Market close: NZ Sharemarket flat with Westpac off the table

New Zealand shares traded sideways on modest turnover amid disappointment that Westpac had decided not to demerge its New Zealand business, which could have resulted in a new listed entity.

Current themes around inflation and interest rates remain the main focus though, with global markets taking note of US Fed chair Jerome Powell reiterating his views that policymakers will be patient in waiting to lift rates.

The S&P NZX 50 Index closed flat for the day at 12,586.89.

Just 31.1 million shares worth $141m changed hands. There were 51 gainers and 74 decliners among the 186 securities listed on the main board.

“There’s very little news flow from corporates at the moment,” said Greg Smith, managing director of Fat Prophets.

“There is some relief that May and June, which have tended to be quite seasonally weak in the past, have held up relatively okay. There is the outbreak in Sydney reminding us about the risks the pandemic brings of course.”

Westpac dipped 42c, or 1.5 per cent top $27.72 as the Australian-owned bank revealed its New Zealand business would remain part of the wider group, saying a demerger of the New Zealand banking business would not be in the best interests of its shareholders.

The decision will have disappointed institutional investors hoping the review may have created the country’s largest listed company.

“It is disappointing but not surprising that Westpac has backed down,” Smith said. “It could have been a big boost for the stock market. In reality Westpac were effectively throwing their toys out of the cot and trying to send a pretty strong message to the regulators here, but the reality is the NZ operation is very profitable.”

Fonterra units closed up 5c at $3.75 while the co-operative’s untradeable shares slipped 1c to $3.15.

The Herald reported some Fonterra shareholders are hotly rejecting Fonterra’s capital structure review and are campaigning against directors due to a significant decline in their share price.

Synlait fell 15c, or 3.92 per cent, to $3.68 and the a2 Milk Company was up 6c at $6.56.

Cavalier Corporation was the day’s biggest gainer, rising 4.5c, or 11 per cent, to 45c.

The carpet maker on Wednesday named former Icebreaker boss Greg Smith as its new chief executive, taking over from Paul Alston.

Skellerup also had a good day, gaining 15c (3.23 per cent) to $4.80.

Tourism Holdings climbed 12c, or 5.18 per cent, to $2.64 following a market update that sales were above expectations and the company is expecting a full-year net loss on the lower side of its $14-18m forecast range issued in April.

Auckland International Airport gained 5c, or 0.68 per cent, to $7.35 but Air New Zealand fell 2c (1.27 per cent) to $1.55. Serko, another travel stock, closed up 25c, or 3.29 per cent, at $7.85.

Vista Group dipped 3c, or 1.22 per cent to $2.30. The cinema software company said its cash flow was improving steadily as cinemas around the world reopen.

Oceania Healthcare updated shareholders on its current aged care developments and development pipeline at the company’s annual meeting. The shares fell 2c to $1.44.

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