MARKET WRAP: NZ shares fall ahead of US July 4 celebrations

New Zealand shares slipped today, ahead of Wall Street’s closure for the July 4 holiday.

The S&P NZX50 index fell 27.95 points to 9025.64, on turnover of $101 million.

“The main thing that has been weighing on markets recently is the trade skirmish, [it’s] not quite a full-blown war as yet, but the fallout has been particularly felt in Asia,” Fat Prophets head of research Greg Smith says.

Closer to home, A2 Milk shares fell 3.39% to $11.40 in response to a 5% slump in traded dairy products overnight.

The biggest drop, of 7.3% to $US2905/t, was for the benchmark whole milk powder, which made up half the total volume sold.

A2’s supplier, Synlait Milk, also dropped on the news, its shares were down 0.95% to $11.44.

Serko shares gained 0.68% to $2.96 after it signed a reseller agreement for its Zeno technology with Orbit World Travel. Orbit will begin to implement the platform, which will be known as Orbit Online, later this year.

“It’s certainly a tick in the box. Orbit is New Zealand’s largest corporate travel management company and it’s a multi-year term,” Mr Smith says.

Embattled Steel & Tube picked itself up. Its shares gained 1.33% to $1.52. Mr Smith says it’s been a “traumatic time” for its investors recently.

In May, the company revised its guidance for the financial year to June 30, 2018. It expects normalised EBIT of approximately $16m, excluding non-trading costs and impairments of up to $54m. That will result in an EBIT loss of approximately $38m. 

Orion Health rose a further 0.88% to $1.15 on news of an asset sale plan. Yesterday the company said it will sell a majority stake in its core Rhapsody business and a quarter stake in its Population Health division to UK private equity firm HgCapital.

Sky Television might be bleeding subscribers, but that wasn’t reflected on the market today, as its shares gained 4.2% to $2.73. Mr Smith says the company has had a “substantial loss of shareholder value” over the past four years.

“Perhaps a little bit early to say the worm has definitely turned, particularly given increasing competition and disruption on a number of fronts.”

Gentrack Group was placed in a trading halt today as the company advised that it intends to raise approximately $90m of new equity through a fully underwritten accelerated entitlement offer. On June 21, 2018, Gentrack announced that it had entered into an agreement to acquire Evolve Parent Limited and Evolve Analytics, which helps big energy utilities in the UK handle their settlement and billing data, for £23.0m ($44.2m).

“It’s fair to say the company has been a savvy acquirer over the last couple of years,” Mr Smith says.

The market will be eagerly anticipating US-China tariffs, which are set to kick in on Friday.

“I don’t think we are going to see an extraordinary reaction given that’s already been well flagged and well known to the market,” Mr Smith says.