Market close: NZ sharemarket falters on surprise Air New Zealand move

The New Zealand sharemarket faltered on the surprise move by Air New Zealand to delay its capital raising and the continued uncertainty over the activity of the offshore clean energy exchange traded funds.

The S&P/NZX 50 Index fell 58.25 points or 0.46 per cent to 12,574.35, after reaching an intraday high of 12,686.33. There were 81 gainers and 62 decliners over the whole market on volume of 56.59 million share transactions worth $219.47 million.

Shane Solly, portfolio manager for Harbour Asset Management, said there was a lot of noise on the market.

“People were anticipating a capital raise by Air New Zealand in June and now it’s been pushed out to September. And the cleaning out of the exchange traded funds holdings in Contact and Meridian is taking longer than expected,” he said.

Air New Zealand told the market its big capital raising won’t take place by at least September 30, and it has renegotiated its existing loan with the government, increasing it by $600m to $1.5 billion for an additional 16 months through to September 2023.

So far Air New Zealand has used $350m of the loan, and its share price gained 2c to $1.83. The stock has now doubled in 12 months, having been 90c on April 4 last year.

Solly said Air New Zealand is still burning cash but “I guess now it’s not losing as much money. It needs to have a balance sheet that is robust enough to withstand the challenges of the sector.”

Contact and Meridian headed the trading by value, suggesting the iShares Global Clean Energy ETFs were still in selling mode. Contact finished at $7.05, up 1c, on trade worth $30.77m, and Meridian also gained 1c to $5.45, with $33.76m worth of its shares changing hands. Mercury Energy gained 3.5c to $6.525.

Cancer diagnostics company Pacific Edge surged 21c or 21.21per cent to $1.20 after announcing a new agreement in the United States. The company’s Cxbladder tests will be covered by United Healthcare, the largest healthcare group in the US, and including previous deals Pacific Edge now has access to more than 110 million Americans.

Solly said Pacific Edge gained “a real ripper of a client in the US and it is now well on track to being profitable. It’s been a long, long investment for some people.”

Transport technology company EROAD rose 26c or 5.56 per cent to $4.94 after also signing up a large and meaningful Australian customer. Infrastructure services company Ventia is installing 4000 EROAD electronic distance recorders in its Australian and New Zealand fleets, and will be paying a monthly subscription for five years. EROAD’s share price has risen $1 in the past three weeks, after sitting at $3.94 on March 19.

Market leader Fisher and Paykel Healthcare had a late fall, losing 18c to $33.42 on trade worth $23.9m after reaching an intraday high of $34.14; and a2 Milk gave back its gain of the previous day, falling 29c or 3.26 per cent to $8.60.

Leading wine exporter Delegat Group gained 26c or 1.76 per cent to $15; Serko was up 11c to $6.90; Scales Corporation increased 15c or 3.37 per cent to $4.60; and Scott Technology rose a further 20c or 9.09 per cent to $2.40 on the back of its solid half-year financial result.

Ryman Healthcare fell 40c or 2.58 per cent to $15.10 after a broker’s research note warned its new retirement village developments could take longer to become profitable. Fellow operators Summerset Group Holdings was up 5c to $11.89, and Oceania Healthcare gained 2c to $1.32.

Ebos Group fell 30c to $29.80; Freightways decreased 13c to $11.17; Spark slumped 8c or 1.78 per cent to $4.415; Port of Tauranga shed 10c to $7.50; Auckland International Airport was down 7c to $7.61; and Pushpay Holdings declined 6c or 2.88 per cent to $2.02. The Bankers Investment Trust was down 20c or 8 per cent to $2.30.

Investore Property, which houses Countdown supermarkets, increased 5c or 2.42 per cent to $2.12 following a $57.5m property valuation gain for the six months ending March. Investore’s portfolio is expected to be worth $1.038b at March 31, with a loan-to-value ratio of 26.8 per cent.

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