Market close: Travel stocks surge on transtasman bubble announcement

Further selling in Contact Energy and Meridian on the New Zealand sharemarket outweighed sharp gains in stocks benefiting from the introduction of a transtasman travel bubble.

There was heavy trading in the leading energy renewable stocks as the offshore exchange trade funds rebalance their weightings in the S&P Global Clean Energy Index.

This resulted in the S&P/NZX 50 Index falling 87.82 points or 0.7 per cent to 12,400.48 on volume of 97.6 million share transactions worth $207.54 million. There were 74 gainers and 63 decliners over the whole market.

Contact fell 29c or 4.1 per cent to $6.79 with 7.3m of its shares worth $49.8m changing hands, and Meridian was down 33c or 5.91 per cent to $5.25 with 9.1m shares worth $47.7m being traded.

Contact told the market it has bought all the shares in Western Energy Services, a specialist geothermal well service operator based in Taupō.

Confirmation that quarantine-free travel between New Zealand and Australia will begin in two weeks on April 19 boosted travel and tourism stocks. Prime Minister Jacinda Ardern said the bubble was the start of a new chapter in the Covid response and recovery.

Air New Zealand, which will be flying the Tasman more regularly, climbed 10c or 5.8 per cent to $1.825; Auckland International Airport was also up 10c to $7.75; Tourism Holdings surged 15c or 5.84 per cent to $2.72; Millennium & Copthorne Hotels New Zealand increased 17c or 7.46 per cent to $2.45; and online travel provider Serko gained 4c to $6.99.

Millennium told the market it is pulling out of the deal to buy central Whangarei land from the local district council.

Greg Smith, head of research for Fat Prophets, said there had been a fair bit of anticipation about the transtasman travel bubble. The governments have got their protocols in place, and the bubble will provide a material boost to the travel and tourism stocks.

“There will be a lot of pent-up demand with people wanting to catch up with friends and families, and the winter ski season is coming up. This will be good for tourism industry overall,” said Smith.

Fletcher Building caught the transtasman spirit, rising 20c or 2.86 per cent to $7.19, while Skellerup Holdings increased 10c or 2.35 per cent to $4.36; and cinema software firm Vista Group gained 5c or 2.36 per cent to $2.17.

Amongst other energy stocks, Mercury fell 25c or 2.36 per cent to $6.25; Trustpower – which may be soon selling its retail division – was down 5c to $8.30; and Genesis slipped 2.5c to $3.47.

Market leader Fisher and Paykel Healthcare declined 40c to $31.33, and Mainfreight was down $1.39 or 2.02 per cent to $67.50. Restaurant Brands fell 21c or 1.6 per cent to $12.91, Pushpay Holdings declined 4c or 1.95 per cent to $2.01; and Delegat Group shed 20c to $14.40.

Apple exporter Scales Corporation, which is bidding for Villa Maria Winery, fell 10c or 2.15 per cent to $4.55; personal lender Harmoney was down 8c or 3.56 per cent to $2.17; and AFT Pharmaceuticals declined 8c or 1.83 per cent to $4.30.

Telecommunications network company Chorus slumped 19c or 2.73 per cent to $6.76 after effectively downgrading its earnings. Chorus told the market it has lowered its revenue estimate for regulated fibre services from $715m-$755m to $680m-$710m a year to December 2024.

Synlait Milk recovered another 9c or 2.59 per cent to $3.56; while a2 Milk was down 6c to $8.36.

Transport software firm EROAD continued its strong run, rising 17c or 3.82 per cent to $4.62; manuka honey producer Comvita was up 7c or 2.24 per cent to $3.19; kiwifruit grower and packer Seeka increased 17c or 3.48 per cent to $5.06; Scott Technology gained 8c or 3.98 per cent to $2.09; and Accordant Group was up 6c or 4.51 per cent to $1.39.

Meal kit company My Food Bag gained 1c to $1.61, and broker Jarden has set a target price of $1.90, saying the market price offered an attractive entry point with limited downside risk.

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