Market News - 9 November 2026

Johnny Lee writes:

Last week proved to be a particularly eventful one for capital markets, with a number of market-moving events taking place. This had a direct impact on a major retail bond issue (Contact Energy) and saw a rapid repricing on New Zealand equities.

US Midterm elections saw the Democratic Party regain control of the US Senate and the House of Representatives. While this was not necessarily a surprise, it did introduce some volatility across equity, currency and commodity markets.

US equity markets rose 3 percent the next day, oil fell sharply, gold rallied higher and even the New Zealand market responded positively, having its strongest day in months and closing at record highs.

The very next day, share markets fell 4 percent, oil rebounded, and the New Zealand market slipped back.

This spike in volatility reflected the uncertainty surrounding the future of US geopolitical direction. Investors are looking for clues as to how the next two years may play out, particularly with regards to the conflict in the Middle East.

The two-day period also coincided with the pricing of the recent Contact Energy bond, CEN100. The rate set occurred on Thursday with the sharp drop in swap rates seeing the minimum rate threshold (5.80 percent) to be triggered and applied to the bonds. The inclusion of minimum rate thresholds has been a positive development for the capital markets community, and one to be encouraged.

Whether this turns out to be particularly fortuitous timing for Contact remains to be seen. The Reserve Bank meets next on 9 December.

There was one other event of note.

The New Zealand election also took place over the weekend, with no conclusive result determined yet. The share market response has been muted, with investors seemingly waiting for the formal results later this month.

Several sectors including infrastructure, energy and mining, will be grateful for a dose of political certainty.

KMD Brands and The Warehouse

In amongst all the market noise, two smaller developments may have escaped investor notice, from KMD Brands and The Warehouse.

KMD, formerly Kathmandu, announced it had received interest from an external party to acquire the company. This saw the share price move higher, climbing 15 percent.

Discussions remain at the preliminary stage. If these discussions progress to a formal offer, the company expects to have something presented to shareholders by the end of the year. 

Meanwhile, The Warehouse hosted its 2026 Investor Day, detailing its review of the last few years of underperformance, and unveiling a new strategy to get the business back on track. The Warehouse also mentioned that it intends to provide a quarterly update this Friday, forewarning that early performance had been “subdued”.

Dividends are set to resume next year. Dividends will be pegged to net profit going forward, with an emphasis on maintaining flexibility and building a stronger balance sheet long term.

The internal review pulled no punches. The company admits that the business model became too complex, stock acquisition and distribution was mishandled, and the company had ultimately “lost relevance”.

Its moves to invest into the likes of TheMarket and Torpedo7 are over, and even its Grocery offering looks set for a repositioning.

Instead, The Warehouse will focus on its three core businesses (The Warehouse, Noel Leeming and Warehouse Stationery) and collectively adopt a model of “buy, move and sell”. 

Part of this strategy includes a new “ambition” of achieving an operating profit of $100 million within the next 3 to 5 years. The company’s most recent result was $22.6 million, and while an economic recovery remains the most impactful aspect over that timeframe, margin growth and store growth will also form part of the picture. 

The strategy veers from generic to granular, with the presentation including detail on The Warehouse’s customer analytics.

The two target markets (“Life Jugglers” and “Next Gen NZers”) are shaping the evolution of the business, as The Warehouse looks to reposition its offering to target these two markets. This includes improving the layout of the stores to make shopping more convenient, and modernising stores to make the shopping experience more enjoyable.

A new approach to its Digital strategy was also outlined, as the company completed its review into how customers engage with The Warehouse digitally. It noted that while many consumers use online channels to find product and product availability, most of these eventually acquire the product in store, and a focus on convenience was necessary to convert these people into customers.

Noel Leeming also looks set for a shake-up, with a greater focus on winning market share specifically in the under-35 cohort.

This includes regular in-store events, better demonstrations of technology in store, and a tightening of its product range to align with the modern customer.

For Warehouse Stationery, a major part of its focus going forward will be aligning with the education sector, adding more value to schools and engaging with them earlier.

Overall, the company has clearly spent a considerable amount of time reflecting on the struggles of the last five years, which has seen the share price decline from $4 to 70 cents. 

The question now is whether the right lessons have been learned, and whether the new strategy can lead to a sustainable business going forward, in an era of international competition and 

Taiko Critical Minerals 

The Fast Track process produced another welcomed outcome for investors last week, as Taiko Critical Minerals received conditional approval of the expansion of its Barrytown Critical Minerals project.

The draft decision will be formalised on 8 December, at which point the “real work” can begin as it moves from the consenting process to an established mining company. The DFS (Definitive Feasibility Study) is expected in the new year, as is the formalising of financing arrangements.

The share price responded positively following the announcement, climbing 10 percent.

Reporting Season

November marks reporting season for a few of our largest companies. Mainfreight reports on 12 November, Infratil on 18 November, Ryman on 25 November and Fisher and Paykel Healthcare on 26 November.

In a period of heightened volatility, forward guidance may be challenging. However, shareholders will be looking closely at the company outlook to give context as to the economic conditions being navigated at the moment. Balance sheet management will also be in focus, as interest rate markets chart their own course among the political ructions observed over the last week.

Travel

16 November – Wellington – Gavin Parkes

17 November – Lower Hutt – David Colman

17 November – Christchurch - Chris Lee

18 November (am) – Christchurch – Chris Lee

18 November (pm) – Ashburton – Chris Lee

19 November – Timaru – Chris Lee

Investors who would like an appointment to meet are welcome to contact us.

Chris Lee & Partners