Yovich & Co. Market Update - 15 March 2021

Mar 15, 2021 | Commentary

15 March 2021

Market Update 20210315

In summary, the NZX50G had 20 companies on the downside, 2 remained unchanged and 28 companies were on the upside. The broad sale on shares seems to be over with most indices we follow increasing. The US markets are seeing a recovery as President elect Joe Biden has signed the $1.9 trillion coronavirus relief package and the vaccine rollout expands. There is concern that the relief package will boost inflation, the Federal Reserve will be keeping an eye on this. The BNZ Manufacturing Snapshot shows that the Performance of Manufacturing Index (PMI) slipped back to the average of 53.4. This was after a strong January (58.0) and an unusually weak December (48.3). Supply rather than demand problems dominated, with frequent references to supply chains, shipping, freight, costs, and difficulties in finding suitable staff being the negative factors. Stay tuned to the news this week with three important announcements: The first on Tuesday night is the Global Dairy Auction (will it still hold strong), secondly the Federal Reserve will make their announcement (Thursday morning NZT) unlikely any change, but will be an interesting watch given market developments recently, third on the list is NZD’s Q4 GDP at 10.45am Thursday, has it reduced from the Q3 GDP results or creeped higher?

Biggest Movers 20210315

Investment News

Sheffield Resources

Has received the A$130.1m payment confirming the joint venture with Yansteel owning a 50% interest in Kimberley Mineral Sands (KMS). KMS will complete a final bankable feasibility study for Thunderbird ahead of concluding project finance arrangements over the coming months, with an expected final investment decision (“FID”) during 2021. Yansteel and KMS have entered into a binding life of mine take or pay offtake agreement for 100% of the LTR ilmenite from Stage 1 at market price. Yansteel has a first right of refusal to purchase ilmenite from later stages. Sheffield’s share price has increased 8.25% (at time of writing). 

Current Share Price: 44 cents

Tilt Renewables

Has entered into a Scheme Implementation Agreement (SIA) with Powering Australian Renewables (PowAR) and Mercury NZ Limited (Mercury) (together, the Consortium) under which it is proposed that PowAR will effectively acquire Tilt Renewables’ Australian business and Mercury will acquire Tilt Renewables’ New Zealand business. This transaction will be implemented by way of Scheme of Arrangement (the Scheme) where Tilt Renewables shareholders will receive NZ$7.80 per share in cash. Tilt Renewables is preparing a Scheme Booklet which will contain information relating to the Scheme, including the reasons for the Non‐Conflicted Directors’ unanimous recommendation and details of the Scheme Meeting. The Scheme Booklet will also include an Independent Adviser’s Report, prepared in accordance with guidance of the Takeovers Panel. The process to implement the Scheme will include a Scheme Meeting where Tilt Renewables shareholders will be given the opportunity to vote on the Scheme. It is expected to take approximately five months for the Scheme to be implemented. Tilt Renewables’ largest shareholder, Infratil Limited, has entered a Voting Deed in respect of its 65.5% shareholding under which it has agreed to vote in favour of the Scheme.

Current Share Price: $7.64, Takeover Price: $7.80.

Contact Energy

Is pleased to announce that its non-underwritten NZ$75m retail offer has closed oversubscribed, with a total of NZ$230m received, 18,667 shareholders applied with an average application size of approximately NZ$12,300. Due to over subscription the offer will be scaled, the strike price of the retail offer was NZ$6.74. Settlement of the retail offer was 12 March 2021.

Current Share Price: $7.22, Gross Dividend Yield: 4.96%, Target Price: $7.86.

Kiwi Property Group

Increased its 2021 financial year Adjusted funds from operations (AFFO) earnings guidance to 5.50 – 5.60 cents per share, up from the 4.90 – 5.15 cents per share range forecast at the half-year announcement. The revised guidance reflects stronger than anticipated trading conditions, with Kiwi Property’s retailers performing ahead of expectations, despite COVID-19 related disruptions. As a result, leasing outcomes and turnover rent have exceeded forecast, while rental abatements and doubtful debt allowances are less than anticipated. Kiwi Property’s full year results to 31 March 2021 are scheduled to be announced on 24 May 2021.

Current Share Price: $1.23, Gross Dividend Yield: 3.97%, Target Price: $1.29.

Mercury Energy

Is offering up to $200m of 5.5-year (maturing 29 September 2026) unsecured, unsubordinated fixed rate green bonds, the bond carries an S&P Global Rating of BBB+. The rate set date is 19 March, the indicative issue margin is 0.85% to 1% above the 5-year swap rate 1.18% (at time of writing). The offer open 15 March and is expected to close 19 March 2021, issue dated expected 29 March 2021. The proceeds of this offer are intended to be earmarked to finance or refinance new or existing projects and expenditures relating to renewable energy and other eligible projects.

Current Share Price: $5.99, Gross Dividend Yield: 2.84%, Target Price: $5.48.

 

Upcoming Dividend payments for NZ stocks

Upcoming Dividend Payments 20210315

 

 

 

 

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Nathanael McDonald



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