Shares slip as experts chew on Infratil bid
F&P slide continues while other stocks take a breather
After a heady week so far, the New Zealand sharemarket took a breather as analysts and investors contemplated the impact of AustralianSuper’s $5.4 billion takeover offer for utilities investor, Infratil.
The S&P/NZX 50 Index finished slightly down at 12,860.37, a fall of 29.03 points or 0.23 per cent, after rising 2 per cent this week. Trading was moderate with 42.48 million shares worth $159.75 million changing hands, and there were 81 gainers and 65 decliners over the whole market.
Nigel Scott, an investment adviser with Craigs Investment Partners, said the market was consolidating from its recent highs and taking on board the super fund’s bid for Infratil.
He said the local market was full of infrastructure stocks and valuations have just gone up as a result of the super fund’s move.
“The first bid is never the last and it could bring out other suitors looking for cash flow.”
Scott said with the recent highs, people are contemplating how to stay invested.
People would normally take some money off the table but at this point in time there’s nowhere else to put it — though there’s been some quick and successful bond issues lately.
“Interest rates have gone even lower and that continues to be a factor underpinning the market, and people are trying to find the next investment story and considering what corporate balance sheets will look like in six to 18 months time,” he said.
Ryman Healthcare announced it filled its $150m six-year, fixed rate bond issue with a 50 per cent oversubscription and the bonds, with an interest rate of 2.55 per cent a year, will be issued on December 18. Ryman’s share price climbed 19.8c to $14.90.
Among fellow retirement village operators, Oceania Healthcare gained 4c or 3.13 per cent to $1.32 and
Summerset Group Holdings fell 9c to $10.76.
All was quiet in the Infratil camp following AustralianSuper’s surprise takeover bid. Infratil lost 7c to $7.18 after a 19 per cent jump the day before. Tilt Renewables, 65.5 per cent owned by Infratil and a lightlytraded stock, fell 48c or 8.57 per cent to $5.12.
Trustpower, half owned by Infratil and not wanted by AustralianSuper, increased 20c to $8.05 — a gain of 62c over two days.
Market leader Fisher & Paykel continued to slide, falling 30c to $31.79, and a2 Milk was up 15c to $14.
Port of Tauranga had a good recovery, rising 16c or 2.21 per cent to $7.40, and Ebos Group increased 30c to $25.50.
Transport software firm Eroad rose 19c or 4.03 per cent to $4.90, and retail jeweller Michael Hill International was up 6c or 10.53 per cent to 63c.
Chorus was down 18c or 2.23 per cent to $7.88; Meridian Energy fell 17c to $6.89; Briscoe Group declined 11c or 2.35 per cent to $4.58; and property stocks Goodman Trust and
Property for Industry lost 3c to $2.365 and 4c to $2.87 respectively.
Rural services company PGG Wrightson was down 13c or 4 per cent to $3.12 after a recent surge, and
Napier Port fell 7c or 1.97 per cent to $3.48.
Two stocks, Radius Residential Care and Auckland Real Estate Trust, listed on the NZX without raising any capital from the public — but may do so in the future. They are both tightly-held stocks with little liquidity and there was no trading on their debut — Radius at 80c and Auckland Real Estate 79c.
Radius, founded in 2003, operates 22 aged care facilities in New Zealand, comprising more than 1700 care beds. Nineteen of the facilities are leased and Radius also owns and operates two retirement villages comprising 76 units.
Auckland Real Estate, which is also listed on the Australian ASX, manages an investment portfolio of six properties, five in downtown Auckland including West Plaza and one in Chicago which will be sold.
Shares in transtasman dental firm
Abano Healthcare will stop trading on December 14 following the High Court’s approval for the takeover by Australian investment firm BGH Capital and Ontario Teachers’ Pension Plan. Abano will delist from the NZX on December 22. When this happens there will be 184 companies listed on the New Zealand exchange.
Interest rates have gone even lower and that continues to be a factor underpinning the market
Nigel Scott, investment adviser, Craigs Investment Partners