Market close: Mayor Brown causes market turmoil over airport

Auckland International Airport turned over $64.5 million in volume and traded close to eight million shares today after Auckland’s mayor made comments – now disputed – about the airport doing a capital raise and that Auckland council would be selling its 18% stake in the airport because of this.

Thursday, December 15th 2022, 6:12PM

by BusinessDesk

Mayor Wayne Brown’s comments caused huge ripples in the market after he said in a council meeting today that “further dilution” of the council’s 18% stake in AIA was “almost inevitable”.

“They’re about to go do a major raising to fund a new domestic airport, and we will not be contributing to that,” he said.

“So our 18% will soon become about 11% or 10%, and at that stage it becomes less and less strategic.”

Auckland International Airport shares were swiftly put in a trading halt for almost an hour after the mayor's comments were published.

The trading halt only ended after the airport pointedly informed the market that it had “no plans” to carry out an equity raise.

“We have made no announcements to the market in this regard,” the company said in a statement.

Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene, told BusinessDesk that Brown’s surprising comments had taken him completely by surprise.

“I thought it was one of the most bizarre things I've ever heard of,” he said. “Auckland International Airport’s books are perfect and they have very little debt. So, the off the cuff comments by mayor Brown took me aback."

Sullivan said the stock’s share price was sitting at $8.04 per share and $600,000 traded before the trading halt and ended the day up 0.5% to $8.05 with almost $65m traded.

Across the broader market, the S&P/NZX 50 index rose 17 points, or 0.15%, to 11,601.99. Turnover was $192.1m.

Telco Spark was down 0.2% to $5.24 after 2degrees agreed to sell its passive tower assets for $1.08 billion to Connexa, the tower company spun out from Spark’s sale of its own towers earlier this year.

The deal includes 1,124 mobile towers and Spark won't contribute capital for the acquisition, diluting its 30% stake in Connexa to 17% from 30%, with Canadian partner Ontario Teachers' Pension Plan increasing its stake to 83% from 70%.

PGG Wrightson was up 3.3% to $4.34 after it was revealed that Australian agri-services firm Elders had taken up an 11% stake in the company for just over $37m.

Infrastructure investment firm Infratil edged down 0.9% to $8.75 after it announced it had launched a new renewable energy investment company, Mint Renewables, in partnership with investment firm Commonwealth Superannuation Corporation (CSC).

The new entity is 73% owned by Infratil and 27% by CSC and the investment would be managed by NZ-based asset management firm Morrison & Co.

Infratil’s initial capital commitments are A$219m (NZ$233m) and CSC’s A$81m for a total of A$300m that would be invested over the next three to five years.

Retailer Hallenstein Glasson Holdings, seafood company Sanford and ANZ Bank held their annual meetings today.

Hallenstein was up 1.9% to $5.45, Sanford fell 1.2% to $4.24 and ANZBank edged down 0.2% to $25.30.

New Zealand’s global domestic product data for the September quarter also came out today, showing that the economy had expanded 2% – which was well above expectations and well above its global peers.

Economists had tipped the economy to expand by 0.9%, according to the median of 16 polled by Bloomberg. The Reserve Bank of New Zealand had forecast an expansion of 0.8%.

The NZ dollar was trading at 64.60 US cents at 3pm in Wellington, up from 64.45 US cents yesterday.

Tags: Market Close