Spark up 3% amid buyout speculation - Market close

According to The Australian’s Dataroom market gossip column, at least two private equity firms are “going over” Spark as they “ponder a buyout proposal”. Photo / NZME

Earnings season continued to produce mixed results on Tuesday as the New Zealand benchmark closed up after spending most of the day in the red.

The S&P/NZX 50 dropped 0.12% to 12,644.23 points with more than 32 million shares changing hands, amounting to $118.7m in value traded.

Greg Smith, head of retail at Devon Funds, said it was still early days, but investors punishing negative guidance is emerging as a theme this earnings season.

“Given the current macroeconomic environment both in New Zealand and overseas, investors are highly sensitive to negative changes in outlooks,” Smith said.

“Globally, there is still a lot of uncertainty around where the trade situation is going, even though we’ve sort of seen baby steps towards a trade agreement.”

NZX

Tower shares rose 2.08% to $1.47 after the insurer declared that net profit from continuing operations and revenue were up 53% and 8%, respectively.

“They’ve had better than expected claims experience and pretty low catastrophe experience, so they’ve got quite a big buffer for this year,” Smith said.

In its full-year result, travel software firm Serko disclosed a $5.1m impairment against its online booking platform acquisition, GetThere, due to current uncertainties in the United States.

The shares slid 7.84% to $2.94 as the firm reported a net loss of $22m due to one-off costs and the impairment, compared to a consensus forecast of $13m.

Spark shares rose 2.97% to $2.25 on relatively high volumes after media speculation about a potential buyout.

According to The Australian’s Dataroom market gossip column, at least two private equity firms are “going over” Spark as they “ponder a buyout proposal”.

A Spark spokesperson told the Herald it does not comment on rumour or speculation.

Several stocks moved around ahead of upcoming disclosures and events in the coming days.

Infratil continued its rebound, adding 1.65% to close the day at $11.69. The infrastructure investor will announce its full-year financial results for the period ending March 31 on Wednesday next week.

Ryman, which is also reporting next week, closed the day up 1.67% on $2.44. The stock is now 23 cents clear of the 10-year low it reached towards the end of April.

Another firm reporting next week, Fisher & Paykel Healthcare, dropped 1.64% to $35.31. After a good start to the month, NZ’s largest listed company is down 2.6% since May 14.

Restaurant Brands recovered earlier losses in afternoon trading. Still, it finished the day in the red, sliding 3.90% to $3.20 ahead of the fast-food restaurant operator’s annual general meeting on Friday.

Across the NZX main board, stocks that rose outnumbered those that declined 41 to 40.

Overseas

In global markets, Chinese battery maker CATL had its trading debut on the Hong Kong Exchange. The company is already listed on the Shenzhen Stock Exchange.

By 5pm, shares had risen 12.6% as retail investors followed up with strong demand for the biggest listing of the year to date globally.

Across the Ditch, the Reserve Bank of Australia (RBA) cut interest rates by 25 basis points.

Before the RBA announcement, Smith said the “smart money” was on the cut and that holding rates would have surprised markets.

An hour before market close, the ASX 200 was up 0.61%.