Investors lined up to take part in Auckland Airport's share placement this week. Photo / File
Investors lined up to take part in Auckland Airport's share placement this week. Photo / File
Auckland International Airport's successful $1 billion placement showed that despite the high level of uncertainty surrounding the Covid-19 pandemic, there is no shortage of demand for stock.
Plummeting turnover and the severe body blow dealt to all airlines everywhere - including Air New Zealand - arising from the outbreak didnot dissuade investors from here and around the world flocking to take up shares.
Furthermore, the airport has shown resilience in its share price, post the placement, although it was weakening off quite sharply in anticipation of a capital raising announcement.
By the close yesterday, AIA was at $5.75, a hefty premium to its theoretically adjusted price post placement price of $4.98.
Harbour Asset Management portfolio manager Shane Solly, noting the sharemarket hit a record high in January, said a lot of cash had been "sitting on the sidelines" waiting for a time when prices had come back to earth.
Across the Tasman, other big capital rai sings are showing similar support, despite these difficult and uncertain times.
Shares in Flight Centre - one of the hardest hit by impact of pandemic-driven travel bans - rallied after its succcesful A$562m capital raising - at A$7.20 a share. Flight Centre shares went on to trade at on the ASX at A$10.28.
The same goes for another industry in the gun - oil.
Australia's Oil Search, which has extensive oil pricing and liquefied natural gas assets in Papua New Guinea, sought A$1.08 billion through a placement, which was also well supported.
Analysts are drawing comparisons between now and the Global Financial Crisis, when a slew of companies came to the market to shore up their balance sheets.
"We know from experience from the GFC that, generally, supporting capital raises is a good way to generate returns," Solly said.
"We saw that with Auckland Airport this week, where there was a massive wave of capital.
"What it is telling you is that there has been a lot of people waiting for a pullback in markets.
"A lot were sitting on cash and little bit underweight (in stocks) compared to where they wanted to be," he said.
Market expectations are for at least a dozen more large capital raisings further along the way, with travel and leisure featuring strongly.
Continuous Disclosure understands that Sky City is at the top of the list.
Tourism Holdings and Air New Zealand, despite its recent $900m Government loan, are also understood to be capital raising candidates.
FPH falls on delayed result
Fisher and Paykel Healthcare has taken advantage of the NZX's offer to extend the financial reporting deadline buy a month to allow companies to adjust to disruption arising from the Covid-19 pandemic.
Inside the Fisher & Paykel Healthcare factory in East Tamaki, Auckland. Photo / Dean Purcell
The respiratory products maker said its annual results for the year ended March 31 year would now be released on June 29, not May 28 as previously advised.
East Tamaki-based F&P Healthcare has been under the pump making products used in the treatment of Covid-19.
"At the present time, we have nearly 5,000 people around the world who are focused on meeting the increased demand for our respiratory products, which are being used in the treatment of patients with Covid-19," chief financial officer Lyndal York said.
"This time of year our financial controllers in our global offices would usually be dedicated to completing year end reporting.
"Because of the COVID-19 pandemic, many of these people are currently working remotely – assisting with customer enquiries, getting product into the hands of customers and providing operational support," she said.
"One of our core beliefs is doing what is best for the patient, and it should come as no surprise that we think that these activities should take priority," she said.
The stock hit $31.93 at the end of March but closed yesterday at $27.00.
Analysts said the decline reflected disappointment that the much anticipated result had been delayed.
There was also some concern that the company may have hit capacity constraints, thanks to Covid-19.
