Lodestone pushes ahead with $100m IPO; NZX 50 powered higher

Lodestone Energy is pressing ahead with the NZX’s first substantial initial public offering in five years, seeking up to $100 million to accelerate its solar farm developments, with the stock market operator ending the day unchanged as it clawed back earlier losses.

New Zealand’s S&P/NZX 50 index was driven higher by gains among power companies including Meridian Energy and Mercury NZ in a mixed day across Asia, as US President Donald Trump’s rejection of an Iranian proposal to reopen the Strait of Hormuz pushed up oil prices.

Synlait Milk rallied after the dairy processor secured a new customer while reporting a tough annual result as the firm seeks to firm up its balance sheet.

And 2 Cheap Cars chief executive and controlling shareholder David Sena crossed the 90% threshold needed to enforce compulsory mop-up provisions.

Powering up

The NZX 50 rose 19.56 points, or 0.1%, to 13,830.68, with 20 stocks gaining, 24 declining, and six unchanged. The S&P/NZX 20 index increased 0.1% to 7,613.09, with the futures contract untraded.

Turnover across the main board was $142.6 million, of which Fisher & Paykel Healthcare accounted for $25.4 million as the country’s biggest listed company rose 0.8% to $45.37.

Stock markets across Asia were mixed as Brent crude futures rose 2.1% to US$106.47 a barrel at 5pm in Auckland after the US president sent conflicting signals over the weekend, rejecting a proposal by Iran to reopen the Strait of Hormuz, while noting negotiations this week with the Islamic Republic.

Australia’s S&P/ASX 200 index rose 0.3% in late trading and Hong Kong’s Hang Seng advanced 0.6%, while Japan’s Nikkei 225 dropped 0.6%.

Local energy companies drove the local index higher, with Meridian gaining 2.2% to $5.58 as the most heavily traded stock on the day, with 2.3 million shares changing hands.

Mercury advanced 1.2% to $6.93, Genesis Energy increased 1.6% to $2.55 and Contact Energy was up 0.9% at $8.73.

Precinct Properties NZ posted the biggest gain on the day, up 3.3% at 95 cents, recovering from its 14-year low last week.

Bonds were generally weaker as investors demanded higher returns, with the yield on New Zealand’s 10-year government bond up 2 basis points at 5.13%, still lower than its US equivalent at 5.21%.

The Reserve Bank of Australia is expected to hike its target cash rate a quarter-point to 4.6% on Tuesday, further widening the gap with New Zealand’s benchmark at 2.75%. The kiwi dollar traded at 56.69 US cents at 5pm from 56.53 cents last week, and was at 80.71 Australian cents from 80.59 cents.

“The currency’s getting pretty low and that’s going to put upwards pressure on tradeable inflation, leaving the RBNZ in a bind,” said Mark Lister, investment director at Craigs Investment Partners. “It almost forces them to hike more aggressively to support the currency.”

Exporter a2 Milk Co rose 2.7% to $8.51, while Fonterra Shareholders’ Fund units advanced 1.8% to $8.55 and Scales Corp increased 0.4% to $6.80.

Rate-sensitive companies were among the decliners on the day, utilities software firm Gentrack sinking 3.7% to $3.70 in the biggest drop on the NZX 50, while Summerset fell 2.9% to $7.46 and Ryman sank 2.3% to $1.91.

Transport companies were similarly knocked as oil prices rose, with Air New Zealand down 2.5% at 39.5 cents, Freightways falling 1.6% to $12.55 and Mainfreight slipping 1.1% to $65.76.

Infratil fell 1.9% to $14.03 as OpenAI’s pause on training its newest artificial intelligence models in the wake of a series of safety incidents weighed on the AI trade, and as Anthropic chief Dario Amodei prepared to meet US President Trump.

Something new

Solar farmer Lodestone confirmed plans to list on the NZX on Oct 22 as it sells up to 44.4 million shares at $2.25 apiece in a $100 million IPO to help pay for its pipeline of new sites. The solar energy company would be the first major listing since Winton Land went public in late 2021.

Stock exchange operator NZX was unchanged at $1.48.

Outside the benchmark index, Synlait rose 5% to 42 cents after the milk processor reported a loss of $72 million as it repairs its balance sheet, more than halving net debt to $215 million, and announcing a new customer was in the wings to replace lost demand from a2 Milk.

Comvita rose 4.6% to 80 cents as a group of shareholders put forward a proposal to oust chair Bridget Coates at the upcoming annual meeting, while saying they would reject similar proposals to remove two other independent directors.

And 2 Cheap Cars was unchanged at 87.5 cents after chief executive David Sena crossed the threshold needed to enforce mop-up provisions in his 90 cents per share offer.

Meanwhile, Statistics New Zealand figures showed the number of filled jobs rose a seasonally adjusted 0.2% in August from a month earlier, with jobs growth accelerating in more industries and regions.

And Reserve Bank of New Zealand figures showed the central bank was a net seller of $253 million in August.

Reporting by Paul McBeth. Image from Curious News.