Sharemarket lifts as Z Energy surges on takeover talk

Monday, 23 August 2021

The sharemarket gained, as fuel retailer Z Energy surged on the prospect of a takeover by Australia’s Ampol.

The benchmark S&P/NZX 50 Index rose 123.584 points, or 0.96 per cent, to 13,064.07 on Monday.

Z Energy jumped 14 per cent to $3.48 after confirming it had received a bid from Australian fuel retailer Ampol, which owns the Gull chain, at $3.78 per share. Z Energy’s board did not believe the offer was high enough and had given Ampol four weeks to complete due diligence and have the opportunity to raise its offer.

“Long-term shareholders in Z Energy will be pleased to see it ticking upwards, although maybe for some there is still a long way to go to get back to in the money,” said Hamilton Hindin Greene investment adviser Grant Davies.

At the start of last year, Z Energy was trading at $4.45, and five years ago the stock was above $7.

* Sharemarket slips as investors eye the prospect of higher interest rates

* Fisher & Paykel Healthcare 1% gain not enough to push NZX50 into the black

Z Energy has caught the eye of Australian fuel retailer Ampol, which owns Gull.

The prospect of lower interest rates for longer was broadly supporting stocks, Davies said.

The Reserve Bank left the official cash rate at a record low of 0.25 per cent last Wednesday after the news of a community outbreak of the Covid-19 Delta variant. The bank had been preparing to hike rates.

“We are in this perverse environment where, from the sharemarket’s perspective, bad news can be good news, and anything that prolongs lower interest rates is good for the sharemarket in the short term,” Davies said.

“At the moment, that has given us a little bit of a tailwind but obviously we can’t stay at these sorts of rates forever.”

Among those recording strong gains were corporate travel technology company Serko up 11 per cent to $7.95, transport and logistics company Mainfreight up 5 per cent to $90.01, cancer diagnostics company Pacific Edge up 6.3 per cent to $1.35, and media company NZME up 6.9 per cent to 93 cents.

Courier company Freightways lifted 0.1 per cent to $13 after posting a 4.8 per cent increase in profit to $49.6 million in the year to June 30, which Davies said was in line with expectations.

Telecommunications network company Chorus slipped 2.9 per cent to $6.93 after reporting full-year profit slipped 9.6 per cent to $47m.

Pushpay, which provides digital payment services for churches, rose 1.8 per cent to $1.68 after announcing it was buying streaming service Resi Media for US$150m (NZ$215m) to accelerate its growth in the United States.

Sharemarkets rose across Asia on Monday as investor sentiment received a big boost from the rally last week on Wall Street, despite worries about the more contagious coronavirus delta variant not only in the region but across the world.

On Wall Street, the S&P 500 ended the week up 35.87 points, or 0.8 per cent, at 4,441.67. The benchmark index is less than 1 per cent from the all-time high it set on Monday last week.

The Dow Jones Industrial Average added 225.96 points, or 0.7 per cent, to 35,120.08. The Nasdaq composite picked up 172.87 points, or 1.2 per cent, to 14,714.66.

Escalating coronavirus infections across the US and around the globe due to the highly contagious Delta variant have given traders reason to pause with the market near all-time highs.

The US Federal Reserve's annual conference in Jackson Hole, Wyoming, later this week could provide Wall Street with more insight into what the Fed may do about inflation.

– With AP