NZX50 dips for third day in a row

The New Zealand sharemarket lost ground for the third successive day, weighed down by the Infratil equity raising and a sudden increase in wholesale interest rates.

Thursday, June 8th 2023, 6:33PM

by BusinessDesk

The S&P/NZX 50 Index slid mid-morning and closed at 11,715.74, down 43.4 points or 0.37%. The index has fallen 1.5% so far this week and is up 2.1% for the year.

There were 43 gainers and 81 decliners over the whole market on volumes of 41.65 million share transactions worth $163.32m.

Wholesale interest rates increased around western markets, with the NZ 10 Year Government Bond yield rising 11.5 points to 4.572%.

Utilities investor Infratil declined 25c or 2.48% to $9.85 after completing a $750m placement at $9.20 a share to help fund the purchase of the remaining 49.95% shareholding in One NZ (formerly Vodafone).

Infratil is seeking a further $100m through a retail offer to shareholders that opens on Tuesday.

While the Auckland council debated selling 8.08% of its 18.08% shareholding, Auckland International Airport was down 0.005c to $8.58 after outlining a new schedule of increased airline landing charges up to 2027 and beginning on July 1 this year.

Some charges will more than double by the end of the five-year price-setting period, and will help fund $2.5 billion worth of development, including the new domestic terminal (integrated with international), stormwater upgrades, and baggage handling and transport improvements.

Overall, the airport has a $3.9b development pipeline over the next five to six years, and it said new equity may be raised in future.

Matt Goodson, managing director of Salt Funds Management, said if Auckland council reduced its shareholding, it might have a modest short-term impact on the airport’s share price because of the number of shares being sold.

“What people forget is that when the airport had its post-covid capital raise ($1.2b), the council couldn’t participate at $4.66 a share and everyone else was tripping over themselves to take up the offer,” he said.

“The airport is suggesting another equity raise down the track and if the council was unable to buy in again, then maybe it’s not the right owner of the (airport) asset.”

Goodson said there was no rationale in the suggestion that Auckland council had a “blocking stake” should a takeover ever eventuate.

“That’s just a soundbite.”

Airlines unhappy

He said there was a strong reaction from Qantas and Air NZ over the new charges which were "at the very top end of anyone’s expectation. Qantas even suggested it might impact Jetstar’s operations.”

In a joint statement, the airlines said the steep price increases over the next five years will push up the price of travel, and tourism and trade will suffer.

Goodson said the airport was going so hard with capital expenditure that the new fees being charged were becoming a political issue.

Air NZ was up 1c to 78c after upgrading its full-year operating earnings to no less than $580m, from the previous guidance of $510m-$560m. The national airline told the market that demand was stronger than normal at this time of the year and jet fuel prices have fallen further.

Meridian Energy, down 11.5c or 2.09% to $5.38, told the market that the demand response agreement with NZ Aluminium Smelter till the end of next year is now unconditional. Electricity consumption at the Tiwai Point smelter will be reduced by up to 50MW when requested by Meridian to reduce pressure on the network.

Other leading energy stocks Mercury declined 167.5c or 2.52% to $6.37, and Contact was down 15c or 1.85% to $7.95.

Cancer diagnostic firm Pacific Edge lost another 0.007c or 6.42% to 10.2 after its darkest day on the market the day before when the share price plunged 78%.

Summerset Group was down 20c or 2.18% to $8.99; Port of Tauranga declined 14c or 2.24% to $6.11; AFT Pharmaceuticals shed 16c or 4.1% to $3.74; and Restaurant Brands decreased 18c or 2.66% to $6.59.

Stride Property declined 3c or 2.21% to $1.33; Delegat Group shed 31c or 3.2% to $9.39; Accordant Group fell 14c or 8.54% to $1.50; and Savor was down 1.5c or 4.23% to 34c.

Ebos Group rebounded 45c to $35.95; Heartland Group increased 8c or 5.03% to $1.67; KMD Brands was up 2c or 1.87% to $1.09; and Warehouse Group added 3c or 1.84% to $1.66.

Skellerup Holdings gained 7c to $4.70; Kiwi Property increased 3c or 3.7% to 92c; Vista Group was up 4c or 2.82% to 1.46; and Cannasouth rose 2.5c or 9.8% to 28c.

Software firm Blackpearl Group was up 1c or 2.27% to 45c after telling the market it gained $339,536 of new annual recurring revenue in May.

Medicinal cannabis company Rua Bioscience, unchanged at 16.2c, has announced its first sales in Germany – 13,000 grams or 28 pounds of dried flower product.

Tags: Market Close