NZX 50 slides as AI concerns knock Infratil; Lodestone eyes IPO

New Zealand’s S&P/NZX 50 index fell for a third day in mixed trading across Asia, as Anthropic chief executive Dario Amodei’s call to slow down the pace of artificial intelligence development weighed on AI-linked companies across the region, including the likes of Infratil.

Travel software firm Serko fell for a fifth day to lead the index lower and Chorus declined as it shed rights to an upcoming dividend payment, while Mercury NZ added a further headwind to the benchmark.

Meanwhile, stock exchange operator NZX advanced as solar farm developer Lodestone Energy embarked on a roadshow to test the interest for an initial public offering.

And data showed more signs of the long-awaited economic recovery, with BusinessNZ-BNZ’s monthly gauge of services activity posting a third expansion in a row and Statistics New Zealand tourism figures reporting a return to pre-covid levels.

Too fast

The NZX 50 fell 19.64 points, or 0.1%, to 13,560.69, with 21 stocks declining, 25 gaining, and four unchanged. The S&P/NZX 20 index futures contract for September was unchanged at 7,551, with 4,042 lots traded for a value of $30.5 million, while the NZX 20 slid 0.4% to 7,511.83.

Turnover across the main board was $97.9 million, of which Auckland International Airport accounted for $14.7 million as the country’s major gateway slipped 0.4% to $8.29. The airport operator was the most heavily traded stock on the day, with a volume of 1.8 million shares changing hands.

Infratil was the biggest drag on the NZX 50, falling 2.8% to $14.11, as AI-linked companies across Asia were broadly weaker after Anthropic CEO Amodei’s call for regulation and to slow the pace of development. South Korea’s Kospi, which has been a major beneficiary of the AI boom, dropped 2.9% in late trading, while Japan’s Nikkei 225 declined 0.9%, with OpenAI backer SoftBank sinking 11%.

“It does seem to be a play to regulate against Chinese open-source models that charge next to nothing,” said Matt Goodson, managing director at Salt Funds Management. The AI giants “have incredible cash burns and those businesses do need to keep raising capital.”

Serko posted the steepest decline on the day, falling 5.1% to $1.30, while Chorus declined 4.5%, or 40 cents, to $8.43 as it shed rights to an upcoming 36 cents per share dividend.

Scales Corp dipped 0.2% to $6.79 after the apple exporter said it bought out its joint venture partner in European business, Esro Petfood, and would fully consolidate the unit’s results from September.

A new offer

Power companies were mixed as solar farm developer Lodestone said it was gauging investor interest in an IPO, with funds raised seen as supporting the construction of more solar farms, expanding its retail customer base and general purposes.

Mercury fell 2.1% to $6.55 and Genesis Energy was unchanged at $2.68, while Meridian Energy rose 1.4% to $5.27 and Contact Energy advanced 0.8% to $8.62.

Goodson said Salt hadn’t started looking at Lodestone, but that a quality IPO would be a welcome addition to the market: “You’ve always got to be cognisant of returns.”

Stock market operator NZX rose 0.7% to $1.47.

Vulcan Steel posted the biggest gain on the day, up 3.5% at $6.26, while Vista Group International gained 2.3% to $2.70 and a2 Milk Co rose 2.1% to $8.34.

Channel Infrastructure advanced 1.8% to $3.44 as oil prices resumed their gains, with Brent crude oil futures up 2.7% at US$107.42 a barrel at 5pm in Auckland.

Travel and tourism companies were broadly weaker as the higher oil price overshadowed Stats NZ figures showing international visitor numbers rose 0.5% to almost 257,000 in July, and cracked the pre-covid mark operators have been targeting. Air New Zealand fell 1.3% to 37.5 cents and Tourism Holdings declined 0.7% to $2.68.

Separately, the BusinessNZ-BNZ performance of services index showed activity grew for a third month, rising 0.6 of a point to 51.2, its highest level since July 2023.

Doug Steel, an economist at Bank of New Zealand, said that, when combined with the sister manufacturing gauge, the reading was consistent with BNZ’s annual growth forecast of 2% from a year earlier.

“While this is positive news, given the relative size of services in the economy, the rate of GDP growth will be constrained until the expansion in this industry gathers pace,” Steel said in a note.

The kiwi dollar fell to 57.84 US cents at 5pm from 58.26 cents last week.

Outside the benchmark index, Fisher Funds-managed Barramundi dropped 4.4% to 43 cents on an unusually large volume of 1 million shares.

And retirement village operator Metlifecare said it was considering a six-year bond offering to institutional and retail investors, with $100 million of listed notes maturing at the end of the month.

Reporting by Paul McBeth. Image from Curious News.