tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Monday, August 15th, 12:54PM

Investments

rss
The Markets

Pacific Edge shares plunge on risk of revenue loss

Pacific Edge shares sank by almost 50% on the possibility its cancer tests will no longer be covered by a major US health insurance company after the cancer diagnostic company’s trading halt was lifted as the market opened today.

Monday, August 1st 2022, 6:04PM

by BusinessDesk

But Pacific Edge's bad news wasn’t enough to drag the market down thanks to infrastructure group Infratil lifting the main index higher on the news of its US$300 million (NZ$476m) deal with a German insurer.

The S&P/NZX 50 Index rose 33.2 points, or 0.29%, to 11,525.87. Turnover was $89.6 million. 

Pacific Edge told the NZX this morning that its cancer tests could be dropped by a major US health insurance company that is considering a new way to choose which tests are covered. 

Medicare provider Novitas currently reimburses the use of Cxbladder – but won’t under a new process it has proposed. 

If the proposal is adopted, Pacific Edge said Cxbladder would no longer receive reimbursement from Novitas, which makes up “a significant part” of current testing revenue.

Shares in the company almost halved when the trading halt was lifted at market open, falling 48% to just 40 cents – their lowest price since 2020.

Peter McIntyre, an investment advisor at Craigs Investment Partners said it would be a “major blow” for the company if that avenue of US revenue was taken away.

He said it wasn’t surprising how the market had responded to the news and commented that Pacific Edge had seemed “quietly confident” in its announcement – so all hope wasn’t lost.

Pacific Edge’s shares made up a scrap of lost ground by the end of the day but were still down 37.8% to 48.5 cents.

It was Infratil’s Longroad Energy investment announcement that helped haul the market higher after the infrastructure group told the NZX it had agreed to sell a 12% stake to German insurer Munich Re for US$300 m.

The deal puts a pre-money valuation of US$2 billion on the renewable energy developer. Infratil’s shares were up 6.7% to $8.94 by the end of the day.

Plexure Group shares also rose 77.6% to 32.5 cents – rising 14.2 cents today – on the 5-year contract renewal to its biggest customer, McDonald’s.

Chief executive Dan Houden said he was excited about the continued partnership with the fast-food chain and was looking forward to working towards their mutual goal of delivering “excellent experiences” for McDonald’s customers.

On the building front, Fletcher Building was down 1.9% to $5.06 and land development company CDL Investments also fell 3.5% to 84 cents.

Statistics NZ's new building consent data this morning said that the year to June’s 50,736 residential consents were slightly less than the previous month of the year to May with 51,015 consents – but still marked the fourth consecutive month where the annual number of new homes consented had surpassed 50,000.

“Home consents have remained near historically high levels, with a decrease in stand-alone houses being largely offset by high levels of consenting activity for multi-unit homes,” construction and property statistics manager Michael Heslop said.

The number of standalone houses consented to in June fell 5.5%, following a 1.6% drop in May 2022. Since June 2021, standalone house consents have decreased by 21%.

Aged care provider Ryman Healthcare was up 0.8% to $9.35 but Third Age Health Services was down 12.2% to $1.94 by the end of the day.

Third Age Health Services told shareholders on Friday that the high court in Napier had placed the Third Age Digital Health into liquidation, with Damien Grant and Adam Botterill of Waterstone Insolvency being appointed as liquidators.

Radius Residential Care also fell 4.2% to 34.5 cents. Fonterra Shareholders' Fund Units were down 1.6% to $2.97 by early evening trading.

Fonterra is closing its milk powder plant at its Brightwater site near Nelson in April 2023, with a loss of 30 jobs, as it grapples with declining milk supply.

The small ageing plant processes about 0.25% of Fonterra’s overall milk supply into whole milk powder.  

The NZ dollar was trading at 62.92 US cents at 3pm in Wellington, down from 62.95 cents on Friday. The trade-weighted index was at 71.27, from 71.10 on Friday.

The Reserve Bank of Australia is set to release its cash rate decision tomorrow afternoon and CMC analyst Tina Teng said it was “almost certain” that the RBA will raise the cash rate by another 50 basis points to 1.85%.

“The strong employment data will not hold back the reserve bank on its pace for rate hikes,” she said. 

“But less aggressive rhetoric from the Fed last week could encourage a slowdown by the RBA after September.”

Tags: Market Close

« Mainfreight shares rally for second day on US updateSpeculative A2 Milk spike drags NZX50 higher »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

AM Update - Your morning business news update

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 6.35 5.25 5.45 5.99
ANZ 6.34 5.59 6.05 6.29
ANZ Blueprint to Build - - - -
ANZ Special - 4.99 5.45 5.69
ASB Bank 6.35 ▼4.99 5.45 5.69
Avanti Finance 6.65 - - -
Basecorp Finance 7.25 - - -
Bluestone 6.89 - - -
BNZ - Classic - 4.95 5.39 5.69
BNZ - Mortgage One 6.39 - - -
BNZ - Rapid Repay 6.39 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 6.39 5.55 5.99 6.29
BNZ - TotalMoney 6.39 - - -
CFML Loans 7.25 - - -
China Construction Bank - 5.35 5.80 5.99
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 4.89 - -
Co-operative Bank - Owner Occ 6.25 4.99 5.39 ▼5.69
Co-operative Bank - Standard 6.25 5.49 5.89 ▼6.19
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 5.35 5.85 -
Heartland Bank - Online 4.60 ▼4.79 ▼5.15 ▼5.14
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 6.50 5.60 6.00 -
HSBC Premier 6.34 5.09 5.34 5.59
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 6.00 ▼4.79 5.15 ▼5.69
Kainga Ora 5.85 5.31 5.58 5.97
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.00 5.95 6.45 ▼6.59
Kiwibank - Offset 6.00 - - -
Kiwibank Special - 4.95 5.45 ▼5.69
Liberty 4.84 - - -
Lender Flt 1yr 2yr 3yr
Nelson Building Society ▲6.95 5.55 6.15 -
Pepper Money 5.29 - - -
Resimac 5.59 6.54 6.44 6.98
SBS Bank 6.29 ▼5.39 ▼5.79 5.99
SBS Bank Special - ▼4.89 ▼5.29 5.49
Select Home Loans 6.89 - - -
TSB Bank 7.05 5.65 6.09 6.39
TSB Special 6.25 4.85 5.29 5.59
Unity 5.65 4.95 5.55 -
Wairarapa Building Society 6.49 5.55 6.15 -
Westforce credit union - Special - 5.35 5.85 -
Lender Flt 1yr 2yr 3yr
Westforce credit union - Standard 5.85 6.05 6.55 -
Westpac 6.39 5.55 6.05 6.29
Westpac - Offset 6.39 - - -
Westpac Special - 4.95 5.45 5.69
Median 6.34 5.33 5.79 5.83

Last updated: 15 August 2022 8:19am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com