The New Zealand sharemarket slipped to a six-week low.
The New Zealand sharemarket slipped to a six-week low as investors sold blue-chip stocks Fisher and Paykel Healthcare and Ebos to help fund Fletcher Building’s big capital raise.
The S&P/NZX 50 began falling at lunchtime and closed at 12,303.99, down 100.18 points or 0.81% after reaching an intraday high of 12,424.8. The index was at 12,319.06 points on August 13.
Trading was heavy with volumes of 65.1m million share transactions worth $212.66 million.
Fletcher Building surged 25.3c or 9.18% to $3.01 after completing its $593m capital raising from institutional investors. Institutional shareholders took up 91% of the entitlement offer of one new share for every 4.49 shares held.
Fletcher now turns to its retail offer, discounted at $2.40 for a new share, as it aims to raise a total of $700m to reduce debt and strengthen its balance sheet.
Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said there was a good turnout for the Fletcher raising “to clear its decks and shore up the balance sheet. A new chief executive always wants to start with a clean slate.”
He said Ebos and Fisher and Paykel Healthcare led the market down as investors freed up cash, for the capital raising, from strong-performing stocks.
“Fisher and Paykel has risen 51% year to date and investors were sitting on a tidy annualised profit. There’s the opportunity to sell high and buy low.”
Fisher and Paykel Healthcare declined $1.09 or 2.99% to $35.41, and Ebos Group was down $1.45 or 3.91% to $35.60.
In the United States, the Dow Jones Industrial Average and S&P 500 hit new highs after rising 0.15% to 42,124.65 and 0.28% to 5718.57 points respectively. The Nasdaq Composite was up 0.14% to 17,974.27.
There is now talk of another jumbo 0.5% reduction in interest rates after US manufacturing activity hit its lowest level in 15 months during September.
The Purchasing Managers Index was 47.0 (representing the percentage of managers indicating expansion), down from 47.9 in August and below estimates of 48-4 – the lowest reading since June last year.
Gold hit a record high of US$2630 an ounce on escalating tensions in the Middle East following Israeli attacks on Lebanon.
Across the Tasman, the Reserve Bank kept its cash rate at 4.35% because of persistent inflation and ongoing strength in the labour market. The bank doesn’t expect inflation to return to the target range of 2-3% until late next year and the midpoint till 2026.
At home, Summerset shed 15c to $11.25; SkyCity declined 4c or 2.84% to $1.37; Vista fell 24c or 8.33% to $2.64; Hallenstein Glasson was down 21c or 3.35% to $6.05; and Genesis Energy eased 4.5c or 2.13% to $2.065.
Leading banks Westpac and ANZ fell $1.11 or 3% to $35.88 and 62c or 1.79% to $34 respectively.
Pacific Edge’s momentum slowed, falling 2.3c or 13.37% to 14.9c; Blackpearl Group was down 6c or 4.44% to $1.29; Goodman Property Trust eased 4.5c or 2.13% to $2.065; Heartland decreased 4c or 3.88% to 99c; and Delegat Group was down 12c or 2.04% to $5.76.
Gentrack and Ventia Services both hit new highs after rising 61c or 5.55% to $11.61 and 13c or 2.54% to $5.25 respectively.
Sky TV gained 8c or 3.14% to $2.63; a2 Milk increased 17c or 2.99% to $5.85; 2 Cheap Cars was up 3c or 4.17% to 75c; Being AI added 2c or 3.17% to 65c; PGG Wrightson improved 8c or 4.21% to $1.98; and Green Cross Health collected 3c or 3.9% to 80c.
Vector was down 4c to $3.75. Board member Bruce Hassall has withdrawn his nomination for re-election following recent feedback from some Vector shareholders given his previous role as chair of Fletcher Building.
NZ King Salmon Investments was down 1c or 4.08% to 23.5c after reporting a 11% increase in revenue to $101.72m and a 43% fall in net profit to $6m for the six months ending July.
Operating earnings (ebitda) increased from $10.7m to $13.5m and NZ King has revised its full-year ebitda guidance to $26m-$30m instead of $26m-$32m. Sales volume was up 5% to 3023 metric tonnes, and mortality cost increased from $7.8m to $8.5m. Full-year harvest is expected to be 6800MT.
Probiotics manufacturer Blis Technologies lost nearly half its value, falling 0.008c or 38.1% to 1.3c after updating the market on its patent issue. Blis said a European customer has made a patent application for the United States, Europe and China using trade secrets and confidential information provided by Blis.
Blis expects the customer to terminate its arrangement resulting in a short-term reduction in revenue because of less sales. Blis has withdrawn its earnings guidance of double-digit revenue growth.