Infratil and Ebos lift NZX 0.74%; Tariff walkback eases markets

The S&P/NZX 50 Index rose 0.74% to 12,107.54 to start the week, with 90 stocks gaining throughout the day. A total of 24.8 million shares changed hands, amounting to $103.2m in value traded.

The benchmark has recovered 2.82% from where it closed on April 7, after it fell victim to a multiple-day global market rout precipitated by the United States’ tariff announcements on April 2.

At 5pm, the S&P/ASX 200 appeared to be following suit, climbing 1.37% to 7,749.70 while S&P 500 futures were trading up 1.16% after Washington signalled tariff relief over the weekend.

Infratil and Ebos

Infrastructure investor Infratil dominated the day’s volumes and led the index higher, rising 4.99% to $10.205 on volumes of just under $20m.

Peter Sigley, director of institutional sales at Forsyth Barr, said the firm was continuing to benefit from a Canberra Data Centre (CDC) investor day at the end of last week.

As of March 31, Infratil’s 48.17% investment in CDC was valued at between A$6.07 billion (NZ$6.53b) and A$7.21b. The Australian datacentre business constitutes more than 30% of the value of Infratil's portfolio.

Sigley added that notices on the NZX show senior management is increasing its holdings in the company.

“The market might regard that as positive news flow as well,” he said.

Despite the gains, Infratil remained 17.50% down in the year-to-date.

Ebos, which closed the $217m placement of its capital raise on Friday, rose 1.66% to $36.70.

In an investor note after the announcement, Forsyth Barr analysts Matt Montgomerie and Benjamin Crozier raised their 12-month target price for the stock to $45.40 from $44.85.

“We were slightly surprised by the decision to raise equity given EBO's debt capacity, but believe it to be a reflection of a healthy merger and acquisition pipeline,” the analysts said.

Mainfreight declined 2.60% to $58.44, a fall Sigley attributed to the company’s direct exposure to tariffs.

"That's reflective of ongoing concerns around the volume impact on their business, so that has been quite weak for a while."

Michael Hill International released a statement to shareholders announcing that founder and director Michael Hill was stepping down to undergo cancer treatment. Shares were flat at 43 cents.

‘Investor fatigue’

With the exception of those three blue-chip stocks, Sigley highlighted the “extremely light volumes” and cautioned against interpreting the day's movements too much.

"Serko is down [4.75%], but there have been 21,000 shares traded, so it's just ridiculous."

He attributed the slow trading to “a combination of Monday, school holidays and a little bit of investor fatigue due to the volatility in the news flow”.

On Saturday evening, US President Donald Trump signalled smartphones and other consumer electronics would be exempt from tariffs.

However, on Sunday evening, US Commerce Secretary Howard Lutnick clarified that those goods would be exempt from reciprocal tariffs but that other tariffs would be applied to them. 

“They’re included in the semiconductor tariffs, which are coming in probably a month or two,” he said.

Sigley said that whatever reaction traders tend to have one day, the next day, the markets could potentially do something completely different from what they were anticipating.

“Your head will be spinning. And no matter what you decide to do, it will probably be wrong from a one-day view. You've got to go back to the fundamentals at some point."