Saturday, 17 Apr 2021

Market close: NZ sharemarket slides as My Food Bag fails to deliver

My Food Bag failed to deliver a treat to hungry investors but the Government did by taking Auckland out of lockdown, and the New Zealand sharemarket finished the week with minimal damage.

The S&P/NZX 50 Index picked up and erased a half per cent fall after it was announced Auckland was going back to alert level 2 and the rest of the country to level 1 on Sunday.

The index closed at 12,180.25, down 44.25 points or 0.36 per cent, after trading between an intraday low of 12,107.13 and 12,233.57.

There were 59 gainers and 85 decliners over the whole market of 186 stocks on heavy volume of 92.5 million share transactions worth $205.62 million.

It wasn’t the best timing for meal kit company My Food Bag to list on the NZX, finishing its first day at $1.74, down 11c or 5.95 per cent on its initial public offering price of $1.85. It reached an intraday low of $1.65 and there was steady trading in the stock, with 5 million shares worth $8.5m changing hands.

Greg Smith, head of research with Fat Prophets, said My Food Bag was a well-known company and brand but its valuation was fairly full, and the conditions had to be perfect to get off to a flying start.

“There is presently a rotation out of stocks that have benefited well from the Covid pandemic including delivery firms, and My Food Bag is one of them. Also, the rising bond yields are undermining the appeal of high valuation and high-growth stocks,” he said.

The markets, here and overseas, have been unsettled by the rising wholesale interest rates. The Australian S&P/ASX 200 Index was down 0.88 per cent to 6701 points at 5.45pm (NZ time), and overnight on Wall Street the Dow Jones Industrial Average fell 1.11 per cent 30,924.14.

On the local market, the interest rate sensitive energy stocks had another downer. Contact fell 29c or 4.14 per cent to $6.71 on trade worth $21.4m; Meridian was down 36.5c or 6.43 per cent to $5.31; Mercury slipped 14c or 2.28 per cent to $6; Genesis declined 5c to $3.60; Trustpower decreased 15c or 1.82 per cent to $8.09; and Tilt Renewables was down 12c or 1.9 per cent to $6.19.

Skellerup Holdings fell 19c or 4.14 per cent to $4.40; Mainfreight dropped 59c to $68.01; Fletcher Building declined 7c to $6.53; Infratil was down 5c to $7.19; and Seeka decreased 14c or 2.85 per cent to $4.78.

Market leader Fisher and Paykel Healthcare staged a late recovery, closing up 55c or 1.96 per cent to $28.55 on trade worth $22.4m.

Steady performer Ebos Group rose 22c to $28.22; a2 Milk increased 12c to $10.13; Auckland International Airport was up 11c to $7.14; and Port of Tauranga gained 6c to $7.60. ANZ Banking Group climbed 58c to $30.90, having risen more than 25 per cent this year.

The retailers Briscoe Group fell 18c or 3.1 per cent to $5.62, and Hallenstein Glasson was down 11c to $7.28. Seafood company Sanford was up 15c or 3.3 per cent to $4.69, and Precinct Properties gained 2.5c or 2.22 per cent to $1.615.

Dual-listed Evolve Education Group climbed 8c or 6.45 per cent to $1.32 after announcing it was buying 10 childcare centres in Australia, with total capacity for 816 children. The initial payment is $27.13m for operating earnings (ebitda) of $6.93m a year, and a further payment of $5m if ebitda increases by $1.27m for the first 12 months. Evolve has 116 centres in New Zealand and 20 in Australia.

AFT Pharmaceuticals, also dual-listed, surged 24c or 5.78 per cent to $4.39 after signing a licensing agreement with French firm Aguettant for the distribution of its Maxigesic pain relief tablets in eight new European markets, taking the total to 27 including Germany, France, Italy, as well as Britain.

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