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DGL Group shares slumped amid fallout from CEO Simon Henry’s comments about Nadia Lim. Photo / Supplied
Founder Simon Henry’s personal holding in DGL Group has plummeted nearly $140 million in five days as his company and the New Zealand sharemarket, in correction territory, took another dive.
The S&P/NZX 50 Index began
falling after its counterpart ASX 200 Index opened weak. The NZX closed at a near two-year low of 11,381.7, down 227.67 points or 1.96 per cent after. It was the biggest single day fall in two months.
There were 116 decliners and 28 gainers over the whole market on volume of 54.26 million share transactions worth $152.92m.
The S&P/ASX 200 Index had fallen 1.36 per cent to 7107.3 points at 5.40pm NZ time, after the United States indices were weak again over the weekend.
Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said the local market has a similar feel to April/May in 2020 (after Covid first struck) but it is a slower burn.
“Pessimism is still elevated with the same themes of inflation, rising interest rates and Ukraine war and there may be some downside to come. But the markets can’t keep going down forever and stocks are starting to become over-sold.”
Transtasman chemicals business DGL Group fell 57c or 14.81 per cent to $3.28, after sitting at $4.15 last Wednesday when Henry’s comments about My Food Bag and Nadia Lim became public.
Henry has a 57 per cent stake with 150.9m shares in DGL and in the last three trading days the worth of his shareholding has fallen from around $664m to $528m – a drop of some $136m. Since listing in May last year DGL’s share price reached a high of $4.50 last month when Henry’s holding would have been worth about $720m.
The NZ dollar fell to its second lowest level against the American greenback since 2008 after Fonterra reduced its farmgate milk price forecast from $9.60 to $9.30 per kilogram of milk solids. The NZ dollar was trading down one per cent at US63.41 (at 5.45 pm NZ time).
Sullivan said the milk price forecast was cut from a record high because of a drop-off in demand but there is still plenty of money flying around the dairy sector.
Rural services firm PGG Wrightson is benefitting, rising 20c or 4.93 per cent to $4.286 and heading towards its all-time high of $4.81 set on August 27, 2008.
Fonterra Shareholders’ Fund was down 4c to $2.80, and a2 Milk can’t catch a trick, falling 26c or 5.57 per cent to a new low of $4.41.
Market leader Fisher and Paykel Healthcare declined 45c or 2.05 per cent to $21.50; Auckland International Airport fell 29c or 3.79 per cent to $7.36; Mainfreight shed $3.29 or 4.1 per cent to $77; Contact Energy was down 26c or 3.31 per cent to $7.59; and Air New Zealand decreased 3c or 3.77 per cent to 76.5c.
Freightways fell 56c or 4.74 per cent to $11.625 after telling the market that Express Package volumes were down 2 per cent over the past two months because of the Omicron wave and associated staff shortages. Some 1000 or 25 per cent of the workforce contracted the virus and had to isolate on full pay. Freightways expects the Omicron impact on earnings for the second half to be $5m-$7m.
SkyCity Entertainment declined 8c or 2.77 per cent to $2.81; Tourism Holdings was down 6c or 2.14 per cent to $2.75; Vista Group fell 10c or 5.38 per cent to $1.76; Move Logistics shed 8c or 6.25 per cent to $1.20; and Pacific Edge decreased 4c or 4.55 per cent to 84c.
Retailers KMD Brands was down 4c or 3.03 per cent to $1.28; Michael Hill International also declined 4c or 3.25 per cent to $1.19; and Briscoe Group was up 12c or 2.08 per cent to $5.90. Comvita decreased 10c or 3.03 per cent to $3.20.
Oceania Healthcare gained 2c or 2.06 per cent to 99c after announcing it is buying two retirement villages Remuera Rise and Bream Bay in Ruakaka near Whangarei for $57m, adding 153 units.
Oceania, which has increased its lending limits from $350m to $500m, is also buying 6.7ha of land adjacent to Bream Bay Village for a development comprising 124 villas.
Fellow retirement village operators Ryman Healthcare fell 51c or 5.78 per cent to $8.31, and Summerset Group Holdings declined 33c or 2.99 per cent to $10.70.
Westpac Banking Corporation was up 84c or 3.2 per cent to $27.10 after reporting a 63 per cent increase in net profit to $3.28 billion and 10 per cent in cost reductions for the first half of the 2022 financial year compared to the second half of 2021. , which has reduced staff numbers by 4000, is paying an interim dividend of 61c a share on June 24.