Contact leads NZX50 to five-month low in holiday trading across Asia

Contact Energy led the S&P/NZX 50 index lower as the power company resumed trading after raising $450 million in a discounted placement to institutional investors, with a $75 million retail offering still to come.

Trading across Asia was light with the Lunar New Year keeping markets closed in China, Singapore and Hong Kong, although BHP drove Australia’s S&P/ASX 200 index higher as its pivot to copper paid off.

Local interest rate sensitive companies, such as the commercial landlords were mixed ahead of the Reserve Bank’s policy review on Wednesday, which is expected to keep the benchmark rate unchanged, even as swaps dipped on smaller price declines in Statistics New Zealand’s monthly partial inflation reading.

Meanwhile, stock market operator NZX and retirement village operators Summerset Group Holdings, Oceania Healthcare and Ryman Healthcare were all weaker amid reports Metlifecare might be considering a return to the local exchange.

Three in a row

The NZX50 fell for a third day in a row as it dropped 86.29 points, or 0.7%, to 13,031.62, a five-month low, with 28 stocks declining, 17 gaining and five unchanged. Turnover across the main board was $190.3 million, of which Fisher & Paykel Healthcare accounted for $46.8 million as it fell 2.5% to $35.68.

The local bourse followed the broadly weaker tone across Asia, with China, Singapore and Hong Kong among markets closed for the Lunar New Year holiday, while Japan’s Nikkei 225 index fell 0.9%. Wall Street was closed on Monday for the Presidents’ Day holiday, with futures pointing to a 0.5% decline for the S&P 500 when it opens.

Contact Energy led New Zealand’s benchmark lower, falling 4.1% to $9.20 on a volume of 3 million shares, having resumed trading after the shares were halted for the institutional component of a planned $525 million capital raising, at a discounted $8.75 per share.

Forsyth Barr analyst Andrew Harvey-Green trimmed his target price on the stock by 10 cents to $11 due to the dilution from the capital raising, while keeping his ‘overweight’ rating for Contact after a strong first-half result.

“In an unexpected move, Contact Energy is raising circa $525m of equity to fund projects brought forward and to increase balance sheet flexibility for future projects,” Harvey-Green said in a note to clients. “While it left a different impression on the need for equity at its November 2025 investor day, the decision is sensible given Contact’s extensive project pipeline.”

Infratil, which is Contact’s biggest shareholder, fell 1.8% to $10.74.

Retirement village operators were weaker after The Australian Financial Review’s Street Talk column reported Metlifecare is considering a return to the ASX and NZX as Swedish owner EQT considers options for an exit. Oceania Healthcare fell 3.7% to 78 cents, Summerset Group Holdings fell 2% to $10.46 and Ryman Healthcare decreased 0.8% to $2.45.

Stock market operator NZX, which yesterday announced the first listing of the year when Rua Gold joins the bourse later this month, slipped 0.7% to $1.40.

Not so sticky

Interest rate sensitive companies were mixed as two-year swap rates fell 1 basis point to 3.04% and 10-year swaps dipped 2 basis points to 4.07% after Statistics New Zealand’s selected prices index showed a softer inflationary outlook in January than what some economists expected. The kiwi dollar traded at 60.26 US cents at 5pm in Auckland from 60.32 cents yesterday.

Goodman Property Trust rose 2.2% to $1.90 and Investore Property gained 1.4% to $1.105, while Property for Industry slipped 1.4% to $2.20 and Kiwi Property Group declined 1% to 99.5 cents.

Precinct Properties NZ was the most traded stock on the day with a volume of 3.6 million, as it decreased 0.9% to $1.12.

Sky Network Television fell 0.6% to $3.18 after saying its long-standing rights to broadcast HBO programming will end in the middle of the year, with Warner Bros Discovery’s HBO Max set to enter the local market.

Warner Bros Discovery is said to be reconsidering engaging with Paramount SkyDance. The media giant’s board had previously endorsed selling the WBD streaming and studios businesses to Netflix.

Vista Group International, which relies on a healthy global box office market, posted the biggest gain on the day, up 8.5% at $1.78, bouncing back from near a two-year low.

The a2 Milk Co extended its gain for another day after its better-than-expected first-half result, gaining 6.6% to $11.19, while Gentrack advanced 2.6% to $7.03.

Outside the benchmark index, Santana Minerals dropped 10% to $1.035 when it resumed trading after saying it plans to raise A$130 million at 90 Australian cents each, in a two-tranche placement, subject to shareholder approval.

Across the Tasman, the ASX200 was up 0.3% in late trading, with BHP pacing gains after the mining giant touched an all-time high as its bigger focus on copper helped it pay a bigger dividend than analysts predicted.

Reporting by Paul McBeth. Image from Curious News.