.16% to $1.89; and Kiwi Property gaining 2c or 2.23% to 91.5c.<\/p>\n
Data software firm Blackpearl Group was up 3c to 97c after reporting a 114% rise in annual recurring revenue to $26.8m at the end of March. Fourth-quarter revenue increased 13% on the previous three months.<\/p>\n
Blackpearl said the milestone of $30m annual recurring revenue was fast approaching, and the growth case was now proven.<\/p>\n