The S&P/NZX50 index surpassed the 14,000-point mark for the first time this week, bolstered by a generally positive company reporting season. The rally was driven primarily by gains in the utilities and property sectors, highlighting renewed investor optimism.
The index, which factors in dividends, has experienced its strongest performance in some time. Construction-linked companies, including Steel & Tube and Fletcher Building, stood out as some of the month’s leading risers, suggesting improving conditions in the construction sector.
According to NZX, most companies reporting their annual results in August met earnings expectations, delivering profits close to analyst forecasts. Despite this, the S&P/NZX50 Capital Index—which excludes dividends—remains approximately 15% below its January 2021 record high of 5,681.
Mark Lister, investment director at Craigs Investment Partners, described the milestone breach of 14,000 points as an encouraging development for a market that had experienced a prolonged period of weakness. “It’s great to see the S&P/NZX50 at an all-time high,” he said, noting that this marks the fourth consecutive positive week for the index. While some international markets have faced volatility, the New Zealand market has demonstrated greater stability over the past month, a trend Lister attributes in part to the solid reporting season.
Lister also emphasized the value in the market suggested by the gap between the total return index and the capital index, suggesting it provides a buffer and margin of error for investors. While many companies remain cautious about future prospects, overall results have been pleasantly solid, he added.
Fisher & Paykel Healthcare, the index’s largest constituent, has contributed significantly to the market’s gains, with its stock rising about 18% year to date. Other notable performers include Scales, Vista, Gentrack, and SkyCity Entertainment Group.
Looking ahead, Lister noted that sustained or declining oil prices would help improve confidence among businesses and consumers, potentially supporting further market strength.
In corporate news, Tourism Holdings (THL) reported a 34% increase in underlying net profit to $46.1 million. Despite ongoing cyclical and geopolitical challenges expected to persist into 2027, Forsyth Barr analysts highlighted the potential for significant operating leverage should conditions improve.
THL’s board is currently considering two non-binding indicative takeover proposals. The first, from the BGH consortium, offers $3.10 per share, while a competing bidder, considered a credible strategic acquirer, has proposed between $3.30 and $3.40 per share. These offers represent a substantial increase over an initial $2.30 per share approach made in June 2025. Due diligence is underway and is expected to continue for approximately six weeks.
Forsyth Barr assesses the likelihood of a deal as “more likely than not” but acknowledges the complexities posed by the BGH consortium’s effective blocking stake. The firm also noted that with net tangible assets per share rising to $2.18—or $2.40 including embedded fleet value—along with a controlled balance sheet and modestly positive earnings outlook, downside risk appears limited should a transaction not materialize.