New Zealand’s S&P/NZX50 index closed at its lowest in more than four months as investors dumped shares of Summerset Group and Oceania Healthcare to participate in the discounted capital raising for Ryman Healthcare.
The NZX50 fell 220.86 points, or 1.7%, to 12,531.72, its lowest close since Oct 2. Across the main board, turnover was $153.8 million.
Summerset led the market lower, sinking 6.3% to $12 and Oceania dropped 5.4% to 70 cents, with investors clearing the decks to participate in the $1 billion capital raising by Ryman to shore up the retirement village operator and developer’s balance sheet.
Trading of Ryman shares was halted at $4.31 to allow the institutional components of its underwritten $313 million placement and $688 million one-for-3.05 accelerated non-renounceable entitlement offering to take place. The shares are being sold at $3.05 each to repay Ryman’s debt and shore up its balance sheet.
Michael Hill International dropped 5.6% to 51 cents after the jewellery retailer shelved its interim dividend to preserve cash, even as first-half earnings came in at the upper end of guidance. The retailer said it’s reviewing its New Zealand business to revive profitability of those stores.
Separately, Statistics New Zealand’s December quarter retail trade survey showed the volume of core retail sales volumes increased in the period, including on a per-capita basis.
“These retail trade figures, and inflation data, suggest that part of this increase in spending has been supported by more retailers offering discounts, which are clearly working to shift stock,” Infometrics economist Brad Olsen said in a note. “Retailers have been running down stock levels over the last year to less elevated levels.”
The kiwi dollar rose to 57.62 US cents at 5pm in Auckland from 57.42 cents at 7am, and little changed from 57.68 cents last week.
Among other retailers, Warehouse Group declined 1% to 98 cents, KMD Brands was unchanged at 40 cents, Hallenstein Glasson Holdings fell 2% to $8.40 and Briscoe Group dropped 3.2% to $4.56.
Unexpected miss
Broadband network firm Chorus dropped 4.8% to $8.50 after reporting first-half earnings of $346 million, less than what analysts were predicting, as the sluggish economy sapped demand for new connections. It lifted its interim dividend to 23 cents as predicted.
Spark New Zealand was unchanged at $2.38 on a volume of 3.2 million shares, halting its plunge on Friday when it downgraded earnings again.
Millennium & Copthorne Hotels New Zealand rose as high as $2.60, ending the day up 4.2% at $2.50 after independent adviser Northington Partners put a value of between $4.40 and $5 per share on the hotel operator, well north of the $2.25 offer by controlling shareholder City Developments Ltd. The independent directors reaffirmed their advice to minority shareholders to reject the offer.
The hotel operator separately reported a 32% increase in its annual operating profit, but didn’t declare a dividend because CDL wouldn’t waive the condition on its takeover offer.
Property developer CDL Investments rose 5.3% to 80 cents after it lifted its annual profit to $15.4 million from $13.5 million a year earlier, and boosted the value of its property portfolio to $422.8 million. It declared a dividend of 3.5 cents per share.
Steel & Tube Holdings rose 2.4% to 85 cents after the steel products maker bought the Perry Group’s galvanising businesses for $43.5 million in cash and shares, while reporting a slump in first-half earnings in the tough economy environment.
ANZ Bank Group posted the biggest gain on the NZX50, up 1.5% to $32.48, as the major Australian banks recovered from last week’s selloff. Westpac Banking Corp advanced 0.7% to $34.48, while Heartland Group Holdings increased 1.2% to 88 cents.
Reporting by Paul McBeth. Image from Diana Parkhouse on Unsplash.
