King Salmon shares jump out of the water

New Zealand shares generally fell on Friday, but NZ King Salmon raced in the opposite direction as its shares detached from the right to participate in its upcoming capital raise.

Friday, April 22nd 2022, 6:55PM

by BusinessDesk

The S&P/NZX 50 Index fell 45.5 points, or 0.4%, to 11,915.88. Turnover was $264 million, boosted by the rebalance of the S&P Global Clean Energy Index.

Fish farmers NZ King Salmon did not follow this trend and its share price exploded by more than 45% in relatively light trading.

The company is doing a renounceable rights offer – like Air NZ – and its shares shed the right to take part in the capital raise today.

This meant the shares began trading at the diluted share price, closing last night at 47c per share and opening this morning at 25.5cs.

It is not clear that all investors understood that is what happened, as King Salmon shares were bid up 45% to 34c today. The company is raising $60m at 15c per share.

Air New Zealand rights also took off today – up 15% to 73.8 cents – as ordinary shares climbed 4.7% to 89.5 cents. The two instruments are trading tightly in sync.

Shares in Serko also rose 4.1% to $4.80 after American Airlines reported overnight that air travel was recovering fast, and is expected to be profitable this quarter.

Other parts of equity markets were generally weaker, following US markets after the Federal Reserve chair signalled a 50-basis point rate hike was on the agenda at the next meeting.

Skellerup Holdings led the market lower, falling 3.4% to $5.71, followed by Freightways down 2.4% at $12.00.

Some growth stocks continued to lose ground: Pacific Edge fell 2.1% to 92c, Pushpay Holdings dropped 1% to $1.03, and Trade Window was down 1.6% at $1.82.

Jarden Australia analysts said investors have been rotating to value stocks as interest rate risk puts pressure on yields and growth stocks fall out of favour.

“We see the share price sell-off as creating buying opportunities in high-growth technology stocks that have not been available over the past several years of low-interest rates,” they wrote.

A broad cross-section of stocks were weaker such as NZX, Meridian Energy, and Fisher & Paykel Healthcare all falling 1.5% to $1.32, $4.38, and $22.29 respectively.

Oanda analyst Jeffrey Halley said the hawkish remarks from the Federal Reserve chair had lifted the yield on US government bonds and triggered a flight to the safety of the US dollar.

“The sentiment-sensitive Australian and New Zealand dollars both tumbled overnight, unwinding all the previous day’s gains,” he said.

The NZ dollar was trading at 67.16 US cents at 3pm in Wellington, up almost 1% from 67.8 cents yesterday.

The trade-weighted index fell from 73.59 to 73.26 but the kiwi held its own against the Australian dollar, trading at 91.29 today from 91.22 yesterday.

Tags: Market Close