Market close: NZ stocks rebound

Photo / NZME

The New Zealand sharemarket finally had a Christmas rebound as leading stocks regained ground and Vector offloaded half of its metering business for nearly $2 billion.

After a better night on Wall Street, the S&P/NZX 50 Index rose strongly at the opening and traded steadily to close at 11,452.05, up 47.21 points or 0.41 per cent. The index reached an intraday high of 11,471.41 points.

There were 82 gainers and 49 decliners over the whole market with low volume of 43.56 million share transactions worth $96.94 million.

The latest ANZ-Roy Morgan survey showed consumer confidence fell 7 points to 73.8 in December, its lowest level since the index began in 2004.

Shane Solly, portfolio manager with Harbour Asset Management, said weak credit spending, softer dairy prices overnight and lower consumer confidence reinforces that the economy is slowing – just what the Reserve Bank wanted.

“People are now holding their breath over corporate earnings and whether this will lead to a round of downgrades,” Solly said. “Still some executives have been increasing their holdings – such as in Mainfreight and Pacific Edge – and people do respond when management are active in stocks.”

Across the Tasman, the S&P/ASX 200 Index was having an even bigger rebound, rising 1.22 per cent to 7109.8 points at 6pm NZ time.

At home, Vector increased 4c to $4.25 after its long-awaited announcement that it is selling half of its metering business to Brisbane-based investment manager QIC Private Capital for $1.74b. The sale is expected to be finalised in the second quarter of next year.

Vector has installed 2.3 million electricity and gas meters across New Zealand and Australia and the deal implies an enterprise value of $2.5b for Vector Metering against a book value of $650m.

Solly said some people were speculating that a transaction wouldn’t happen and the pricing was not quite as high as was expected – “but it’s still a pretty full number.”

Among other leading stocks, Ebos Group increased 53c to $43.53; Chorus was up 18c or 2.21 per cent to $8.33; a2 Milk rose 22c or 3.2 per cent to $7.10; Synlait gained 8c or 2.29 per cent to $3.57; Fisher and Paykel; Healthcare added 11c to $21.81; and Spark was up 6c to $5.32.

Solly said some new data showed Fisher and Paykel’s sales of respiratory equipment was down slightly in November but they came off a high base. And a2 Milk was building up inventory to fill the pipeline in advance of the Chinese regulatory review.

South African investment manager Allan Gray Group has increased its shareholdings in Fletcher Building from 7.34 per cent to 8.81 per cent, and in Sky City Entertainment from 6.22 per cent to 7.53 per cent. Fletcher was up 12c or 2.56 per cent to $4.80, and SkyCity was down 1c to $2.42.

Air New Zealand, up 0.005c to 78c, showed its business keeps increasing, flying a total of 1.248 million passengers in November compared with 1.377 million in pre-Covid November 2019.

In the energy sector, Contact declined 8c to $7.72, and Mercury decreased 6.5c to $5.45. Utilities investor Infratil was down 12.5c to $8.50.

The retirement village sector was in a recovery mood. Ryman Healthcare was up 7c to $5.70; Summerset Group gained 8c to $9.10; and Arvida rose 7c or 6.42 per cent to $1.16.

AFT Pharmaceuticals was up 12c or 3.4 per cent to $3.65; Ventia Services increased 5c or 1.92 per cent to $2.65; Serko added 9c or 3.91 per cent to $2.39; and Millennium & Copthorne Hotels NZ gained 6c or 3.28 per cent to $1.89.

Retailers Briscoe Group was down 11c or 2.34 per cent to $4.60; The Warehouse Group declined 5c or 1.79 per cent to $2.75; and Michael Hill was up 2c to $1.17.

Stainless steel innovator MHM Automation rose 7c or 8.43 per cent to 90c after announcing it is buying Christchurch-based Wyma Engineering (NZ), a global manufacturer of post-harvest vegetable and fruit handling equipment, for $60m.

MHM will make a cash payment of $28m and issue 22.67 million new shares or 25.46 per cent to Wyma owners Andrew and Angela Barclay. There is also an earn-out payment of $15m over three years.

Amongst other decliners, Delegat Group was down 10c to $9.90, Restaurant Brands decreased 15c or 2.5 per cent to $5.86; Tourism Holdings lost 6c to $3.55; and Third Age Health shed 5c or 2.79 per cent to $1.74. Rakon was down 3c or 2.86 per cent to $1.02; and Move Logistics slipped 2c or 1.83 per cent to $1.07.

Good Spirits Hospitality, up 0.002c or 5 per cent to 4.2c, is selling its nine bars and restaurants in Auckland to repay debt following a review by investment banker Tonnant Partners. DB Newmarket is excluded from the process as it has already closed.

Good Spirits said all nine venues were trading profitably and expects them to produce full-year operating revenue of $25.5m for the sale.

New Talisman Gold Mines is planning a capital raise next month, though it didn’t say how much. The money will be used to reopen Talisman Mine in Karangahake Gorge and the company has engaged Terra Firma to prepare operational plans for submission to Worksafe. New Talisman’s share price was unchanged at 0.003c.