Poor US jobs data means US Federal Reserve chair Janet Yellen will be in no rush to raise interest rates, which means the current benign world interest rate environment is likely to remain in force for some time to come. Low interest rates have been a key factor behind the New Zealand sharemarket's strong run, due to its high proportion of dividend-paying, high-yielding stocks.
The appetite for local stocks has shown up in the fact that some big parcels of shares in major New Zealand companies have been able to find a home in short order. Cases in point have been the NZ Superannuation Fund's sale of most of its stake in Z Energy.
The Super Fund said it had sold 36.4 million shares in Z Energy in an underwritten block trade at $8.01 per share. The stock closed yesterday at $8.28 a share.
Another one was Metro Glass, which gained in price after Crescent Capital Partners Management, which owns 8.3 per cent of the stock, announced it agreed to sell its stake of 15.3 million shares to First NZ Capital for $1.726 per share. Likewise, the residual shares from SkyCity's latest one-for-10 capital raising were snapped up this week by institutions without too much trouble.
Norris invests in Pie
One of New Zealand's leading business figures Sir Ralph Norris has taken a shareholding in Pie Funds Management. The boutique fund manager was founded by Mike Taylor in 2007 when he was just 27.
It now has $400 million in funds under management, 1500 clients and 20 staff. Norris said he was introduced to Taylor by a mutual acquaintance and came away impressed by what he has achieved with Pie Funds.
"I undertook a thorough due diligence of the business, his investment team, directors and advisers, and decided to join Pie as a shareholder. I hope he and the team perpetuate into the future the success that they have achieved to date," Norris said.
Taylor said he was thrilled to have Norris on board.
"Pie has experienced a large increase in new clients in recent years and we are really proud of our track record, in particular, our longest running fund Pie Growth, which is ranked 8th in the world for performance (by Morningstar) out of over 148,000 funds," he said.
Investors back Webjet
Investors clearly liked Australian ASX-listed Webjet's purchase of New Zealand online travel agent Online Republic. Webjet paid $85 million for the 12-year-old business and when the Australian company's shares started trading after a halt they immediately leapt 11 per cent to $7.03 on Wednesday.
Online Republic is a leading player in car and motorhome rental, and cruise bookings, with brands including Airportrentals.com, Motorhome Republic and Cruise Sale Finder. Webjet is strong in online flight and hotel bookings and its acquisition of Online Republic diversifies its business. At Online Republic's Auckland headquarters it's been "business as usual" this week after the sale was announced on Monday. Existing structures and staff will stay in place. The owners of Online Republic have in turn reinvested 22 per cent of the proceeds of the sale in shares of Webjet. Shares in Webjet closed at A$7.23 yesterday.
ETFs take off
Exchange traded funds, or ETFs, have proven popular among investors. An ETF is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like common stock on a stock exchange. It has been 20 years this month since the launch of the first ETF in New Zealand - the NZ Top 10 fund called TeNZ. New Zealand was the fourth country to launch ETFs, behind Canada (1990), the USA (1993) and Japan (1995). From December 2014 to November 2015, the exchange's Smartshares business launched 18 new ETFs, bringing the total to 23.
Scales' golden apples
Initial public offers put up by private equity firms generally attract a fair degree of scepticism, but the doubters have been proven wrong in Scales Corporation's case.
Scales, the apple grower, logistics and coolstores firm, has seen its share price rally from $1.74 a year ago to close at $3.30 yesterday - a 89.7 per cent gain.
The company's shares were priced at the lower end of an indicative range in the IPO and they had a subdued debut, but the company has proven to be a quiet achiever. Scales listed in July 2014 at $1.61 - a 1c premium to their issue price - and weakened off a little in the first few days, but earnings since then have been impressive, driven in no small part by very strong demand for NZ apples in key export markets but also by its cool store and logistics divisions.
In February, the company said its net profit for the year came to $38.9 million, 87 per cent above its initial public offer forecast and a 112 per cent improvement over the full year.
In March, Hong Kong-based China Resources said it had bought a 15 per cent stake in the company for $56 million, or $2.60 a share, from the company behind the IPO - New Zealand private equity firm Direct Capital Investments. Scales said China Resources could provide support for Scales' business in China.