Sharemarket gains as Infratil hits record high on acquisition plans

On Oct 4, 2021

The sharemarket gained, with infrastructure investor Infratil hitting a record high after announcing it would expand further into specialist healthcare services.

The benchmark S&P/NZX 50 Index advanced 58.122 points, or 0.4 per cent, to 13,337.27 on Monday.

Infratil rose 1.9 per cent to a record $8.24 after announcing it would buy at least half of Auckland Radiology for between $30 million and $60 million.

Auckland Radiology is the largest diagnostic imaging service in the city, and the acquisition complements Infratil’s previous investments in Pacific Radiology and Qscan Group.

“That further extends their reach in the medical area,” said Hamilton Hindin Greene investment adviser Grant Williamson. “It is considered to be a relatively high growth area, the medical sector, so investors are liking that.”

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Overall, it was a relatively quiet day on the market, with mixed trading.

The a2 Milk Company gained 1.5 per cent to $6.70. The stock has shed 57 per cent over the past year and a report in the Australian Financial Review suggested some investors now considered the shares were good value.

The company hit the skids last year when the Covid-19 pandemic closed international borders, shutting off a key route to market for A2 Milk’s infant formula milk powder into China. Chinese buyers also stockpiled at the start of the pandemic, which slowed future sales.

Williamson said there was steady buying in the stock.

“We are seeing some bargain hunting coming into that stock,” he said. “The share price has come back a long way. You are always going to get investors bargain hunting on these depressed share prices.”

Overall, Williamson said it was a relatively quiet day on the market, with mixed trading.

Of the travel stocks, Auckland Airport gained 1.2 per cent to $7.90, and Air New Zealand gained 2.7 per cent to $1.69, while Serko fell 1.2 per cent to $8.15.

Trading in retirement village stocks was mixed. Ryman Healthcare gained 1.6 per cent to $15.25 and Summerset Group edged up 0.3 per cent to $15.20. In contrast, Oceania Healthcare fell 1.3 per cent to $1.48, and Arvida Group slipped 0.5 per cent to $2.12.

Asian markets were mixed on Monday, with Shanghai closed for a National Day holiday.

Hong Kong’s benchmark shed more than 2 per cent after troubled property developer China Evergrande’s shares were suspended from trading.

The company did not say why, but a Chinese financial news service, Cailian, said another major developer was planning to buy Evergrande’s property management unit.

Evergrande is struggling to make payments on tens of billions of dollars worth of debt as it endures a cash crunch brought on by a tightening of Chinese government restrictions on debt-leveraged financing.

Wall Street rebounded on Friday, led…