NZ shares fall as Ryman completes capital raise bookbuild
New Zealand shares fell as Ryman Healthcare completed its bookbuild and investors worried about cyclone damage and interest rate policy.
Monday, February 20th 2023, 6:55PM
by BusinessDesk
The S&P/NZX 50 Index fell 248 points, or 2.1%, to 11,896.05. Turnover was $121 million.
Ryman Healthcare drove much of the market weakness on Monday, as it completed the institutional component of its $902 million rights issue.
Shares in the retirement village operator finished down 4.6% at $5.75, well below the $6 offer price, and traded as low as $5.60 during the day.
Peter McIntyre, an investment advisor at Craigs Investment Partners, said some of his clients had been unhappy with aspects of the company’s management.
But it wasn’t just Ryman dragging the benchmark index lower, only a fifth of stocks managed to avoid a fall.
McIntyre said investors were still assessing what impact the cyclone could have on the economy and the Reserve Bank of NZ's interest rate decision later this week.
The exact cost has yet to be determined – the government has suggested approximately $13 billion – and could result in higher inflation due to supply shortages and rebuilding demand.
Still, traders have repriced wholesale market rates to reflect an increased chance of a smaller rate hike in the monetary policy statement on Wednesday.
While lower rates could be a net positive for share prices, market movements didn’t reflect any decrease in wholesale market rates.
Stocks considered to be more speculative took sharp falls today, albeit on lighter volume.
Serko dropped 8.2% to $2.48, Vista Group fell 7.5% to $1.35, and A2 Milk was down 7.4% to $7.18.
McIntyre said the latter was due to investor doubt as to whether the infant formula exporter could maintain margins with intensifying competition in China.
Other stocks posting significant falls included Tourism Holdings down 4.6% at $3.91, Mercury NZ which fell 4.4% to $6.19, and Mainfreight which slipped 3.9% to $73.50.
Pushpay Holdings dropped 3.1% to $1.26 – despite being subject to a takeover offer at $1.34 – after one of its largest shareholders said it would vote against the deal.
In a rare public statement, ACC said the bid price undervalues Pushpay and noted the offer “only just falls within the Independent Adviser’s valuation range”.
Scales Corporation rose 3.5% to $3.22, reversing a sharp decline it has been experiencing ever since Cyclone Gabrielle hit its apple orchards in Hawkes Bay.
The horticultural company said four of its fifteen orchards had been damaged and it was not covered by crop insurance for this event.
Scales has withdrawn its profit guidance for the 2023 financial year and its share price was down more than 14% in the past five days.
The NZ dollar was trading at 62.30 US cents at 3pm in Wellington, down from 62.43 cents yesterday.
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