New Zealand’s S&P/NZX 50 index was among the worst performers across Asia as software firms Vista Group International, Gentrack and Serko led the bourse lower in its steepest one-day drop since late May, while Japanese and Australian markets tested new highs.
Spark New Zealand confirmed the rumours that Pacific Equity Partners will buy a controlling stake of its data centre unit, but didn’t find much support among investors with the telco reversing earlier gains.
Meanwhile, PGG Wrightson was the pick among companies reporting today as the rural services firm showed off how well the primary sector’s performing, while meat processor Alliance Group confirmed Ireland’s Dawn Meats as its preferred partner to recapitalise the business.
And Black Pearl Group is at it again, raising $15 million to pay for its recent acquisition and confirming plans to get a second listing across the Tasman.
That’s sharp
The NZX50 dropped 152.18 points, or 1.2% to 12,759.68 in its steepest one-day decline since May 28, as 35 stocks fell, nine gained and six were unchanged. Turnover across the main board was $168.1 million.
The local bourse was a stand-out across Asia as Australia’s S&P/ASX 200 hit a new record after the Reserve Bank of Australia met expectations with a quarter-point rate cut to 3.6%, while Japan’s Nikkei 225 surged to a new high after returning from a long weekend.
“The outlook for unemployment opens the door for more rate cuts,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “And there’s big news with respect to the US inflation data this week.”
New Zealand’s Reserve Bank will review the official cash rate next week and is expected to cut it by a quarter-point to 3%. The kiwi dollar traded at 59.39 US cents at 5pm in Auckland from 59.50 cents yesterday.
Vista led the market lower, falling 5.1% to $3.32 ahead of its first-half result on Thursday. US-listed cinema chain operator AMC Entertainment beat expectations overnight when reporting its June quarter result.
Other software firms were also weaker, with Gentrack sinking 5.1% to $9.35 and Serko declining 2.6% to $2.66. Outside the benchmark index, Eroad slipped 0.5% to $2.08.
We’ve been expecting you
Spark was the most heavily traded stock on a volume of 3.3 million, as it fell 2.5% to $2.54, reversing earlier gains, after confirming PEP will take a 75% stake of the data centre business for $486 million upfront, and potential earnouts of up to $130 million.
Among other heavyweights on the bourse, Infratil fell 2.2% to $11.785, Mainfreight dropped 2.9% to $58.75, Meridian Energy declined 1.9% to $5.60, Ebos Group slipped 1.9% to $40.38 and Fisher & Paykel Healthcare decreased 0.3% to $36.78.
The dual-listed Australian banks were among the few gainers after the RBA’s rate cut, with ANZ Group Holdings posted the biggest gain on the NZX50, up 2.1% at $35.04. Westpac Banking Corp increased 0.9% to $37.79.
SkyCity Entertainment Group rose 2.1% to 99 cents after a review found it’s a suitable licensed operator of the Adelaide casino despite its past shortcomings running the venue.
Vulcan Steel gained 0.9% to $6.63 after saying the downturn in steel markets is starting to show signs of lifting.
Outside the benchmark, PGG Wrightson rose for a fourth day, climbing 4.1% to $2.56 after reporting a predictably strong result and declaring an increased final dividend.
McIntyre said investors responded well to the strong result and the hiked dividend, and that Wrightson probably stood to benefit from the Irish capital injection into meat processor Alliance Group, which has picked Dawn Meats as its preferred partner to buy a 65% stake for $250 million.
Among other companies reporting today, Millennium & Copthorne Hotels NZ rose 0.4% to $2.86 and CDL Investments decreased 1.2% to 80 cents.
Black Pearl Group halted trading of its shares at $1.10, announcing plans to raise $15 million through a placement and a non-renounceable rights issue at 95 cents a share to help fund its acquisition of B2B Rocket.
Reporting by Paul McBeth. Image from Curious News.
