New Zealand’s S&P/NZX 50 index again ignored most of Asia as it sank for a sixth straight session, with blue-chip companies including Infratil, Auckland International Airport and Ebos Group weighing on the market.
Fletcher Building extended its decline as investors remain unimpressed by its briefing to analysts on Tuesday, with Forsyth Barr trimming its target price on the stock.
Meanwhile, Virgin Australia gained for a second day having rejoined the ASX in a A$685 million initial public offering this week, and was among the top 10 most traded Australian securities on the Sharesies investment platform today.
And ASX-listed Xero halted trading of its shares as it raises A$1.85 billion from institutional investors to help fund its US$2.5 billion cash-and-scrip acquisition of US accounting software firm Melio.
A red streak
The NZX50 slipped 6.52 points, or 0.1%, to 12,460.96, with 18 stocks declining and 27 gaining, while five were unchanged. Turnover across the main board was $128.7 million.
The benchmark was weighed down by declines from major companies, as Infratil slipped 1.5% to $10.25, Goodman Property Trust declined 1.3% to $1.935, Auckland airport slipped 1.2% to $7.58 on a volume of 4.9 million, Mercury NZ shed 0.8% to $5.985 and Ebos Group edged down 0.1% to $37.20.
That was against a backdrop of broadly stronger stock markets across Asia as investors followed Wall Street higher amid optimism the ceasefire between Iran and Israel will hold, and oil prices will continue to ease from their spike.
Briscoe Group led the benchmark index lower, falling 2.7% to $5.50. The retailer joined the NZX50 this week, surging higher as index-tracking investors rushed to buy the stock and has been giving up some of those gains.
Fletcher extended its decline, falling 2% to $2.91 as investors continue to assess how long it will take to turn around the fortunes of the building materials company.
Forsyth Barr analysts trimmed their target price 25 cents to $3.55, saying the disappointments at the investor day included another round of large writedowns, limited confidence in New Zealand’s economic recovery and little detail on self-help at a business unit level.
Not all bad
“On the positive side, the new strategy appears sensible and financial discipline has improved – but after a decade of disappointment, the market is unlikely to rerate the stock until there are tangible signs of delivery,” Forsyth Barr analysts Rohan Koreman-Smit and Paul Laxton Koraua said in a note to clients.
Meanwhile, Sky Network Television posted the biggest gain on the benchmark index, up 2.5% at $2.93, while Freightways – often seen as a barometer for the domestic economy – gained 2.3% to $11.19, and Hallenstein Glasson Holdings advanced 2% to $8.16.
Spark New Zealand increased 0.6% to $2.35 on a volume of 2.8 million, after UBS analysts cut their target price 12% to $3.75, while noting the sale of a controlling stake in its data centre business could generate between $400 million and $600 million for the telco to repay debt.
Air New Zealand slipped 0.8% to 57 cents. Across the Tasman, Virgin Australia was up 3.7% in late trading as it enjoyed a second day on the green side of the ledger after its initial public offering. The stock was the sixth most traded ASX security on the Sharesies platform today.
A familiar name
Meanwhile, trading of Xero’s ASX-listed shares was halted to let the New Zealand-founded accounting software company raise A$1.85 billion in a placement to institutions at a 9.4% discount to partially fund a US$2.5 billion cash-and-scrip acquisition of US firm Melio. Retail investors will get the chance to take part in a A$200 million share purchase plan next month.
The kiwi dollar traded at 60.28 US cents at 5pm in Auckland from 60.19 cents at 7am and 60.13 cents yesterday, after Statistics New Zealand figures showed the annual trade deficit was $3.8 billion in May, narrowing from almost $5 billion in April.
The local currency rose to 92.76 Australian cents from 92.59 cents yesterday after Australian Bureau of Statistics figures showed the annual pace of inflation slowed more than anticipated across the Tasman, raising the prospect of an earlier rate cut by the Reserve Bank of Australia.
Reporting by Paul McBeth. Image from Curious News.
