Market close: Good Spirits Hospitality finds buyer for bars and restaurants

Good Spirits Hospitality was unchanged at 2.4c after finding a buyer for its nine bars and restaurants, which includes Danny Doolans in Auckland. Good Spirits will delist from the NZX exchange following the sale. Photo / NZME

The New Zealand sharemarket shrugged off weakness in overseas bourses as the United States’ credit rating was downgraded because of “a steady deterioration in standards of governance”.

After a mixed day on Wall Street, the S&P/NZX 50 Index fell sharply in the morning to a low of 11,924.15 but then recovered to finish flat at 11,962.04, down 18.36 points or 0.15 per cent.

There were 52 gainers and 76 decliners on the main board, with 30.43 million shares worth $107.06 million changing hands.

Rating agency Fitch put the cat among the pigeons by downgrading US debt from AAA to AA+, citing fiscal deterioration over the next three years and repeated down-to-the-wire debt ceiling negotiations that threaten the American Government’s ability to pay its bills.

The move surprised investors. The Hong Kong Hang Seng index was down 2.17 per cent to 19,575.94 points at 6pm NZ time, and Japan’s Nikkei had fallen 2.23 per cent to 32,729.76. Across the Tasman, the S&P/ASX 200 Index was down 1.25 per cent to 7357.4 points.

Before the Fitch announcement, the Dow Jones Industrial Average had its 16th gain in 17 trading sessions, increasing 0.2 per cent to 35,630.68 points.

Matt Goodson, managing director of Salt Funds Management, said the local market continues to march on, oblivious to the macro-economic risks overseas.

“It’s pretty quiet, volumes slightly improved and the market is awaiting the earnings season [later this month],” he said.

Latest statistics showed unemployment increased to 3.6 per cent from 3.4 per cent in the second quarter, slightly higher than the forecast of 3.5 per cent. But employment growth rose 1 per cent, much stronger than the expected 0.6 per cent.

ANZ Research said in a release that while the labour market undoubtedly remains beyond maximum sustainable employment, there were unders and overs in the data, and the numbers are unlikely to move the dial for the Reserve Bank one way or the other.

“We remain sceptical of the Reserve Bank’s expectation that the unemployment rate will rise as steeply as it did during the global financial crisis over coming quarters,” ANZ said.

Ebos Group was down 56 cents to $37.24; Chorus declined 16c or 1.87 per cent to $8.415; a2 Milk decreased 9c to $5.42; Summerset Group also shed 9c to $10.11; Tourism Holdings gave up 8c or 2.3 per cent to $3.40; and Investore fell 6c or 4.08 per cent to $1.41.

Goodson said Investore, owner of bulk retail buildings, has had a good run lately but there was concern about the sustainability of its dividend return. Some supermarkets are up for sale and this could lead to new valuation benchmarks.

In the energy sector, Contact was up 6c to $8.36, and Manawa was down 5c to $4.75. Utilities investor Infratil gained 7c to $9.91.

Smartpay Holdings decreased 4c or 2.23 per cent to $1.75; Steel & Tube was down 3c or 2.42 per cent to $1.21; Bremworth declined 3c or 6.25 per cent to 45c; and Pacific Edge slipped a further 0.006c or 4.32 per cent to 13.3c.

Other decliners were Fletcher Building, down 5c to $5.52; Accordant Group fell 8c or 6.35 per cent to $1.18; and Enprise Group shed 4c or 6.25 per cent to 60c.

Fonterra Shareholders’ Fund gained 6c to $3.65, despite a big fall in dairy prices at the latest Global Dairy Trade auction (GDT). But value-added products such as cheese were largely unaffected and the fund benefits from increased profit margins.

The GDT index was down 4.3 per cent overall with whole milk powder falling 8 per cent to an average US$2864 ($4690) a tonne, a price not seen since June 2020.

Wine exporters Delegat Group were up 20c or 2.16 per cent to $9.45, and Foley Wines gained 3c or 2.46 per cent to $1.25.

Freightways was up 9c to $8.79; Winton Land rose 19c or 7.88 per cent to $2.60; Marsden Maritime Holdings gained 6c to $5; Rakon increased 5c or 6.67 per cent to 80c; and Metro Performance Glass added 0.007c or 3.89 per cent to 18.7c.

Good Spirits Hospitality, unchanged at 2.4c, is selling its nine bars and restaurants, including The Cav and Danny Doolans in Auckland and the Cock & Bull in Hamilton, to Brew on Quay for $20.7m. Following the sale, Good Spirits will delist from the NZX exchange.

Fellow hospitality group Savor was up 1c or 3.13 per cent to 33c.

Utility pole measurement provider ikeGPS increased 5c or 7.14 per cent to 75c after announcing it has bought Marne & Associates’ National Electric Safety Code training business for an undisclosed amount.

TruScreen, unchanged at 2.5c, told the market its artificial intelligence-driven technology for cervical cancer screening has been recognised in China’s medical guidelines.

The opto-electrical technology was included in the Chinese Society for Colposcopy and Cervical Pathology’s July edition of the Clinical Gynaecology and Obstetrics journal.