Markets across Asia were broadly weaker after US President Donald Trump left the G7 summit early and urged an evacuation of Tehran as the Israeli-Iranian conflict intensifies.
The S&P/NZX 50 index was broadly weaker, led by a slump for retailer KMD Brands, which is back near its record-low territory.
Meanwhile, Forsyth Barr analysts played down the chance of Tourism Holdings’ board accepting the initial overture from BGH Capital, with the price holding at the private equity firm’s indicative offer.
And the Hart family’s Walter & Wild has agreed to buy Hansells Masterton, having tipped the contract food manufacturer into receivership earlier this year.
Red alert
The NZX50 declined 50.78 points, or 0.4%, to 12,639.35, with 31 decliners, 14 gainers, and five stocks unchanged, in a day where markets were broadly weaker across Asia after US President Donald Trump abruptly left the Group of Seven nations’ summit in Canada and urged an evacuation of Tehran.
The kiwi dollar traded at 60.68 US cents at 5pm in Auckland from 60.70 cents at 7am and up from 60.18 cents yesterday.
Government data today showed some prices remained firm in May, supporting views among economists that the Reserve Bank will want to see cooler inflation before cutting the official cash rate again.
“We have pencilled in a further 50 basis points of OCR cuts by year end but suspect the RBNZ will want to see concrete signs that pricing pressures are easing before pushing the OCR lower,” ASB Bank senior economist Mark Smith said in a note. “Readings for CPI inflation and inflation expectations will be pivotal.”
Meanwhile, the Bank of Japan kept its key rate unchanged at 0.5% and said it will slow the pace of buying government bonds from April next year. The kiwi rose to 87.72 yen from 86.83 yen yesterday.
Familiar lows
Retailer KMD Brands led the benchmark index lower, falling 7.9% to 29 cents – half a cent off its all-time low earlier this month.
Power companies were mixed after Contact Energy’s latest operating update showed its Clutha hydro scheme was a little below its historical average while its geothermal generation grew. Contact rose 0.6% to $9.17, while Meridian Energy fell 2.2% to $5.82 and Mercury NZ slipped 2.3% to $6.03.
Vulcan Steel dropped 5.6% to $6.09, extending its decline after yesterday’s news that chief executive Rhys Jones will retire at the end of the year, to shift into a non-executive chair role.
Gentrack, which joins the NZX20 at the end of the week, dropped 4.9% to $11.10.
Infratil posted the biggest gain on the day, up 3.9% at $10.82, while SkyCity Entertainment Group – which is being replaced by Gentrack in the top 20 – rose 3.3% to 94 cents. Ebos Group increased 1.8% to $37.17.
Spark New Zealand was the most heavily traded company with a volume of 4.8 million as it gained 0.9% to $2.35.
Deal or no deal
Meanwhile, Tourism Holdings was unchanged at $2.30 on a volume of 3.8 million, holding at the indicative offer put forward by BGH Capital and the Trouchet family, which joined the company when it bought Apollo Tourism & Leisure.
Forsyth Barr analyst Andy Bowley today said in a note he didn’t think the board will accept the offer, which undervalues the rental campervan operator’s potential earnings, but can’t rule out a higher offer emerging.
Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene, said there appeared to be an unusual amount of confidence a deal will be made with the price holding around the indicative offer.
“The fact that it’s at the takeover price makes you think if they go ahead it may be at a higher price,” Sullivan said.
And the Hart family’s Walter & Wild emerged as the buyer for the Hansells Masterton food manufacturer it tipped into receivership earlier this year. Walter & Wild will offer all staff jobs under the new ownership structure, with operations expected to continue without interruption.
“By establishing this new structure, we’ve created a clean slate – one that allows us to honour this iconic brand’s legacy while ensuring it operates on a sustainable footing,” chief executive Harry Hart said in a statement. “We can now focus on stability – supporting our team, serving customers, and proving that Hansells can remain a vital part of the Masterton community and New Zealand story for a long time to come.”
Reporting by Paul McBeth. Image from Curious News.