NZ sharemarket marks four days of rises

The re-energised New Zealand sharemarket made another significant gain on a lively day featuring a $150 million takeover offer for MHM Automation, one of the country’s oldest engineering companies.

Friday, November 3rd 2023, 6:51PM

by BusinessDesk

The S&P/NZX 50 Index traded steadily in the afternoon, though it did dip slightly when NZ First and its leader Winston Peters joined the coalition negotiations to form a new government following the wrap-up of special votes.

The index closed at 11,118.92, up 74.48 points or 0.67% and gained 3.24% for the week after four successive days of rises. It was the best week of trading since early July last year.

The index has now fallen almost 3% this year, an improvement from the decline of 6.2% at the end of last week.

There were 100 gainers and 32 decliners over the whole market, with 26.16 million shares worth $69.12m changing hands.

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said the market was again driven by the fall in bond yields and the move by the US Federal Reserve to keep its funds rate on hold.

“We have a yield-sensitive market, and any indication of interest rates falling is pleasing,” Sullivan said.

“Some people in the US are expecting three rate cuts next year, but the Fed has commented it is not even thinking of cuts. The Fed is well aware the market would take off with any (reduction) signal and possibly re-ignite inflation.”

Even so, Wall Street had another strong day, with the Dow Jones Industrial Average increasing 1.7% to 33,839.08 points, the S&P 500 rising 1.89% to 4317.78, and the Nasdaq Composite up 1.78% to 13,294.19. The three indices were on track for gains of around 5% for the week.

MHM Automation, which was started in Christchurch in 1884 by James Mercer, surged 61c or 67.03% to $1.52 after receiving the takeover offer from Ohio-based American company Bettcher Industries.

Takeover interest

The offer, backed by the MHM non-conflicted directors, is $1.70 a share, a premium of 86.8% on the closing price the day before. Both companies are leading manufacturers of automated equipment for food processing plants.

Mainfreight was up another 90c to $61, jumping from $56.30 in a week. Fisher and Paykel Healthcare rebounded a further 40c or 1.86% to $21.90. Port of Tauranga recovered 7c to $5.15.

Freightways was up 8c to $7.88; a2 Milk gained 6c to $4.33; Heartland Group added 3c or 1.9% to $1.61; Manawa Energy collected 8c or 1.9% to $4.30; and Scales Corp increased 16c or 5.44% to $3.10.

Retailers KMD Brands increased 4c or 4.82% to 87c, and The Warehouse was up 4c or 2.3% to $1.78; Other gainers were Turners Automotive, up 8c or 1.96% to $4.17; Property for Industry, increasing 5c or 2.35% to $2.18; Arvida Group collecting 5c or 4.55% to $1.15; Tourism Holdings rising 20c or 5.97% to $3.55; and ikeGPS up 3c or 5.45% to 58c.

Telco Spark was down 6c to $5.01 after telling shareholders at the annual meeting that trading was steady. Mobile revenue continues to grow strongly, broadband and Cloud margins have stabilised, and voice margin continues to decline.

Spark confirmed full-year operating earnings (Ebitda) guidance at $1.215b-$1.26b compared with $1.193b in the 2023 financial year. The dividend is expected to slightly increase to 27.5c a share. Spark is investing $250m-$300m into data centres, a market that is expected to expand rapidly.

Technology companies Serko fell 20c or 4.71% to $4.05; Eroad gained 2c or 2.99% to 69c; and Smartpay increased 6.5c or 4.55% to $1.495.

Burger Fuel fell 4c or 13.11% to 26.5c, and 2 Cheap Cars was also down 4c or 5.71% to 66c.

Channel Infrastructure, up 1c to $1.46, completed its $100m six-year bonds offer at an interest rate of 6.75%.

Tags: Market Close