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MARKET CLOSE: NZ shares down, Kathmandu, Synlait drop while Pacific Edge jumps

Monday 30th July 2018

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New Zealand shares dropped, giving up gains from Friday, with Kathmandu Holdings and Synlait Milk leading the index lower.

The S&P/NZX50 Index fell 74.7 points, or 0.8 percent, to 8,921.38. Within the index, 42 stocks fell, six rose and two were unchanged. Turnover was $82.9 million. 

"On Friday there was a market-on-close buy, which wasn't particularly large but because the market is relatively illiquid the movements were accentuated. A lot of the stocks that had the big jumps on Friday have given them up today," said David Price, broker at Forsyth Barr.

"That's why the market is so weak today. It's not so much selling as it is an adjustment back to where the market was before that market-on-close buying."

Market-on-close orders are executed at the last traded price for a stock.

"When the volumes are larger they tend to influence the market. It wasn't particularly large volumes but relative to what had turned over, it gave the market a bit of a shunt," Price said.  

Kathmandu Holdings was the worst performer, down 3.4 percent to $3.13, with Synlait Milk dropping 3.2 percent to $10.81 and Sky Network Television falling 2.2 percent to $2.66.

Auckland International Airport declined 2.2 percent to $6.70 and Metlifecare fell 1.9 percent to $6.08.

NZX dropped 0.9 percent to $1.10. The stockmarket operator saw more trades in the first half of 2018 though new listings dropped off significantly, as the company works on its five-year strategy to recapture enthusiasm in the market. Capital raised from initial public offerings and compliance listings plunged to just $20 million in the six months to June 30, from $480 million in the first half of 2017.

Gentrack Group edged down 0.1 percent to $6.89. The stock was halted for most of the day as the company conducted a retail shortfall bookbuild, with the halt lifted at 3.42pm. The bookbuild got a clearing price of $6.84 per share, a 10.5 percent premium from the $6.19 offer price and a 4 cent discount from the theoretical ex-rights price of $6.88, Gentrack said.

Earlier in the day, Gentrack announced it had raised about $25.8 million in a stock offer to retail investors, in the second part of a $90 million capital raise to repay debt used for a recent flurry of acquisitions.

Spark New Zealand was the best performer, up 1.1 percent to $3.83. Skellerup Holdings rose 1 percent to $2.04 and Infratil gained 0.3 percent to $3.425. 

Outside the benchmark index, Pacific Edge surged 19.2 percent to 28 cents. Manchester Management Company, a US-based privately owned fund specialising in biotech and life sciences investments, will take a 1.7 percent stake in the company, reflecting growing international investor interest. It bought the shares for 32 cents each, a 24.75 percent premium over the volume weighted average price for the five day trading period prior to July 27.


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