by Paul McBeth
New Zealand’s S&P/NZX 50 index came back from the long King’s Birthday weekend on the backfoot, with Infratil weighing on the bourse as the hot artificial intelligence trade cooled in the wake of Anthropic’s plans to go public and as oil prices remained elevated in the face of an elusive peace in the Middle East.
Heartland Group Holdings neared a three-month high after agreeing to buy New Plymouth-based lender TSB for $620 million in a vendor-financed deal that will see the Toi Foundation end up with a near-18% stake of the enlarged group if it gets over the line.
Meanwhile, Green Cross Health surged by more than a third after it agreed to sell its medical arm, The Doctors, to iwi-backed digital-first health firm Tend Health for $270 million.
And Spark New Zealand sank to a 15-year low after the National Business Review reported on the telco’s protracted underperformance.
Sinking feeling
The NZX50 fell 73.84 points, or 0.6%, to 13,170.71, with 29 stocks declining, 20 gaining and one unchanged. The S&P/NZX 20 index futures contract for June declined 0.6% to 7,456, with 1 lot traded for a value of $7,465. The NZX20 dropped 0.5% to 7,473.86.
Turnover across the main board was $199.2 million, with Fisher & Paykel Healthcare accounting for $30.7 million as the medical device maker slipped 1.3% to $36.80.
New Zealand’s stock market returned from the long weekend with elevated oil prices as peace talks in the Middle East remained uncertain, with the Polymarket prediction market pricing a 27% chance of a lasting deal by the end of this month and a 40% chance by the end of July.
Brent crude oil futures dipped 0.8% to US$94.27 a barrel at 5pm in Auckland after a sharp gain on Monday.
Stock markets across Asia were mixed as the heat in the recent AI rally subsided, with South Korea’s Kospi down 1.4% in late trading and Japan’s Nikkei slipped 0.9%, while Hong Kong’s Hang Seng climbed 1.6%. Australia’s S&P/ASX 200 index dipped 0.3% in late trading.
Local tech companies were mixed, with Vista Group International leading the NZX50 lower as it dropped 5.8% to $2.44 and Serko fell 4.7% to $1.62, while Gentrack jumped 7.9% to $3.96.
Infratil was the biggest drag on the local bourse on Tuesday, declining 3% to $15.29 as the infrastructure investor gave back some of its 26% gain in May.
New lows
Spark dropped 4.1% to $1.88, its lowest level since April 2011 on an adjusted basis, after the NBR reported on the telco losing ground to its competitors and discontent about the company’s leadership. The telco was the most heavily traded stock on the day with a volume of 5.6 million shares changing hands.
Heartland posted the biggest gain on the day, jumping 11% to $1.27 after agreeing to buy TSB for $620 million. The deal requires regulatory and shareholder approval, and is expected to be completed by the end of the year to create the country’s seventh-biggest bank, behind the big Australian-owned four, state-owned Kiwibank and agri-lending specialist Rabobank.
“It’s going to be small relative to the big four, but the merger makes sense and the $34 million of synergies covers their acquisition costs,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene. "No capital raise was a nice touch – Heartland’s got a vendor loan.”
Listed property stocks were broadly weaker as the yield on the 10-year government bond rose 3 basis points to 4.55%. Stride Property fell 2.6% to $1.135 after long-serving chair Tim Storey stepped down from the board as previously signalled, with David Green appointed as his replacement.
Tourism Holdings slipped 2.3% to $2.59, giving back some of Friday’s rally on the $3.10 takeover bid from the Trouchet family and BGH Capital. The rental campervan operator hired former Pie Funds exec Kylie Elsom as its chief people and capability officer.
Fonterra Shareholders’ Fund units dipped 0.1% to $7.19 after the dairy exporter said chief innovation and brand officer Komal Mistry-Mehta would leave the cooperative in October.
Outside the benchmark index, Green Cross surged 36% to $2.04, having climbed as high as $2.25 – near a nine-year high – after agreeing to sell its medical arm to Tend for $270 million.
AoFrio was unchanged at 6.9 cents ahead of a $5 million rights offering at 7 cents a share.
Warehouse Group slipped 1.6% to 61 cents, a new low, after the Commerce Commission said grocery competition hadn’t improved, with the major supermarkets retaining more than 80% of the national market.
The kiwi dollar fell to 59.33 US cents at 5pm from 59.69 cents yesterday, and declined to 82.85 Australian cents from 83.08 cents.
Paul is a staff writer for Good Returns based in Wellington.
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