Sky TV bounced from a two-month low as Paramount pulled up its sleeves in the fight for Warner Bros Discovery.
New Zealand’s S&P/NZX 50 index fell as a hike in mortgage rates by Westpac New Zealand and the Reserve Bank of Australia’s cautious pause had investors second-guessing whether interest rates are poised to start rising, weighing on companies held for their reliable dividends such as Mercury NZ and Vector.
Trans-Tasman materials firm Vulcan Steel led the benchmark index lower, while Vista Group International declined after its target price was downgraded by UBS analysts over the slowdown in global box offices.
Meanwhile, Sky Network Television bounced from a two-month low after Paramount Skydance lobbed in a hostile takeover for Warner Bros Discovery, attempting to scuttle Netflix’s successful deal for the owner of the HBO library – a key component of Sky’s Neon entertainment offering.
And minister Chris Bishop unveiled an overhaul of resource management law, with a view to almost halving the number of consents required, and receiving a mixed market response from the likes of developers Winton Land and CDL Investments and materials firm Fletcher Building.
The NZX50 fell 31.54 points, or 0.2%, to 13,454.78, with 31 stocks declining, 15 gaining, and four unchanged. Turnover across the main board was $214.9 million, of which Auckland International Airport accounted for $32.1m as it rose 1.3% to $8.09. The airport operator’s volume of almost 4 million share was the most for the day.
The kiwi dollar climbed to 87.32 Australian cents at 5pm in Auckland from 87.07 cents yesterday after the Reserve Bank of Australia kept the target cash rate at 3.6% as expected, saying inflationary risks have moved to the upside and the board is cautious about moving. The kiwi was little changed at 57.86 US cents from 57.85 cents yesterday.
Australia’s S&P/ASX 200 index was down 0.2% in late trading, in a mixed session across Asia, with Singapore’s Straits Times Index up 0.3% and Hong Kong’s Hang Seng falling 0.8%.
Meanwhile, Westpac New Zealand hiked its two- through five-year mortgage rates by 30 basis points, while also trimming its six-month special.
“There’s a lot of chatter about whether it’s signalling we’re at the bottom and they’re actually trying to protect their margin,” said Greg Smith, investment specialist at Generate Investment Management. “The Reserve Bank of New Zealand will still want the optionality to put through another rate cut in February depending on what happens to the economy.”
Interest rate-sensitive companies weighed on the benchmark index after the RBA’s decision and the mortgage rate hike by Westpac. Companies held for their reliable dividends – which lose their appeal when term deposit rates rise – weighed on the index, with Mercury NZ falling 1.7% to $6.33 and Vector down 1.7% at $4.64.
Commercial landlords were also broadly weaker. Stride Property Group declined 1.4% to $1.40, Property for Industry slipped 1.2% to $2.45 and Kiwi Property Group fell 0.9% to $1.055, while retirement village operator Summerset Group Holdings was down 1.6% at $11.94.
Vulcan Steel led the benchmark index lower, falling 4.2% to $7.85, while heavyweights Infratil declined 0.8% to $11.70 and Fisher & Paykel Healthcare dipped 0.3% to $38.06.
Tower decreased 0.3% to $1.945 after the High Court approved the $7 million penalty sought by the Financial Markets Authority over the insurer’s multi-policy discounting errors. Tower had fully provided for the penalty.
Vista Group International dropped 3% to $2.57 after UBS analysts cut their target price on the cinema analytics firm 23% to $2.80.
Generate’s Smith said Vista’s push into a software-as-a-service model has made its business more aligned to the global box office, which has still to return to pre-covid levels.
Meanwhile, Sky Network Television clawed back most of yesterday’s losses, climbing 6.8% to $3.45 after Paramount Skydance lobbed in a hostile takeover for Warner Bros Discovery – which owns HBO – in a bid to trump Netflix’s US$72 billion deal, which has the blessing of the US media group’s board.
“It’s potentially less negative for Sky than if Netflix were to buy it and cut off the HBO library,” Smith said.
Outside the benchmark index, property developer Winton Land rose 0.5% to $1.96 after the government announced plans to overhaul resource management law, with a view almost halving the number of consents required under the current system. CDL Investments dipped 0.6% to 78 cents, while materials firm Fletcher Building slipped 0.5% to $3.70.
Reporting by Paul McBeth.
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