Market commentaries
AUCKLAND: New Zealand shares dropped, led by Comvita as its possible takeover failed. a2 Milk continued last week’s losses and Kiwi Property Group dropped on its earnings.
The S&P/NZX50 Index fell 41.61 points, or 0.5%, to 8,615.72. Within the index, 24 stocks fell, 17 rose and 9 were unchanged. Turnover was $103 million.
Comvita led the index lower, dropping 8% to $6.23. The honey products exporter has pulled out of talks with an unnamed third party looking to take it over when it couldn’t reach a deal on price.
Comvita said that in negotiations ‘‘we could not bridge the considerable distance between us on price and therefore, Comvita directors unanimously agreed to withdraw from the process.’’
As a result, ‘‘discussions between Comvita and that third party have now concluded with no agreement on a transaction. The due diligence process and further consideration of any proposal to acquire Comvita is now at an end.’’
a2 Milk Co fell 2.3% to $11.04. Last week, the milk marketer’s shares slumped 13% after it missed expectations, prompting some analysts to reassess what have been optimistic assumptions for the company’s outlook.
‘‘There’s a bit of analysis into the outlook which is being digested, there still could be people taking a profit after a stellar run,’’ Greg Easton, investment adviser at Craigs Investment Partners, said. ‘‘The volume on a2 today is nothing like we saw on the day of the announcement. That was incredible.’’
Kiwi Property Group dropped 2.2% to $1.36. The real estate investor lifted annual earnings 8.2% as its rental income was boosted by the completion of several developments and new acquisitions, although smaller revaluation gains led to a fall in bottomline profit.
‘‘If you read through a bit, it seems retail is a different story around the country — the main centres like Sylvia Park appear to be doing well, but the more regional ones like North City in Porirua not so good. They’re pretty predictable, property stocks, so that result was in line,’’ Mr Easton said.
Kathmandu Holdings declined 2.6% to $2.58, Synlait Milk dropped 1.8% to $10.30, and Spark New Zealand fell 1.7% to $3.48. Pushpay Holdings was the best performer, up 2% to $4.07. Goodman Property Trust rose 1.4% to $1.43. On Friday, the real estate investor’s joint venture with Singapore sovereign wealth fund GIC sold seven Auckland CBD buildings to US private equity firm Blackstone for $635 million, meaning the NZXlisted property trust will reap $323.9 million.
Tourism Holdings gained 1.7% to $6.50, New Zealand Refining Company advanced 1.3% to $2.42, and Heartland Bank was up 1.1% to $1.80.
Outside the benchmark index, Veritas Investment shares doubled to 10 cents. Japanese investment bank Nomura Holdings will lend Veritas $27.5 million to repay bank debt and fund expansion in the hospitality sector, if Veritas’ shareholders agree.
The food and beverage investor has been operating under the close watch of ANZ Bank New Zealand, which has effectively overseen a winddown of the business to claw back as much as possible of the $22.5 million it is owed, and has extended the tranches of the company’s bank debt four times since October 2017.
The Australian sharemarket closed steady with strong gains by the healthcare and utilities sectors countering yet another fall by Telstra and weakness among the banks and miners.
The benchmark S&P/ASX200 index closed down 2.9 points, or 0.05%, at 6084.5 points yesterday, while the broader All Ordinaries was down 0.7 points, or 0.01%, at 6190.2 points.
National turnover was 2.7 billion securities traded worth $5.2 billion. Macquarie Private Wealth division director Lucinda Chan said a heavy fall by the telecommunications sector led by Telstra and falls for banks and miners had offset gains in healthcare and utilities stocks.
‘‘The health sector has really jumped with CSL and Cochlear both rallying for no particular reason given there was no company specific reports or news for that sector,’’ Ms Chan said.
‘‘Locally and internationally there was not a lot of news to give the market any real direction either way.’’ — BusinessDesk/AAP