Pacific Edge surges; NZX 50 falls

Shares in cancer diagnostic firm Pacific Edge skyrocketed, climbing more than 20% on a deal with a large US insurer, even as the wider share market edged lower.

Friday, April 9th 2021, 6:40PM

by BusinessDesk

The S&P/NZX 50 Index fell 58.25 points, or 0.5%, to 12,574.35. Within the index, 23 stocks fell, 21 rose, and six were unchanged. Turnover was $203.1 million.

Pacific Edge was the best performer by a wide margin. Investors added $100m, or more than a fifth, to the cancer diagnostic firm’s market capitalisation after its Cxbladder test was approved by the biggest healthcare group in the US.

The insurer, United Healthcare, has over 50m members and a 14% share of the nation’s health insurance market. This means more than 110m Americans are covered to use the Cxbladder test by their insurance scheme.

The company’s share price exploded, closing up 21.2% at $1.20 and giving it a market capitalisation of $560m. This is still below the all-time high of $1.57 back in 2014, and marginally below its January peak of $1.23.

Other parts of the market were less jubilant. A2 Milk led the market lower, falling 3.3% to $8.60 after a sudden rally yesterday. Pushpay Holdings declined 2.9% to $2.02 and Ryman Healthcare dropped 2.6% to $15.10.

Air New Zealand bounced 1.1% to $1.83 as the government agreed to expand its $900m credit facility to $1.5 billion, allowing the national carrier to further delay its capital raise. Brokers have estimated the airline may have to raise as much as $1.5b.

The extended loan also has less onerous terms than its previous iteration as the risk of default has been seen to subside as the worst of the pandemic has lifted.

Transportation technology services company, Eroad rose 5.6% to $4.94 after signing its largest Australian enterprise customer to date.

Ventia, an infrastructure management firm, has committed to subscribing to Eroad’s services for a five-year term.

Forsyth Barr, which acted as a joint lead manager in My Food Bag’s IPO, released equity research into the stock. The analysts set the valuation at the same price as in the initial public offer, at $1.85, but it failed to move the stock which edged down 0.6% to $1.60.

The Forsyth Barr analysts emphasised the stock was trading at a lower price to earnings ratio than both the NZ market median and its international peers such as Hello Fresh.

The kiwi dollar was trading at 70.39 US cents at 5pm in Wellington, up from 70.31 cents yesterday.

The trade-weighted index was at 73.95 at 5pm, from 73.86 yesterday. The kiwi traded at 92.30 Australian cents from 92.06, 76.95 yen from 77.01 yen, 59.15 euro cents from 59.20 cents, 51.26 British pence from 51.07 pence, and 4.6098 Chinese yuan from 4.6004 yuan.

Tags: Market Close