Market close: Vanguard Group reduces key local stocks

The New Zealand sharemarket maintained a steady line – even though one of the world’s biggest fund managers significantly reduced its holdings in key local stocks.

The United States-based Vanguard Group, with US$7 trillion ($10t) in assets under management, produced a flurry of substantial holder notices, and the S&P/NZX 50 Index closed flat at 12,700.50, down 2.47 points or 0.02 per cent.

After reaching an intraday high of 12,776.80 points, the leading index fell late in the afternoon as the Australian market continued to weaken. There were 52 gainers and 89 decliners over the whole New Zealand market of 185 stocks, with 37.7 million shares worth $162.17 million changing hands.

Windfarm specialist Tilt Renewables has now delisted from the market, following completion of its takeover.

Vanguard reported it has cut its substantial holdings of just over 5 per cent to less than 4 per cent in eight stocks – SkyCity Entertainment, Summerset Group Holdings, Spark, Fletcher Building, Kiwi Property, Argosy Property, Fisher and Paykel Healthcare and Contact Energy.

Vanguard also reduced its stake in Chorus from 7.5 per cent to 4.8 per cent, and in a2 Milk from 7 per cent to 4.9 per cent.

Matt Goodson, managing director of Salt Funds Management, said Vanguard may be exiting the New Zealand market.

“Looking at the notices, Vanguard is ceasing to be a substantial holder, and the shareholdings have most probably moved to other passive funds,” he said.

Goodson said the Australian ASX index was down as the rampaging tech sector cooled following the Afterpay takeover bid, and the weakness was reflected in the New Zealand market.

The S&P/ASX 200 Index had fallen 0.29 per cent to 7469.90 points at 6pm NZ time.

At home, market leader Fisher and Paykel Healthcare rose another 44c to $32.84 as the Covid Delta variant continues to spread. Over the past year Fisher and Paykel has ranged from its August 28 high of $37.68 and March 8 low of $27.34.

Other blue chip stocks Auckland International Airport gained 7.5c to $7.215; Chorus increased 4.5c to $6.26; and Ryman Healthcare was up 11c to $13.20. Fellow retirement village operator Summerset Group Holdings fell 13c to $13.17.

Global marketer a2 Milk’s rocky ride continued, down 10c to $6.29 and likewise Port of Tauranga fell 18c or 2.54 per cent to $6.90. Mainfreight came off $1.77 or 2.09 per cent to $83.11, Freightways shed 14c to $12.66; Skellerup Holdings fell 13c or 2.53 per cent to $5.01; and SkyCity was down 4c to $3.19.

Mercury increased 6c to $6.84 after telling the market it has bought Tilt Renewables’ five New Zealand windfarms for nearly $800m, funded from selling its 19.9 per cent shareholding in Tilt and net debt of $189m. There are also development options in Manawatu, Northland, Otago and Southland.

Powering Australian Renewables has taken 100 per cent control of Tilt and is paying Tilt shareholders $8.035 a share for their holdings. It meant Infratil completed the sale of its 65.15 per cent stake in Tilt for $1.9 billion, some of that being used to reduce debt.

Infratil calculated its gain on the Tilt shareholding was $965m and the investment generated an annual rate of return of 35.2 per cent after Tilt was demerged from Trustpower in 2016. Infratil’s operating earnings (ebitdaf) forecast for the 2022 financial year is still $505m-$555m, and its share price was down 2c to $7.30.

Other energy stocks Contact was up 2c to $8.37; and Meridian increased 5c to $5.27.

Chemicals business DGL Group rose 6c or 3.764 per cent to $1.71; Tourism Holdings increased 5c or 2.13 per cent to $2.40; and TIL Logistics gained another 5c or 2.94 per cent to $1.75.

Property stocks were weaker with Investore down 4c or 1.96 per cent to $2; Argosy declining 2c to $2.47; and Stride shedding 2c to $2.47.

New Zealand Rural Land Company was up 3c or 2.8 per cent to $1.10 after reporting unaudited net asset value of $1.33 a share following valuation on its dairy farming assets.

Online personal lender Harmoney slumped 20c or 9.52 per cent to $1.90; and EROAD was down 13c or 1.95 per cent to $6.52.

The Taranaki District Health Board will use Pacific Edge’s Cxbladder products for the detection and management of bladder cancer patients, and Pacific Edge’s share price slipped 2c to $1.21.

Medicinal cannabis firm Cannasouth has raised $4.5m from its share purchase plan and now plans to raise a further $1.5m before September 30 to fund the remaining shareholdings in Midwest Pharmaceutics NZ and Cannasouth Cultivation. Cannasouth’s share price was unchanged at 42c.

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