All eyes locked on index rebalancing
Highlight of week should be large changes on Friday
New Zealand shares were mixed in light trading as investors weighed up the impact of index rebalancing at the end of this week. Growth stocks Pushpay Holdings and A2 Milk gained, while Sky Network Television fell.
The S&P/NZX 50 index edged up 0.77 of a point, or 0.01 per cent, to 9,271.53. Within the index, 20 stocks gained, 23 fell and seven were unchanged. Turnover was $89.4 million.
Several Australian stock indices tracked by passive investment funds will rebalance at the end of the week. The new line-ups will take effect from next month, including Sky TV’s exit from the S&P/ASX 300 index. Sky TV fell 2.8 per cent to $2.06, just shy of the $2.05 low it hit on September 6.
David Price, a broker at Forsyth Barr, said trading had been very quiet for days and the index rebalancing would attract most focus this week.
“There’ll be quite a bit going on this Friday with some large index changes. That’ll be the highlight of the week.”
Pushpay rose 2.7 per cent to $4.15, extending last week’s gain on a broker upgrade. A2 rose 2.5 per cent to $12.29 after a Forsyth Barr research note said new Chinese e-commerce rules should play to the milk marketer’s strengths. Synlait Milk fell 1.6 per cent to $12.95, ahead of its annual result on Thursday. Chorus gained 2.1 per cent to $4.89 and Ebos Group rose 2.1 per cent to $22.44.
Retirement stocks largely fell. Price said the decline was too small to attribute to the recently announced Australian Royal Commission into aged care, which saw the likes of ASX-listed Estia Health sink 17 per cent. Summerset Group fell 2.6 per cent to $7.60, Metlifecare dropped 1.9 per
cent to $6.26 and Ryman Healthcare dipped 1.1 per cent to $13.55.
Property For Industry slipped 2.5 per cent to $1.755 after opening a seven-year bond offer. The real estate investor wants to raise $100m to repay bank debt and diversify its funding at a lower cost. Infratil declined 1.1 per cent to $3.47 and Mercury NZ was unchanged at $3.28. Tilt Renewable’s independent adviser valued the wind and solar generation business at a premium to the duo’s $2.30 a share offer. Tilt rose 4.8 per cent to $2.41.
Kathmandu was unchanged at $3.18 ahead of its annual result this morning. The retailer has said net profit should rise to between $48m and $52m from $38m in 2017.