NZ shares gains, Infratil surges on demand for datacentres

New Zealand shares climbed, and Infratil hit an all-time high as Australia’s A$24 billion (NZ$26b) AirTrunk deal stoked investors’ appetite for data centres.

Thursday, September 5th 2024, 6:07PM

by BusinessDesk

The S&P/NZX 50 Index rose for a second day, up 125.31 points, or 1%, at 12,678.66. Across the main board, 87 stocks gained, 55 fell, and 37 were unchanged. Turnover was $147.8 million, of which Infratil accounted for $26.1 as it rose 5.6% to $11.895 on a volume of 2.2 million shares.

Datacentres operators on both sides of the Tasman rallied after US private equity firm Blackstone and the Canada Pension Plan Investment Board agreed to buy AirTrunk, valuing the datacentre operator and its development pipeline.

ASX-listed NextDC was up 8.9% in afternoon trading, attracting a please explain from the Australian Securities Exchange (ASX) over the rapid rise, to which it noted “significant recent activities” in the datacentre space and that it understood it was added to the NAREIT Real Estate Index in the latest quarterly review.

“That’s all across the trans-Tasman – Infratil, NextDC, Goodman Group, Charter Hall – anything with a datacentre on its back” is stronger, said Brad Gordon, an investment adviser at Forsyth Barr.

Local stocks

Infratil hit an all-time high of $12.04 during Thursday’s trading as it added $604.1m to its now $11.5b market capitalisation, leapfrogging Auckland International Airport to become the country’s third-biggest listed company behind Fisher & Paykel Healthcare and Meridian Energy. Auckland Airport increased 0.1% to $7.50 on a volume of 1.1m, F&P Healthcare edged up 0.1% to $37.52 and Meridian rose 0.9% to $6.18.

Just four years ago, AustralianSuper lobbed in a $5.37b bid to takeover Infratil, which was roundly rejected by the board but seemed to catalyse a step up in its valuations.

Goodman Property Trust, targeting data centre developments, rose 1.7% to $2.12.

Spark NZ, which also has aspirations to build data centres, fell 1.4% to $3.52 on a volume of 4.6m, the day’s most heavily traded stock.

Forsyth Barr’s Gordon said the mobile and broadband retailer was typically held for its dividend, and investors were questioning the sustainability of that given its investment intentions, having missed its earnings forecast last month.

“Datacentres are not cheap to build and there’s a lot of investment in that space by some pretty big players,” he said.

Hallenstein Glasson Holdings led the NZX 50 higher, climbing 7.2% to $6.40 after saying annual sales rose 6.3% in the 12 months ended Aug 1, with gross margins widening by 200 basis points. Net profit rose as much as 8.6%.

Gordon said the retailer was a good operating in the right part of the market with good price points and turnover.

“Them and Briscoes are both really strong performers over the years,” he said.

Briscoe Group rose 0.7% to $4.68 and KMD Brands advanced 3.8% to 55 cents, while Warehosue Group declined 0.8% to $1.26. Michael Hill International was unchanged at 59 cents.

Among companies shedding rights to their dividends today, Sky Network Television was unchanged at an adjusted $2.68, Kiwi Property Group rose 1.4% to an adjusted 97 cents with 2.1m shares traded, Channel Infrastructure advanced 0.2% to an adjusted $1.68, Steel & Tube Holdings was unchanged at an adjusted $1.01, Precinct Properties NZ declined 1% to an adjusted $1.30 on volume of 1.5m and Vector rose 2.6% to an adjusted $3.84.

Synlait Milk rose 3.9% to 40.5 cents after raising its milk price forecast to $8.60 per kilogram of milk solids, trumping Fonterra’s $8.50/kgMS forecast. Fonterra Shareholders’ Fund units were unchanged at $4.48.

Vista Group International advanced 1% to $3.06. The cinema software analytics firm rejected a proposal by 19.9% shareholder Potentia for several board seats and is working with its shareholder on an alternative proposal.

Among the more heavily traded companies, Vital Healthcare Property Trust fell 3.5% to $1.94 on a volume of 4m, having shed rights to its dividend on Wednesday.

On Thursday, Forsyth Barr lodged a notice to the exchange saying its Vital Healthcare holding increased to a 9.3% stake from 8.1%.

Arvida Group, under a takeover offer at $1.70 a share, was unchanged at $1.66 on a volume of 3.6m shares.

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