Investors still switched off Spark as NZX50 dips; NZX gets a new listing

Spark New Zealand’s renewed focus on its bread-and-butter telecommunications services hasn't yet revived investor confidence in the country’s biggest telco, with the company leading the S&P/NZX 50 index marginally lower on the day.

Meanwhile, stock market operator NZX secured a new listing, luring Locate Technologies across the Tasman where the Aussie firm sees a faster and smoother route to use Bitcoin as a treasury strategy.

Tower nudged higher after the insurer raised its earnings outlook given it’s almost at the end of the financial year without drawing too hard on its major event provisioning, although gross written premium growth was more subdued.

And Tait International has crossed the finish line in the last day of its takeover bid for telco minnow Vital, passing the 90% level of acceptances meaning it can mop up the remaining shares.

Flat week

The NZX50 decreased 1.25 points to 13,227.9, to end the week marginally higher – up 4.37 points. On the day, 19 companies declined, 20 rose and 11 were unchanged. Turnover was $130.6 million, of which Fisher & Paykel Healthcare accounted for $15.8 million as it slipped 0.5% to $38.

New Zealand was largely left behind as stock markets across Asia followed Wall Street higher as the prospect of lower US interest rates fuelled tech companies across Asia, whose valuations are typically sensitive to interest rates.

“The main driver of the market is interest rates – it trumps everything at the moment,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.

Spark New Zealand led the benchmark lower, falling 2.9% to $2.37 to add to Thursday’s 2.4% decline after the telco unveiled its latest five-year strategy signalling a renewed focus on its traditional mobile and broadband businesses to back annuity-style returns for investors.

“They’ve got to the view where they’re maximising core capacity in mobile and broadband and they’ve sold some of their growth areas,” Craigs’ McIntyre said. “They’ve become more of a yield play than anything else.”

Among other heavyweight companies to decline, Infratil slipped 1% to $12.48, Meridian Energy decreased 0.2% to $5.70, Contact Energy fell 0.3% to $9.18 and a2 Milk Co fell 1.2% to $10.17.

NZX was unchanged at $1.435 after securing its first listing of the year, with ASX-listed Locate Technologies saying it plans to jump across the Tasman, seeing New Zealand’s environment as supporting the company’s Bitcoin treasury strategy that caught the Australian Financial Review’s eye in July. The Australian firm’s shares jumped 7.4% to 5.8 Australian cents in late trading.

Fishing group Sanford posted the biggest gain on the day, up 4% at $5.70, while Mainfreight rose 3.1% to $62 and Gentrack increased 2.5% to $10.30.

Not-so-shaky isles

Tower gained 1.5% to $1.75 after the insurer raised its earnings guidance for underlying profit to a range of $100 million-to-$110 million in the September year from a previous forecast of $70 million-to-$80 million after not needing to draw much on its major events provisioning.

The insurer also trimmed its guidance for gross written premium growth to between 2% and 3% from mid-single digit growth.

Retailers were generally mixed after Statistics New Zealand figures showed another monthly gain for spending on credit and debit cards, which Westpac NZ senior economist Darren Gibbs described as encouraging and boding well for September quarter economic activity.

Briscoe Group dipped 1.6% to $5.41, while Hallenstein Glasson Holdings and KMD Brands were unchanged at $9.05 and 24 cents respectively.

Outside the benchmark index, Tait International was successful in its takeover bid for Vital at 45 cents a share, passing the 90% threshold needed to force the remaining shareholders to sell.

NZME was the most heavily traded stock with a volume of 4.4 million shares, with 3.7 million shares changing hands in a single trade at $1.10, the closing price for the day, which was down 2.2%.

The BNZ-BusinessNZ performance of manufacturing activity showed industrial activity shrank in September, although new orders and deliveries were both in expansionary territory.

The kiwi dollar traded at 59.69 US cents at 5pm in Auckland from 59.74 cents at 7am and 59.37 cents yesterday.

And the newly-launched Aurellan Asset Management has welcomed Wilshire Advisors to New Zealand’s shores in an exclusive partnership where the local firm will offer bespoke outsourced chief investment officer services to Kiwi investors backed by the global investment firm suite of asset allocation expertise, analytics, and fund manager research.

Reporting by Paul McBeth. Image from Curious News.