Shares dip as investors chase Investore

Focus shifts from stronger stocks to ones lagging behind

New Zealand shares fell as investors cashed in on Tuesday’s strong rally and sold property stocks to take advantage of Investore Property’s discounted $100 million capital raising.

The S&P/NZX 50 Index fell 93.37 points, or 0.9 per cent, to 10,666.19. Within the index, 23 stocks fell, 20 rose, and seven were unchanged. Turnover was $178.8 million.

Shane Solly, a portfolio manager at Harbour Assets, said investors were redirecting profit from stronger performing stocks into lagging ones.

“We have a very strong recovery in the New Zealand market, and a lot of stocks have been left behind. So it is logical that people are taking some profit and looking for opportunities,” he said.

One opportunity on investor’s minds was Investore Property’s

$100m capital raising announced to the NZX yesterday morning.

Other property stocks were sold off to free up cash in preparation for the placement, Solly said.

Investore is offering $85m worth of shares to eligible investors through a bookbuild process at a floor price of $1.59, a 10.2 per cent discount from its previous close at $1.77. The remain

ing $15m shares will be offered to existing shareholders at a further 2.5 per cent discount. Kiwi Property Group fell 3.5 per cent to 96.5 cents, Argosy Property slid 2.8 per cent to $1.06 and Good

man Property Trust decreased 1.5 per cent to $2.305. Property For Industry rose 0.5 per cent to $2.18 and Precinct Properties New Zea

land edged up 0.3 per cent to $1.59.

Fisher & Paykel Healthcare led the market lower, declining 4.3 per cent to $28.07. Solly said the respirator manufacturer had seen strong growth with a Covid-19 related increase in activity and investors were beginning to question if the same rate of growth would continue.

A2 Milk Co, which also saw

increased demand during the pandemic, fell 1.8 per cent to $19.97. It noted chair David Hearn reluctantly sold down his stake in A2 to meet a tax obligation in Britain. Restaurant Brands New Zealand

fell 2.4 per cent to $11.81, having risen 4 per cent yesterday when its stores reopened under alert level 3 restrictions. Burger Fuel Group also declined, falling 3.5 per cent to 55 cents.

“Some of these stocks that had a bit of a pop going into level 3 are just giving back some of their gains.”

Some of this profit is being redirected into stocks still waiting for their turn to “pop”. Yesterday travel stocks found favour after Australian Prime Minister Scott Morrison said restrictions would soon be eased and flagged the potential for travel to and from NZ to resume at some stage. Air New Zealand rose 4 per cent to $1.305, Tourism Holdings was up

2.4 per cent to $1.26 and SkyCity

Entertainment Group — which has Australian assets — rose 9.7 per cent to $2.49, the day’s biggest gain.

Dual-listed banking stocks were stronger yesterday following the success of National Australia Bank’s A$3 billion ($3.2b) placement, Solly said. Australia and New Zealand Banking Group rose 4.8 per cent to

$17.60 and Westpac Banking Corp advanced 4.7 per cent to $16.73. ANZ will report its first-half result today.

Z Energy rose 1.3 per cent to $3.18. It will decide next week if it will seek the wage subsidy. — BusinessDesk