Auckland Airport took off yesterday, but landed today

Auckland Airport led the New Zealand share market lower as investors cashed in some profit after yesterday’s surge.

Tuesday, July 6th 2021, 6:20PM

by BusinessDesk

The S&P/NZX 50 Index fell 53.29 points, or 0.4%, to 12,758.93. Turnover was $166 million.

Investors sold shares in Auckland International Airport today, sending the price down 3.2% to $7.37, after a takeover bid directed at Sydney Airport stirred up excitement yesterday.

Forsyth Barr analysts today threw cold water on the suggestion Auckland Airport could be the next takeover target for infrastructure investors, saying there would be several hurdles.

A deal would require government approval under the Overseas Investment Act and there are a limited number of local infrastructure acquirers who could participate in a bid, they said.

Auckland Airport already trades at a higher price than Sydney Airport, which has been slower to recover from a vicious sell-off early last year.

The national carrier, Air New Zealand, extended its rally up 1.9% to $1.61 today.

ASB Bank surprised the market by predicting the Reserve Bank to raise the official cash rate as soon as November this year, prompting the kiwi dollar and government bond yields to climb.

BNZ head of research Stephen Toplis said “conditions were ripe” to tighten monetary policy now but that it was unlikely to happen at next week’s monetary policy review.

“It’s not inconceivable the RBNZ feels the need to go earlier, especially if it starts to ponder the fact that it might currently be as much as 200 basis points behind the curve,” he wrote in a note.

The kiwi dollar was trading at 70.71 US cents at 3pm in Wellington, up half a cent from 70.24 cents yesterday.

The trade-weighted index was at 74.49 at 3pm, from 74.10 yesterday. The kiwi traded at 93.63 Australian cents from 93.43 cents, 78.35 yen from 78.01 yen, 59.59 euro cents from 59.23 cents, 50.97 British pence from 50.80 pence, and 4.5672 Chinese yuan from 4.5403 yuan.

Shares in NZ Refining leapt 10.1% to 76 cents as investors absorbed the latest update of its plans to become solely an importer of refined fuel.

Analysis by Forsyth Barr released today also supported the change and lifted the share price target to $1.10.

Media company NZME extended its rally, adding another 1.2% to 88 cents today. The news publisher got a query about why it had climbed almost 17% since midday Monday.

Chief financial officer David Mackrell replied suggesting Jarden’s ‘buy’ rating with a target price of $1.04 was likely responsible for the climb.

Tags: Market Close