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NZX 50 slips as Auckland airport shares rise

Auckland International Airport jumped nearly 2% after Auckland council finally decided to sell 7% of its 18% shareholding, while the New Zealand sharemarket was down slightly.

Friday, June 9th 2023, 6:30PM

by BusinessDesk

The S&P/NZX 50 dipped at lunchtime and closed at 11,690.34, down 25.4 points or 0.22%. The index fell nearly 1.8% for the week.

There were 61 gainers and 66 decliners on the main board, with 33.6 million shares worth $138.34m changing hands.

Auckland International Airport was up just a couple of cents but when the two-day council debate to balance the budget ended, the airport’s share price finished at $8.75, up 17c or 1.98% on trade worth $14.69m.

The airport, the third-biggest local stock on market capitalisation, traded between a low of $8.505 and a high of $8.75 during the day. At current prices, the council would receive about $865m for its parcel of shares.

Mark Lister, investment director with Craigs Investment Partners, said selling some of the airport shares was a reasonable compromise – though all parties will be equally unhappy –  and will soften the blow to ratepayers.

“At 11%, the council still has a large stake in the airport which is a great asset that will do well over the long term,” Lister said. "The market reacted positively because it realised that fewer shares would be sold than first thought.

“If the council sold its entire stake, that’s a lot of stock for the market to absorb and would have put pressure on the share price in the short term. When a large block, like the council’s, is sold down, it’s usually at a discount – and who knows what the share price will be when they go to the market.”

Lister said the council is not a natural owner of businesses and doesn’t have expertise in running an airport, and it doesn’t have influence. “Some people would argue there’s better uses for capital, such as investing in new Auckland infrastructure, rather than sitting as a passive investor.

“It was an interesting development to end the week and on top of the earlier Ebos, Pacific Edge and Infratil news, the market had its share of excitement over the past four days. No wonder it closed on a quieter note,” he said.

A busy week ahead

The market next week will again be focussed on macroeconomics, with the United States, Japan and European central banks meeting to decide on their latest interest rate moves.

NZ’s gross domestic product performance for the March quarter will be released and will indicate whether the country is getting close to a recession or the economy is holding up better than expected.

In the US, the S&P 500 Index entered a bull market after rising 0.62% to 4293.93 points, 20% above its October lows when it fell under 3600 points.

The Dow Jones Industrial Average was up 0.5% to 33,833.61 points, and the Nasdaq Composite increased 1.02% to 13,238.52 – now gaining 26.5% for the year. The Nasdaq was down as much as 40% during last year but the optimism in stocks associated with artificial intelligence has changed all that.

At home, Fisher and Paykel Healthcare was down 46c or 1.91% to $23.62; a2 Milk shed 5c to $5.74; Synlait decreased 4c or 2.23% to $1.75; and Briscoe Group declined 10c or 2.25% to $4.35.

Green Cross Health declined 4c or 2.78% to $1.40; Smartpay Holdings was down 7c or 3.68% to $1.83; and Cooks Coffee decreased 1.5c or 3.33% to 46.5c.

In the energy sector, Mercury was down 15c or 2.35% to $6.22 after filling its $150m five-year green bond. The bonds carry an interest rate of 5.64% a year and will be issued on June 19. Manawa gained 6c to $4.69, and Contact declined 13c to $7.82.

Serko was up 15c or 4.53% to $3.46; Ventia Services increased 6c or 2.05% to $2.99; and Restaurant Brands gained 14c or 2.12% to $6.73.

Eroad was down 2c or 2.41% to 81c after receiving a price enquiry from NZX’s NZRegCo over its share price rise from 57c on May 25 to 87c during June 8 – an increase of 52.6%. Eroad said it was complying with its continuous disclosure obligations.

Kiwi Property declined 1.5c to 90.5c after telling the market it has a conditional sale of Aurora Centre in Wellington to an institutional investor for $142.8m, a 13.5% discount to the March valuation but providing an overall return of 10.5%.

In other property stocks, Precinct was up 3c or 2.46% to $1.25, and Property for Industry gained 4c to $2.36.

Heartland Group was down 3c or 1.8% to $1.64; Skellerup declined 10c or 2.13% to $4.60; Third Age Health decreased 5c or 3.33% to $1.45; and AFT Pharmaceuticals shed 11c or 2.94% to $3.63.

Tags: Market Close

« NZX50 dips for third day in a rowNZX50 dips as investors wait on data »

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