New Zealand shares rose as Auckland International Airport resumed trading after successfully raising $1 billion in a discounted placement to shore up its balance sheet.
The S&P/NZX 50 Index increased 46.03 points, or 0.5 per cent, to 9,809.85. Within the index, 41 stocks rose, seven fell, and two were unchanged. Turnover was $239.4 million.
Investors cleared out their portfolios yesterday to take part in the Auckland Airport placement, with the shares sold at $4.66 apiece to institutions in the bookbuild process. The airport operator's share sale was underwritten at a floor price of $4.50, a discount to the $5.04 price they closed at last week. The shares rose 6.9 per cent to $5.385 when they resumed trading today.
Sam Trethewey, a portfolio manager at Milford Asset Management, said the local market had disconnected from offshore events and was driven by the recent spate of capital raising.
"The big one has been the Auckland Airport deal that saw the market down 1.7 per cent yesterday and today we are seeing some recovery in some of the names that were sold as funding for the deal," Trethewey said.
He said investors were happy the deal provided the airport with a strong balance sheet to keep the bank happy.
Outdoor clothing and equipment retailer Kathmandu Holdings, which has also raised funds to shore up its balance sheet, fell 1.4 per cent to 69 cents.
Tourism and travel stocks have been among the hardest hit by the Covid-19 pandemic, and equity markets around the world were buoyed by signs that new infections may have peaked in hotspots such as Italy, Spain and New York.
Trethewey said investors were still grappling with what the medium-term earnings outlook would be for tourism companies, and that was causing big daily movements in share prices.
"Investor conviction around what that earnings outlook is incredibly mixed and driving some large swings," he said.
Tourism Holdings rose 9.4 per cent to $1.05 and SkyCity Entertainment Group was up 5.2 per cent to $1.81.
Air New Zealand increased 1.2 per cent to 85 cents. The airline is looking to make 387 pilots redundant as part of massive cost-cutting measures after it slashed capacity to around 5 per cent due to the Covid-19 outbreak.
Blue-chip stocks were generally stronger. A2 Milk increased 1.2 per cent to $17.59, Spark New Zealand rose 0.5 per cent to $4.30, Mercury NZ advanced 0.3 per cent to $4.05 and Ryman Heathcare rose 0.8 per cent to $10.75.
Heartland Group led the market higher, rising 10.8 per cent to $1.03.
Fast-food operator Restaurant Brands New Zealand rose 6.1 per cent to $9.85 as investors contemplated which stocks stood to benefit if the level-4 lockdown is lifted in a couple of weeks, Trethewey said.
Stock market operator NZX rose 7.4 per cent to $1.16.
Infratil, whose portfolio includes Trustpower, Tilt Renewables, Vodafone and Wellington Airport, fell 1.1 per cent to $4.01 as investors looked towards a promised update from the business tomorrow.
"The market is interested to see how that business is tracking. Infratil itself has a high degree of debt, but most of that is exposed to stable demand like Trustpower and Vodafone," Trethewey said.
Trustpower rose 6.7 per cent to $6.40.
Fisher & Paykel Healthcare posted the day's biggest decline, down 6.1 per cent at $27.61.
Outside the benchmark index, Moa Group climbed 19.2 per cent to 16.8 cents after it said it would raise up to $5.5m and bring in a new investor.