Pacific Edge falls as NZ market sinks into the red
New Zealand's benchmark share index edged lower while cancer diagnostics firm Pacific Edge experienced another share price tumble.
Monday, October 2nd 2023, 5:53PM
by BusinessDesk
The S&P/NZX 50 Index fell 53.1 points, or 0.5%, to 11,243.29. Turnover was a very light $57.8 million. There were 59 gainers and 78 decliners on the main board.
Devon Funds head of retail Greg Smith said September was a tough month for international markets, but because October was known as the ‘bear killer’ month, there was “reason for optimism” going into the last quarter of the year.
Smith said the NZX50 declined 2.2% in September, with a bigger fall of 5.2% during the quarter.
He added it remained to be seen if NZ would catch some “seasonal tailwinds” from offshore, plus if the mood of investors improved once the election was done and dusted.
On the company news front, Pacific Edge shares took a 13% dive during early trading as the news broke that the US Food and Drug Administration (FDA) plans to impose regulations on lab-developed tests, including CxBladder.
The FDA has put forth proposed rule changes that would categorise lab-developed tests as medical devices under the US Federal Food, Drug, and Cosmetic Act, according to Pacific Edge.
This alteration would necessitate the NZ-based cancer diagnostics company to furnish the FDA with evidence demonstrating the safety and effectiveness of their tests for their intended purposes, in addition to the existing regulatory requirements.
Pacific Edge said it was currently assessing the implications of this proposed rule change on its business but noted that it has been aware of the FDA's intention to expand its oversight to encompass lab-developed tests for some time.
The company stated that it has taken proactive measures to prepare for this potential regulatory shift to minimise disruptions to its US operations. The stock was down 9.9% to 10.9 cents by midafternoon trading and ended the day down 1.3 cents or 10.7% to 10.8 cents.
Trade software management firm Trade Window fell 4.5 cents or 14.1% to 27.5 cents on very light trading after announcing that tech firm nChain – which had an $11.6m agreement with the company, and nChain was set to invest $2.4m in exchange for 6,050,508 TradeWindow shares.
“During the course of Friday evening and over the weekend, it became apparent to TradeWindow that following Board and Management changes at nChain, the UK company is currently not in a position to make payment of the cash subscription amount as scheduled under the strategic partnership agreement,” the company said.
“TradeWindow has engaged legal counsel and intends to pursue available remedies in respect of the breach by nChain under the strategic partnership agreements.”
Spark was down 2 cents or 0.4% to $4.79. The telco announced on Monday it had set its sights on the gaming community with its latest project, Spark Game Arena – however, the specifics of the new endeavour remain undisclosed.
Carpet maker Bremworth jumped 4 cents or 8.5% to 51 cents after the company released its annual report for its 2023 financial year. Cinema software group Vista Group rose 9 cents or 6.3% to $1.53, while Freightways was up 29 cents or 3.6% to $8.45.
Healthcare wholesaler Ebos Group jumped $1.07 or 3.1% to $35.25, and The Colonial Motor Company was up 30 cents or 3.4% to $9.03.
Going in the other direction, tech company Serko fell 19 cents or 4.4% to $4.11, and KMD Brands was down 3 cents or 3.5% to 84 cents.
Mainfreight fell $2.13 or 3.3% to $63.05, and Auckland International Airport edged down 17 cents or 2.2% to $7.74.
No surprises?
Its monetary policy decision-time on this side of the world this week.
Kiwibank economists said that this week, the spotlight turns to the Antipodean central banks, with the Reserve Bank of Australia (RBA) out the gate first on Tuesday.
“Despite a change in governor, no change in policy and forward guidance are expected. A hawkish hold is the likely outcome,” they said.
The Reserve Bank of New Zealand (RBNZ) follows suit on Wednesday, and it isn’t expected that NZ’s central bank will make any surprise moves either.
“The cash rate is expected to be left untouched – 5.50% – and the statement will reaffirm the need to keep rates restrictive,” Kiwibank economists said.
“The RBNZ’s job: stabilise inflation.”
The NZ dollar was trading at 59.93 US cents at 3pm in Wellington, up from 59.66 on Friday. The trade-weighted index was at 71.07, from 70.75 on Friday.
| « Sharemarket rises on quarter-end buying | NZ market flat as RBA hits the handbrake » |
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