Vital Healthcare led the local bourse lower this week.
New Zealand’s S&P/NZX 50 index joined a global slump as the resumption of service from the US federal government revived fears that the Federal Reserve won’t cut interest rates as steeply once it starts receiving official data.
Vital Healthcare Property Trust posted the biggest decline for the week as the medical property landlord raises $220 million to bring its external management contract with Canada’s Northwest inhouse, while Mainfreight notched up the biggest gain as investors took some heart out of its first-half earnings on Wednesday.
Tech companies Gentrack and Vista Group International were the hardest hit in Friday trading, leading the bourse lower as they followed the cues set on Wall Street where the Nasdaq Composite was rattled by growing unease about the lofty valuations underpinning the likes of Nvidia and Tesla.
Meanwhile, Comvita has all but given up on the 80 cents per share takeover scheme from Mark Stewart’s Florenz, with the board working on a recapitalisation plan after early voting made it most unlikely of reaching the two thresholds needed to pass.
The NZX 50 fell 133.41 points, or 1%, to 13,464.46 on Friday, with 34 stocks declining, seven gaining, and nine unchanged. Turnover across the main board was $130.3 million, of which Infratil accounted for $13.5 million as it declined 1.6% to $11.78.
New Zealand’s benchmark index fell 1% for the week, snapping three weeks of gains, with Vital Healthcare Property Trust sliding 11% to end the week at $1.93, just below the $1.95 offer price it’s selling units at to raise $220 million. It fell 0.8% on Friday.
The medical property investor is paying $214 million to bring its management inhouse.
Meanwhile, Mainfreight gained 15% this week after saying it expects New Zealand and Australia to improve in the second half of the March year, and that it’s been cutting costs across its business. The logistics firm slipped 1.3% on Friday to close the week at $67.58.
Stocks across Asia were broadly weaker on Friday, with Japan’s Nikkei 225 index down 1.6% in late trading, while Australia’s S&P/ASX 200 fell 1.4% and Hong Kong’s Hang Seng dropped 1.3%.
That followed a subdued session on Wall Street, where the tech-heavy Nasdaq was the hardest hit as the reopening of the federal government revived fears the Federal Reserve won’t cut the key interest rate as aggressively once it starts receiving official economic data, and as investors fret about high valuations underpinning tech stocks fuelled by the artificial intelligence boom.
“The US shutdown has resolved itself and there’s been a bit of a market retrenchment off the back of that,” said Richard Parkin, an investment adviser at Hamilton Hindin Greene. “It’s really a mixed bag – the defensive stocks have done a little better than the tech stocks, which are having a bit of a mixed time.”
The kiwi dollar rose to 56.87 US cents at 5pm in Auckland from 56.56 cents yesterday, and gained to 86.94 Australian cents from 86.26 cents after the BNZ-Business NZ performance of manufacturing index showed accelerating growth in industrial activity last month.
Gentrack led the local stock market lower on Friday, falling 4.7% to $8.07, while Vista Group International dropped 4.4% to $2.58 and Serko declined 1.9% to $2.59. Outside the benchmark index, Eroad sank 8% to $1.50.
Fisher & Paykel Healthcare declined 1% to $37.69.
Air New Zealand posted the biggest gain on the day, up 1.6% at 62.5 cents, while Vector increased 1.2% to $4.89.
Precinct Properties NZ was the most heavily traded stock on the day with a volume of 2.5 million shares changing hands, with the price unchanged at $1.22.
Outside the benchmark index, Comvita sank 11% to 53 cents after a large enough minority opposed the 80 cents per share offer from Mark Stewart’s Florenz entity, blocking the proposed $56 million takeover before the count is finalised. Chair Bridget Coates told the special meeting that the result will be announced on Monday, but that the board is starting work immediately on a recapitalisation plan with a view to having something to discuss at next month’s annual meeting in Papamoa.
Synlait Milk slid 2.8% to 69 cents after the milk processor said it’s increased its working capital facility for four months after a cash squeeze in the latest financial year.
Reporting by Paul McBeth.
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