NZX 50 lags Asia as Meridian, Precinct shed dividend rights

New Zealand’s S&P/NZX 50 index lagged behind its peers across Asia as the local bourse gave up some of Wednesday’s out-of-step gains, with Meridian Energy and Precinct Properties NZ going ex-dividend creating an extra drag for the gross index, which incorporates those payments.

Stock markets across Asia were broadly stronger as oil prices eased and government bond yields dipped as US President Donald Trump downplayed the prospect of the renewed fighting with Iran lasting for a protracted period.

Meanwhile, the Financial Markets Authority lifted its suspension on chief executive Samantha Barrass allowing her a graceful exit, while Winton Land turned to corporate fix-it man Michael Stiassny to take over the vacant chair, letting the property developer resume trading.

And Godfrey Hirst’s parent has raised its offer for carpetmaker Bremworth to trump David Ferrier’s proposed partial takeover.

Missing the bounce

The NZX 50 fell 84.39 points, or 0.6%, to 13,846.16, with 31 stocks declining, nine gaining and 10 unchanged. The S&P/NZX 20 index futures contract for September rose 0.3% to 7,730 with 30 lots traded for a value of $232,000, while the NZX 20 dropped 0.9% to 7,710.28.

Turnover across the main board was $136.8 million, of which Auckland International Airport accounted for $18.8 million as it slipped 0.2% to $8.55.

Stock markets across Asia were broadly stronger as Brent crude oil futures fell 0.6% to US$95.06 a barrel at 5pm in Auckland and the yield on 10-year US treasuries dipped 2 basis points to 4.78% – matching its New Zealand equivalent – as President Trump played down the length of time he expected the latest flare up in the Middle East to last.

Japan’s Nikkei 225 index increased 0.2% and South Korea’s Kospi gained 0.8%, while Australia’s S&P/ASX 200 index advanced 0.4%.

Statistics New Zealand figures today showed elevated oil prices eroded the nation’s purchasing power in the three months ended June 30, with the terms of trade sinking 9% in the quarter, offsetting the benefits of the country’s export-led recovery.

“Over the first half of the year there has been a strong lift in the import of capital goods (excluding transport equipment) – which points to firms becoming more confident in the New Zealand economic recovery (prior to the fuel price blip) and gearing up investment,” ASB Bank senior economist Jane Turner said in a note. “This is an encouraging sign that the New Zealand economy is poised for recovery over the second half of the year now that business confidence has largely recovered from the falls seen in Q2.”

The kiwi dollar rose to 58.63 US cents at 5pm from 58.30 cents yesterday, and dropped to 92.47 yen from 93.32 yen amid speculation that Japanese authorities were poised to intervene in currency markets again.

Counting the beat

The NZX 50 was out of step with the rest of Asia for another session, with heavyweights giving up some of the previous day’s gains. Fisher & Paykel Healthcare slipped 0.7% to $44.29, Infratil declined 0.2% to $14.55 and Mercury NZ decreased 0.5% to $6.70.

Meanwhile, Meridian fell 3.4%, or 19 cents, to $5.33 after shedding rights to an upcoming dividend of 16.1 cents per share, while Precinct declined 2%, or 2 cents, to 98 cents, having gone ex-dividend on an upcoming payment of 1.6875 cents per stapled security.

Gentrack posted the steepest decline on the top 50 index, down 3.7% at $4.43, while Oceania Healthcare slid 3.1% to 77 cents and SkyCity Entertainment Group dropped 3.1% to 63.5 cents.

NZX fell 2% to $1.45 after the stock market operator’s monthly operating metrics showed trading activity picked up in August – buoyed by the MSCI reweighting at the end of the month.

Spark New Zealand was again the most heavily traded stock on the day with a volume of 4.6 million shares, ending the session unchanged at $2.19, while Vulcan Steel posted the biggest gain, up 6.1% at $7.11. Stride Property rose 2.8% to $1.12 and ANZ Group Holdings advanced 1.5% to $46.57.

Outside the benchmark index, Bremworth surged 15% to 77 cents after Mohawk Industries’ Floorscape entity put forward a new takeover proposal, offering 95 cents per share, or $65.6 million, for 100% of the carpetmaker’s shares. David Ferrier, who owns almost 20% of the company, indicated he wouldn’t support the revised scheme. Ferrier intends to make a partial takeover of 90 cents per share for up to 55% of the company.

Winton Land climbed 3.3% to $1.085 when it resumed trading after appointing Michael Stiassny to chair the property developer. Trading of the stock was suspended on Monday when a boardroom exodus meant it didn’t have the required two independent directors to meet NZX listing rules. Meanwhile, Winton’s chief operating officer Simon Ash sold all of his shares prior to the suspension.

And the FMA confirmed the immediate departure of chief executive Samantha Barrass, who’d been suspended pending an employment investigation, which has been incorporated into a broader probe commissioned by the Ministry of Business, Innovation and Employment into the regulator’s culture.

Reporting by Paul McBeth. Image from Curious News.