Announcing the interim result in August, NZX chief executive Tim Bennett said he expected an up-tick in capital raisings. Photo / Brett Phibbs
Announcing the interim result in August, NZX chief executive Tim Bennett said he expected an up-tick in capital raisings. Photo / Brett Phibbs
Share price struggle for operator.
NZX may face the uncomfortable prospect of dropping out of its own benchmark index if its terrible share price performance doesn't improve.
As of yesterday, the company's market capitalisation, at roughly $251 million, was the second-lowest on the S&P/NZX 50, just ahead of Steel & Tube ($249 million).
The next quarterly rebalancing of the index will be carried out after market close on December 18.
Valuation, however, is not the only measure S&P assesses to decide who's in and who's out - liquidity feeds into the calculations as well.
S&P/NZX 50 eligibility is based on free float market capitalisation, which also evaluates the number of shares freely available for trading outside stakes such as management and strategic shareholdings.
The exchange operator is ranked 45th out of the 50 firms in the index on that basis, giving it a bit of breathing room, for now.
Why so bad?
NZX's languishing share price can be a little hard to comprehend.
You would think the stock would be riding high given strong levels of market activity, including a flurry of initial public offerings in 2013 and 2014. But NZX shares have missed the party that has taken place on its own exchange in recent years.
While the S&P/NZX 50 has gained 46 per cent since the start of 2013, NZX shares have fallen more than 21 per cent. The stock has shed 19 per cent this year, compared with a 6.4 per cent gain for the index.
NZX has been grappling with rising costs, which have taken some of the shine of its financial results, while its NZX Agri publications business has been impacted by adverse market conditions in the rural sector.
Excluding the sale proceeds of its 50 per cent share in Link Market Services, NZX's half-year profit slipped 12 per cent to $6.2 million.
A spokeswoman for the exchange said the firm's share price performance was disappointing given it had been making progress executing its "core strategies".
Pushpay has developed a smartphone app for gathering donations. Photo / Natalie Slade
These include being selected as the preferred tenderer to continue performing electricity market operator roles for the Electricity Authority and growing NZX's funds management business through the acquisition of SuperLife, which has been used to launch exchange traded funds (ETFs).
The spokeswoman also points out that total equity market capitalisation exceeded $100 million for the first time this year and trading volumes were continuing to grow.
Announcing the interim result in August, NZX chief executive Tim Bennett said he expected an up-tick in capital raisings, both primary and secondary, in the second-half of the financial year. NZX shares closed at 95c last night.
Rally divides opinion
Fast-growing mobile payments firm Pushpay is dividing market opinion as its share price rallies ever higher.
The software stock soared to an intraday record of $8.40 on Wednesday last week, giving the company a market capitalisation of $485 million, after it released strong growth numbers.
Pushpay said total annualised committed monthly revenue rose to $18 million in the six months to September 30 compared with $9.2 million in the six months to March 31. Total merchants using its technology more than doubled to 2102 from 996 six months earlier.
Pushpay, founded by Chris Heaslip and Eliot Crowther in 2011, has developed a smartphone app targeted largely at US churches for gathering donations.
The company listed at $1 a share in August 2014, meaning that at last week's record high the stock had gained 740 per cent.
But like fellow NZX-listed software developer Xero, Pushpay's valuation is becoming a divisive subject among investors.
North Shore-based fund manager Pie Funds is bullish on the stock, having taken a stake in the company through participating in the $18.7 million capital raising the company announced on September 30.
"There's over 300,000 churches with more than 500 people in the US," Pie Funds founder Mike Taylor said at that time.
"They are the only serious contender, at the moment, in that market."
Despite its growth, you have to question whether a four-year-old company that reported a $7.5 million loss for its last financial year is worth almost half a billion dollars.
"There is always a stock, every few years, that comes along that doesn't quite feel right but the market pushes hard," another fund manager said of Pushpay last week.
Shares closed at $7.87 last night.
TSB ups Fisher stake
TSB Bank has almost doubled its stake in Auckland-based investment manager Fisher Funds.
The bank's stake has lifted to 49 per cent, from 26 per cent previously, after it snapped up shares from a number of fellow investors in the fund manager, according to reports.
TSB first bought into Fisher in 2013, paying $33 million for its initial stake.
