Passive funds push NZX 50 higher
New Zealand shares bounced back from a losing streak as fund managers who track the S&P/NZX and FTSE Russell indices completed their quarterly portfolio rebalance.
Friday, September 17th 2021, 6:30PM
The S&P/NZX 50 Index rose 155 points, or 1.2%, to 13,234.55. Turnover was elevated at $883 million with an extended session to facilitate the rebalance.
Earlier this month, logistics company Mainfreight hit a record high after FTSE announced it would be included in its global small-cap index, along with travel booking company Serko.
Both stocks saw their share prices pushed higher as active fund managers rushed to buy the stock ahead of today’s rebalance when passive fund managers were forced to buy.
Today, both stocks actually saw their price fall as investors sold their holdings to the passive funds.
Mainfreight fell 0.8% to $91.75, with almost $300m worth of shares changing hands, while Serko declined 0.9% to $7.80 as $17.8m of stock was traded.
Both stocks normally see around 100,000 shares traded each day, but that number was closer to three million today as the passive funds added the companies to their portfolios.
Pushpay Holdings led the index higher, up 5.4% at $1.96 on a volume of 3.2m shares.
The other big winner was Fisher & Paykel Healthcare, which jumped 3.2% to $32.40 as more than $100m worth of shares were traded between active and passive fund managers.
A number of property stocks were added to an index and consequently also saw extremely elevated traded levels.
Argosy Property rose 0.6% to $1.63 with 33m shares traded, Stride Property fell 1.6% to $2.51 on a volume of 29m shares, and Precinct Property was up 0.6% on 11m shares.
NZ Automotive Investments founder Eugene Williams sold 4.2m shares in a private placement to a range of investors for 93 cents per share. William retained a 36% stake.
The car sales company took up a direct listing earlier this year without raising any capital. As a result of today’s transaction, the free float has increased from 8% to 18%.
Shares in the company declined 2.7% to $1.10 when the trading halt lifted.
Residential property developer CDL Investments announced it had been named in a high court judicial review proceeding brought by Winton Property Investments.
The review is about a CDL’s acquisition of land in Havelock North, which Winton is arguing the minister responsible for overseas investment should not have approved.
The company said it was “taking legal advice and will vigorously defend its position” and investors seemed unconcerned, its share climbed 1.3% to $1.155.
Air New Zealand told the market the monthly impact of nationwide travel restrictions was approximately $45m to $55m, including the benefit of any wage subsidies.
The Auckland-only lockdown was approximately $25m to $35m, and the absence of Australian travel was approximately $20 to $25m.
This has resulted in the airline calling on its Crown loan facility, now having drawn down $435m with $1.1b remaining.
Despite this, shares in the airline rose 0.3% to $1.54 today, having declined more than 13% this year.
The NZ dollar slipped below 71 US cents as the US dollar rebounded as a surge in US retail sales drove demand for the world’s base currency.
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