NZ shares struggle as Pushpay finds a suitor

Pushpay’s surprise boost from a takeover tilt today wasn’t enough to pull New Zealand’s benchmark index out of its slump with a number of heavyweight companies dragging it down.

Tuesday, April 26th 2022, 6:12PM

by BusinessDesk

The S&P/NZX 50 index fell 95.2 points, or 0.8%, to 11,813.18. Within the broader equity market, 38 stocks rose, 99 fell and turnover was $175 million.

Pushpay shares climbed as much as 27% after saying third parties were looking to buy the company and that it hired Goldman Sachs to advise it. the shares ended the day up 23% at $1.27, a three-month high.

Peter McIntyre from Craigs Investment Partners said Pushpay’s success was a “good boost” for the market as well as the company.

“Pushpay has been beaten up share price wise and today’s announcement has given them a good boost,” he said.

He said it was “no surprise” to see the stock trading so high today but that the next steps were uncertain.

“Investors are looking towards New Zealand technology and seeing an opportunity there,” McIntyre said.

“But tomorrow is a new day and the market is waiting to hear what’s next when it comes to Pushpay.”

Travel software firm Serko rose 0.8% to $4.84 today, which McIntyre said was likely influenced by Pushpay’s good fortune and the positive sentiment flowing into the technology sector following the announcement that billionaire Elon Musk was buying Twitter for US$44 billion.

“For current investors, the privatisation of Twitter means they receive a premium on the current price of their stocks,” Jarden global equities analyst Jeremy Ward said in a note.

“For Musk, it means he can make more autonomous changes to the company.”

Vulcan Steel rose 3.6% to $10.33 after upgrading its earnings guidance for the third time since the steel company listed on the NZX last November.

“Vulcan has had to deal with inflation and they’ve managed to pass on those costs and still do well,” McInytre said.

“They’ve more than met market expectations.”

Vulcan’s forecast was why Steel & Tube Holdings also rose 5.4% to $1.56 today, McIntyre said and was “definitely” having a flow on effect on other industrial companies on the NZX.

NZ King Salmon rose 5.8% to 36 cents today, after its share price jumped 45% on Friday before the long weekend.

Accordant Group, New Zealand’s self-described largest recruitment company – was up 8.5% to $2.05 and one of the stronger performers on the main board today.

Wine minnow Marlborough Wines Estates increased 2.1% to 24 cents after saying its 2022 harvested volume had been exceeded by about 12%.

McIntyre said some of the index’s bigger heavyweights “hadn’t had a great day” which had caused the index to shrug off the good news and slide.

“Our overall market performance has been weaker and indexes are down well over half a percent,” he said.

Dairy had a bumpy day with A2 Milk dropping 2.6% to $4.90 and Fonterra Shareholders' Fund units slipping 2.5% to $3.10.

“There's still concerns around what's happening with China and that concern is hitting some companies on the NZX harder than others,” McIntyre said.

Fisher & Paykel Healthcare dropped 1.7% to $21.91 while AFT Pharmaceuticals was up 0.80% to $3.77.

Among other blue chip stocks to fall, Meridian Energy was down 2.1% at $4.73, Mainfreight slipped 2% to $78.91, Contact Energy declined 1.9% to $7.96 and Auckland International Airport fell 1.5% to $7.73.

Tags: Market Close