Jarden Brief: Could Z Energy be a takeover target?

Australian media have speculated that Z Energy could be a takeover target. Photo / File

Keeping you up to date with the latest market moves, in association with Investment firm Jarden

New Zealand

The NZX50 was in the green, up 1.1 per cent yesterday.

Leading the charge was the energy and consumer non-cyclicals sectors, up 2.4 and 1.8 per cent, respectively.

In contrast, technology fell 0.9 per cent while real estate declined by 0.3 per cent.

Freight and logistics company Mainfreight surged 4.6 per cent on the back of its annual shareholders meeting.

A 14.5 per cent increase in revenue for financial year 2021 to $3.54 billion was announced, with profit before tax up 27.2 per cent to $262.4 million.

Total dividend for the year was 75c per share, a 16c increase on the previous year. Investors responded well to this meeting, bidding up the stock.

Aged care provider Ryman Healthcare rose 3.9 per cent, on the back of a well-received annual meeting of shareholders. It announced record first quarter 2021 sales, with cash receipts of $403 million, and the purchase of a new retirement village site in Melbourne.

Freightways, another freight and logistics company, was a top performer, up 2.7 per cent. This continues a strong year of share price performance for the company.

Corporate travel software company Serko fell 2.1 per cent. On Wednesday it announced changes to the board with long-standing member Simon Botherway standing down.

Spark New Zealand and agribusiness company Scales both fell 1.1 per cent.

The July ANZ Business Outlook Survey results were released yesterday. Business confidence fell 3 points to net -3.8 per cent. Notably, the survey captured a rise in pricing intentions with cost expectations rising 2 points to 88.2 per cent and a net 61.3 per cent of businesses who responded intending to raise their prices.

INTERNATIONAL
United States

The economic data, released yesterday, were a surprise as US GDP rose only 6.5 per cent in the quarter ending June 2021, well below the 8.4 per cent estimate. Jobless claims fell to 400,000 which was 20,000 more claims than expected for the week.

Despite the worse than expected economic data, the major US indices were all in the green this morning. The S&P 500 improved by 0.6 per cent, the DJIA was up 0.6 per cent, and the NASDAQ rose 0.3 per cent.

Financials and materials were leading the markets higher, rising 1.4 and 1.3 per cent, respectively. The only sector underperforming was communication services, down 0.8 per cent.

The top performer of the session as orthodontist company Align Technology, increasing 8.8 per cent, hitting a new 52-week high. Next in line was semiconductor producer Advanced Micro Devices, up 7.1 per cent, making it on to the leader board for a second day in a row. Rounding out the top performers was Cognizant Technology Solutions. The data and AI services consulting firm rose 6.5 per cent.

The biggest decliner of the day was workspace software provider Citrix Systems, dropping 14.2 per cent, hitting a 52-week low. The company released its quarter two earnings result which were below analysts' expectations. Global computer software and services company, PTC, also underperformed, decreasing by 7.7 per cent, and digital payment company, PayPal Holdings, declined by 5.7 per cent, after posting mixed quarter two results.

Rest of the world

The odds have turned for the major Asian indices, as they were all trading higher overnight. The Nikkei was up 0.7 per cent, the Hang Seng rallied 3.3 per cent, the Shenzhen climbed 3.1 per cent, and the Shanghai composite increased by 1.5 per cent.

Commodities

Futures and commodities also had a good session, with Gold rising 1.7 per cent to US$1,830.50 per ounce and oil trading 1.4 per cent higher at US$73.41.

Cryptocurrencies were a mixed bag this morning, with Bitcoin decreasing by 2 per cent and Ethereum edging slightly higher by 0.4 per cent.

The US 10-year treasury rate stayed relatively unchanged, yielding 1.271 per cent.

Australia

The ASX 200 rose by 0.5 per cent, seemingly unperturbed despite a massive 239 new community cases being detected in New South Wales.

Mining stocks continued to be hot, with the sector climbing 1.5 per cent amidst rising inflation concerns.

On the other hand, real estate stocks fell with the recent lockdowns likely to affect foot traffic - and thus commercial property values. Even Stockland, which owns a large amount of residential property fell despite global ratings agency S&P predicting that residential house prices will rise by 10 per cent for the next two years.

Sports betting company PointsBet was placed into halt after announcing a A$400 million capital raise and its fourth quarter results. The company reported US net wins for the quarter, up 1,420 per cent to A$17.7 million, with turnover increasing almost tenfold to A$491.3 million. The newly acquired iGaming division also recorded a A$1.5 million contribution in its first two months of operating. The company is targeting a 10 per cent share of the North American market, which it estimates will grow to a US$54 billion opportunity in a decade.

The results were accompanied by news that three of the original founders of the company would be selling 15 per cent of their total shares. Although sales by management are generally perceived to be bad news, it seems that 1.45 million of the shares will be acquired by the current chairman at A$10 a share. Institutional investors will also have the opportunity to take part in the placement at A$10 a share, while existing shareholders will receive a discounted entitlement offer at A$8 per share.

Meanwhile, Australian Pharmaceutical Industries has formally rejected Wesfarmer's A$1.38 per share bid; with the board stating that the bid does not properly consider its growth prospects.

In a busy day for M&A activity, markets data provider IRESS also received an unsolicited takeover to acquire all its shares from EQT Fund Management - a large Swedish investment organisation. As in the case of Australian Pharmaceutical Industries, the board of IRESS also rejected the bid.

With all the speculative takeover attempts flying around the market, Australian media have now focused their sights on speculating about a potential takeover for NZX-listed Z Energy - with ASX-listed Ampol (owner of Gull) and other offshore buyers being floated as potential counterparties.

• For more information on the latest market moves, get in touch with Jarden.

Disclaimer: This Morning Brief has been prepared in good faith and reflects opinions and views at the time of publication, using external sources, systems and other data and information we believe to be accurate, complete and reliable at the time of preparation. We make no representation or warranty as to the accuracy, correctness and completeness of that information, and will not be liable or responsible for any error or omission. This Morning Brief is not to be relied upon as a basis for making any investment decision. Please seek specific investment advice before making any investment decision. Jarden Securities Limited is an NZX Firm, a broker disclosure statement is available free of charge at www.jarden.co.nz. Jarden is not a registered bank in New Zealand. Full disclaimer available at: https://www.jarden.co.nz/limitations-and-disclaimera>