Another Mainfreight surge and billion-dollar corporate activity across the Tasman provided a positive tone to the New Zealand sharemarket and it started the week with a rise of nearly one per cent.
The S&P/NZX 50 Index was up 108.44 points or 0.86 per cent to a day's high of 12,702.97. There were 89 gainers and 50 decliners across the whole market, on volume of 34.46 million share transactions worth $106.96 million.
Global transport and logistics operator Mainfreight claimed another new record, climbing $2.88 or 3.51 per cent to $84.88, after reaching $83 last week. Market leader Fisher and Paykel Healthcare joined the party, rising 85c or 2.69 per cent to $32.40.
But all eyes were on the action in Australia. Digital payments company Square, owned by Twitter founder Jack Dorsey, is making a A$39 billion ($41b) takeover offer of buy-now pay-later firm Afterpay. The offer values Afterpay $12b more than its market capitalisation, at the end of last week.
Afterpay increased nearly 20 per cent to A$116 on the news of the bid, and the S&P/ASX 200 Index reached a record high, up 1.23 per cent to 7483.50 points at 6pm New Zealand time.
Also in Australia, Oil Search directors are recommending shareholders accept the increased $9.4b takeover by oil and gas producer Santos.
Greg Smith, head of research with Fat Prophet, said the merger and acquisition activity, as well as the United States infrastructure spending, helped sentiment on the local market.
"The amount involved in the Square takeover bid is pretty amazing considering Afterpay is only six years old. We've seen a few (proposed) deals lately – Sydney Airport and now Afterpay," he said.
"There's plenty of liquidity sloshing around in the markets and I wouldn't be surprised if some of that money finds its way over to New Zealand at some time," he said.
Interest rate-sensitive stocks had a solid day – even though the Reserve Bank may soon lift the official cash rate. Chorus rose 5.5c to $6.215; Spark was up 4c to $4.775; Contact Energy gained 19c or 2.33 per cent to $8.35; and Mercury increased 17c or 2.57 per cent to $6.78.
Genesis Energy fell 5.5c to $3.375 after telling the market it lost an arbitration hearing and needs to make a carbon liability payment of $53m for a gas supply agreement with Beach Energy. The carbon liability covers the period from 2018 to June this year. Genesis has updated its full-year operating earnings (Ebitdaf) to $358m. The company said the payment should not affect the full-year final dividend.
Tilt Renewables and Genesis have struck a 20-year electricity agreement that will provide the foundation for building the 75MW Kaiwaikawe Windfarm near Dargaville.
Other gainers were a2 Milk, up 17c or 2.09 per cent to $6.35; Ebos Group increasing 29c to $31.31; Scott Technology rising 13c or 4.73 per cent to $2.88; TIL Logistics gaining 16c or 10.39 per cent to $1.70; and Cavalier – rebutting a legal threat from competitor Godfrey Hirst – collecting 6c or 12 per cent to 56c.
Dual-listed banks ANZ Banking Group increased 41c to $29.75, and Westpac Banking Corporation rose 47c or 1.81 per cent to $26.45.
Summerset Group Holdings gained 40c or 3.10 per cent to $13.30, but fellow retirement village operator Ryman Healthcare was down 9c to $13.09.
Restaurant Brands fell 31c or 1.94 per cent to $15.69; Auckland International Airport was down 10c to $7.14; Scales Corporation shed 11 or 2.41 per cent to $4.45; Port of Tauranga declined 6c 1 to $7.08; NZX decreased 6c or 3.13 per cent to $1.86; Vista Group was down 7c or 3 per cent to $2.26; and Harmoney lost 7c or 3.23 per cent to $2.10.
Technology investor Enprise Group continued its fall from grace, down 64c or 25.6 per cent to $1.86 on slim trading of 66 transactions worth $4015. It was at $4 on July 23.
CDL Investments, down 1c to $1.19, and parent company Millennium & Copthorne Hotels New Zealand, up 3c to $2.36, reported positive results for the six months ending June.
CDL's operating profit rose 51 per cent to $20.75m on revenue of $61.27m, up 49.6 per cent. Millennium's profit of $25.34m was down 25.66 per cent, and revenue was $98.36m, up 16 per cent. Millennium recorded average hotel occupancy of 40.5 per cent.
Cannasouth has now taken full control of manufacturing facility Midwest Pharmaceutics NZ after buying the outstanding 40 per cent shareholding, and its share price increased 0.005c to 42c. Fellow medicinal cannabis firm Rua Bioscience was down 2c or 4.71 per cent to 40.5c.
Evolve Education's chief operating officer Craig Presland has resigned with immediate effect. Evolve's share price rose 4c or 5.41 per cent to 78c.