by BusinessDesk
New Zealand's sharemarket rose as eccentric billionaire Elon Musk’s Twitter buy boosted demand for local tech stocks, while Air NZ’s tradeable rights took off.
The S&P/NZX 50 Index rose 68.2 points, or 0.6%, 12,121.39. Turnover was moderate, with $124.6 million traded across the main board.
Air NZ continued to dominate the headlines as investors struggled to get to grips with the $1.2 billion capital raising, prompting the stock market operator’s NZ RegCo arm to send out a note explaining the nature of the tradeable rights. The shares rose 5% to 95 cents on a bigger volume than usual of 5.4m shares, while the rights jumped 53.1% to 75c.
Peter McIntyre, an investment adviser at Craigs Investment Partners, said Air NZ “tested the mathematical minds of many” over the last few days and was trading higher today.
“Where the share price has run to has probably exceeded most people’s expectations,” McIntyre said.
“I think we're going to see more rights trading during the week as the week goes on.”
Tech stocks led the local market higher, joining a global rally after Musk’s US$3b (NZ$4.2b) stake in social media platform Twitter buoyed markets in the US and spilled over into Asian markets.
Vista Group International posted the day’s biggest gain, up 5.7% at $1.85 while Pushpay advanced 4.5% to $1.16.
McIntyre said Musk’s trading boosted tech stocks around the world.
“Tech sector heavyweights in the US did a lot of heavy lifting overnight since that announcement,” he said. “They’ve had good gains and that sentiment has definitely flowed through into our market today."
Other tech companies to gain included Harmoney, up 4.2% at $1.50, Scott Technology, up 3.1% at $3.30, Rakon up 3.1% at $1.69 and Trade Window, up 2.2% at $1.85.
Infratil edged up 0.1% to $8.19 after saying Matt Clarke will take over as chief executive of Wellington International Airport when Steve Sanderson leaves at the end of the month.
Synlait Milk rose 3.3% to $3.48, while A2 Milk dropped 2.3% to $5.52.
Among the day’s biggest decliners, Pacific Edge and Oceania Healthcare unwound some of yesterday’s gains, falling 3.9% to 99c and 3.6% to $1.08 respectively.
The NZ dollar fell below 92 Australian cents after the Reserve Bank of Australia kept its target cash rate at 0.1% and signalled it could raise the key rate if wages and inflation data show strong results in the coming months.
The kiwi traded at 91.75 Australian cents at 5.30pm in Wellington, down from 92.13 cents at 3pm before the announcement and 92.26 cents yesterday. It was stronger against the greenback, trading at 69.46 US cents at 3pm from 69.23 cents yesterday, while the trade-weighted index edged up to 74.59 from 74.37.
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