Pushpay investors ponder takeover as NZX50 marches on

Pushpay Holdings was the most traded stock on New Zealand's market today as investors weighed up the merits of the $1.53 billion takeover offer.

Monday, October 31st 2022, 6:21PM

by BusinessDesk

The S&P/NZX 50 index increased 208.89 points, or 1.9%, to 11,338.43.

Across the main board, 100 stocks rose and 35 fell. Turnover was busy at $252.5 million, of which Pushpay accounted for $73.8m.

The faith-based services software developed rose 5% to $1.25 when it resumed trading today, 9 cents shy of the $1.34 offer lobbed in by shareholders BGH Capital and Sixth Street, which collectively own 20.3% of Pushpay's shares.

Hobson Wealth Partners director Brad Gordon said the offer price was disappointing and felt like an admission the company was struggling to reach its full potential.

“It feels a little like waving the white flag as a listed vehicle,” he said.

Companies offering reliable dividends led the market higher, with broadband utility Chorus rising 5.9% to $8.31, electricity generator-retailer Mercury NZ advancing 5.2% to $5.82, and Goodman Property Trust up 5.1% at $2.07.

Property investment firms were among those to post gains on the final day of the month, with Kiwi Property Group rising 2.3% to 90.5 cents, Property for Industry increasing 2% to $2.50, and Stride Property up 1.3% at $1.60.

Peter McIntyre, an investment adviser at Craigs Investment Partners, said property stocks had suffered in the past 12 months as interest rates increased, meaning the yield they offered through reliable dividends wasn't as attractive, and describing the selloff as “brutal”.

“They are fundamentally good businesses,” he said.

Exporters were also among companies to gain across the wider board, with components maker Rakon advancing 8% to $1.21 and AoFrio, formerly Wellington Drive Technologies, climbing 6.1% to 14 cents after reporting an 18% increase in third-quarter revenue.

The NZ dollar traded at 58.19 US cents at 3pm in Wellington from 58.08 cents on Friday, with the trade-weighted index at 69.62 from 69.51 last week.

Travel software provider Serko rose 4.9% to $2.98.

Retirement village operator and developer Arvida Group posted the biggest decline on the NZX 50, falling 2.3% to $1.26.

Among the decliners, Synlait Milk fell 1.6% to $3.12 and A2 Milk decreased 0.9% to $5.80.

NZ Rural Land Company slipped 0.9% to $1.06 and automated meat processing system maker Scott Technology fell 3.4% to $2.81.

McIntyre said investors would focus on local economic data including employment figures and building permits, and central bank decisions in Australia, the UK, and the US. He also noted several annual meetings for NZ firms this week.

“It has the potential to be quite a choppy week,” he said.

ASB senior economist Chris Tennent-Brown said in a note that the employment figures would probably show an “extremely tight” labour market, with a modest increase in jobs and potentially a record low unemployment rate of 3.2%.

Tags: Market Close