MARKET CLOSE: Fonterra Fund produces historic stag – up 26%

Article – BusinessDesk

MARKET CLOSE: Fonterra Fund produces historic stag – up 26%
on day one

By Paul McBeth

Nov. 30 (BusinessDesk) – The
historic listing of Fonterra units on the NZX caused mammoth
volumes by New Zealand market standards and the biggest
listing day stag that investors have seen for years.

The
non-voting units, which launched at midday today, surged as
high as $6.95, a 26 percent stag before closing at $6.85
from an offer price of $5.50. The fund’s turnover was $179.8
million as investors scrambled to get a slice of dairy
exporter Fonterra Cooperative Group’s dividend
stream.

Turnover in the NZX50 was lower, but substantial,
at $175.2 million.

The most comparable float was the
December 2011 listing of TradeMe, which rose 6.9 percent on
its first day, and was up about 10 percent on its issue
price by the end of its first week’s trading, said Andrew
Bascand, at Harbour Asset Management.

The fund attracted
more trading than the rest of the NZX50 put together and is
likely to have been attractive to foreign investors, who
took 42 percent of the initial issue of units after
Tuesday’s book-build.

“Before that, you would have to back
a long way” for a bigger stag, said Bascand.

At month’s
end, New Zealand shares rose 2.3 percent in November.

On
the day, the NZX 50 index rose 33.31 points, or 0.8 percent,
to 4050.08. Within the index 32 stocks gained, eight
declined and 10 were unchanged. Turnover was $175.2 million.

“The excitement today has been around the Fonterra
Shareholders’ Fund – that’s been a stunning debut,” said
Shane Solly, head of equities at Mint Asset Management.
“It’s the first time you’ve really been able to get access
to the dairy industry, and is quite unique.”

Xero led
gainers on the top 50 index, climbing 6.8 percent to $6.88
after US investors Valar Ventures and Matrix Capital
Management forked over $82 million to build their respective
stakes in the local cloud accounting software provider, with
$60 million of that fresh capital.

“The American
investors appear to have a background in this type of tech
sector – they’re quite well-regarded and it’s good growth
capital,” Solly said.

Fletcher Building, the biggest
listed company on the exchange, rose 1.4 percent to $7.92
after government figures showed building consents were 32
percent higher in October than the same month a year
earlier.

Solly said New Zealand’s market has outperformed
on the month, with recent capital returns by pay-TV operator
Sky Network Television and insurer Tower giving heart to
investors. Sky shares rose 1 percent to $5.27 and Tower fell
1 percent to $1.93.

Heartland New Zealand climbed 2.9
percent to 70 cents after the lender with aspirations to be
a bank flagged flat annual profit for 2013 and announced a
special dividend of 1.5 cents per share.

Infrastructure
investor Infratil rose 2.9 percent to $2.325, specialty
resins maker Nuplex Industries advanced 2.8 percent to
$2.96, and transport logistics firm Mainfreight rose 2.3
percent to $11.20.

Warehouse was the biggest decliner,
falling 3.2 percent to $3.05, while Telecom shed 1.7 percent
to $2.31 and Air New Zealand dropped 1.2 percent to $1.28.

Vector declined 0.8 percent to $2.62 after the Commerce
Commission set its default price-quality path pricing for 16
electricity distributers, and said the Auckland monopoly
lines company was wrong in its comparisons with Australian
peers.

(BusinessDesk)

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