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NZ shares rise; Tourism Holdings rallies on joint venture exit

New Zealand shares rose, led by Tourism Holdings as investors welcomed news the rental RV operator would shore up its balance sheet by selling down its stake in a joint venture project rather than raising money at a steep discount.

Friday, April 3rd 2020, 6:49PM

by BusinessDesk

The S&P/NZX 50 Index advanced 64.62 points, or 0.7 percent, to 9,935.18. Within the index, 29 stocks rose, 18 fell, and three were unchanged. Turnover was $198.4 million.

Tourism Holdings led the market higher, rising 7.5 percent to $1 after it said it reached an agreement with Thor Industries to exit their Togo joint venture. The rental campervan operator will instead focus on a digital strategy in New Zealand and Australia.

Tourism Holdings will sell down its stake for US$6 million and is entitled to an annual dividend of US$600,000 for four years. Thor has a four-year option to buy out the remaining stake for US$20 million.

Greg Smith, head of research at Fat Prophets, said any positive news was being eagerly absorbed by investors during the covid–19 outbreak.

“When a company is not having to undertake a massively discounted capital raising, that is a positive,” he said.

Travel software company Serko climbed 11.1 percent to $2.11 after the company said it would cut costs to limit its monthly cash burn to $2 million until the end of the March 2021 financial year.

Smith said investors were generally more confident that New Zealand would come through the crisis better than other countries.

“There is a feeling that while this is a ‘black swan’ event with severe consequences, New Zealand is not letting the infection and fatality rate get out of hand.”

The local market outperformed others in Asia. Australia’s S&P/ASX 200 was down 2 percent, Hong Kong’s Hang Seng 0.6 percent lower and Shanghai’s composite index was down 0.3 percent.

Port of Tauranga rose 4.3 percent to $6.25. Today the port completed a record-breaking cargo exchange, moving 9,367 twenty-foot equivalent units off a container ship across two days.

Refining NZ increased 3.6 percent to 87 cents

Oil prices jumped more than 20 percent today on the news Saudi Arabia and Russia may have reached a deal to scale back production.

Fuel retailer Z Energy fell 0.7 percent to $2.95 after cutting its dividend and non-essential capital spending. The retailer is in talks with its banks for more working capital flexibility to help it ride out the covid-19 lockdown and volatile oil markets.

SkyCity Entertainment Group sank 10.6 percent to $1.77 after the casino operator laid off 200 workers and warned a further 700 staff may need to go if conditions don’t improve. The company said it envisages its future as a smaller operation with a domestic focus.

Smith said SkyCity may have to consider selling assets or raising money.

“For companies who are in the eye of the storm, they will be able to raise capital but there is going to have to be some meaty discounts,” he said. 

Kathmandu Holdings, which yesterday completed the institutional component of a discounted capital raising, fell a further 4.9 percent to 77 cents in trading today. That's still above the 50 cent issue price.

Westpac Banking Corp declined 3.2 percent to $16.14, Australia & New Zealand Banking Group fell 1.6 percent to $16.38 and Heartland Group was unchanged at 93 cents.

The Reserve Bank this week changed banking registrations prohibiting licensed banks from paying dividends during the virus outbreak and recovery. Smith said that put a “dark cloud” over the domestic banking sector.

Tags: Market Close

« After the ups; the downsNZ shares fall as investors make way for $1b Auckland Airport placement »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 3.55 3.89 3.99
AIA Special - 3.05 3.39 3.69
ANZ 4.44 3.29 3.45 3.85
ANZ Special - 2.79 2.95 3.35
ASB Bank 4.45 3.35 3.19 3.85
ASB Bank Special - 2.85 2.69 3.35
Bluestone 4.44 4.44 4.29 4.34
BNZ - Classic - 2.79 ▼2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.39 ▼3.29 ▼3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 2.80 3.15 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
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Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.80 2.89 3.50
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 4.40 2.95 2.95 3.69
Kainga Ora 4.43 ▼3.29 ▼3.39 ▼3.85
Kiwibank 4.40 3.74 4.14 4.40
Kiwibank - Capped - - - -
Kiwibank - Offset 4.40 - - -
Kiwibank Special - 2.65 2.79 3.25
Liberty 5.69 - - -
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Napier Building Society - - - -
Nelson Building Society 4.95 3.75 3.99 -
Pepper Essential 5.18 - 4.98 4.98
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The Co-operative Bank - Standard 4.40 ▼3.29 ▼3.45 ▼3.89
TSB Bank 5.34 3.59 ▼3.59 4.19
TSB Special 4.54 2.79 ▼2.79 3.39
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Wairarapa Building Society 4.99 3.95 3.99 -
Westpac 4.59 4.15 4.09 4.49
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Westpac Special - 2.79 ▼2.69 ▼2.79
Median 4.55 3.32 3.39 3.69

Last updated: 28 May 2020 10:38am

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