Metlifecare IPO mooted as US holiday keeps markets muted

Retirement village operator Metlifecare is the latest company to eye an initial public offering, with a report across the Tasman that its Swedish owner EQT Partners is considering a dual-listing among the options to exit its five-year-old investment.

Global markets were relatively quiet with Wall Street closed for the Presidents’ Day holiday and China among those celebrating the Lunar New Year, while Europe was mixed as NatWest Group’s rally on a broker upgrade led the UK’s FTSE 100 higher and Germany’s DAX 30 was underwater with SAP under pressure as cloud providers remain out of favour.

The kiwi was largely unchanged against the greenback as fund managers soured on the world’s reserve currency in a Bank of America survey, showing institutional investors’ US dollar positions were the most negative they’ve been since the series began in 2012.

And locally, Statistics New Zealand’s partial inflation data are due ahead of the Reserve Bank’s first policy decision under new governor Anna Breman, while Australian mining giant BHP’s earnings result is the highlight of the season today.

Old friends

Metlifecare is eyeing a return to the ASX and NZX, with EQT hiring investment bankers to advise on exiting its five-year-old holding of the retirement village operator, according to the Australian Financial Review’s Street Talk column. The company, which EQT bought for $1.28 billion in 2020, is among those local investors have been tipping for a local listing as conditions become more favourable for firms to go public.

Local stock market operator NZX yesterday received a listing notice by junior mining explorer Rua Gold, which graduated to Toronto’s main stock exchange last week.

The rumour comes during a lull in the domestic earnings season, while mining giant BHP is due to report across the Tasman as surging prices for precious metals and the global tussle for rare earths has revived investor interest in mining companies.

Australian futures are pointing to a 0.2% gain for the S&P/ASX 200 index when trading opens across the Tasman after a quiet day in global markets with Wall Street closed for the Presidents’ Day holiday. Markets are closed all week in China for the Lunar New Year.

New Zealand’s S&P/NZX 50 index dropped 0.6% yesterday, with power companies sold off as institutional investors participated in a $475 million placement by Contact Energy, which resumes trading today. Contact is raising a further $50 million in a retail offering.

A bit of this, a bit of that

Stocks in Europe were mixed as NatWest posted its biggest one-day gain since October after getting upgraded by Citi analysts, to lead a 0.3% gain for the FTSE 100 in the UK. Germany’s DAX 30 fell 0.6%, with cloud computing firm SAP among those pacing declines, amid lingering fears about artificial intelligence encroaching on software markets. France’s CAC 40 nudged up 0.1%.

The kiwi dollar was largely unchanged at 60.33 US cents at 7am in Auckland from 60.32 cents yesterday after the latest Bank of America fund manager survey showed growing pessimism towards the greenback, with the most negative positioning since the series began in 2012.

“Negative sentiment is consistent with that seen in the options market, where pricing of risk reversals reflect more demand for puts than calls on the US dollar against various majors, and widespread anecdotal evidence that investors are more inclined to hedge US dollar exposure than previously,” Bank of New Zealand senior markets strategist Jason Wong said in a note.

Local data include Stats NZ’s selected prices index, which is expected to show rising food prices and cheaper petrol. The inflation indicator comes ahead of the Reserve Bank’s policy meeting on Wednesday, which is expected to keep the official cash rate at 2.25%.

Economists expect the central bank’s forward track of the cash rate will show hikes later this year, while bond traders have an increase fully priced in at the December meeting.

Reporting by Paul McBeth. Image from Curious News.