Shares in ‘green’ company highly sought after, green light for Metlifecare takeover

As expected, medicinal cannabis firm Rua Bioscience has advised it closed its initial public offering on Friday “well oversubscribed.” Some retail investors have reported receiving only around a quarter of the shares they applied for, demonstrating the popularity of the offering.

Having raised $20 million in the offering, under the terms of the priority offer 10 million shares were available at 50 cents a share to East Coast, Tairāwhiti residents, existing shareholders in Waiapu Investments and others associated with business.

Rua will have 140 million shares issued post-offer, giving the company an implied market capitalisation of $70 million.

It will be hoping to emulate the success of fellow NZX-listed medicinal company Cannasouth. Its shares climbed 3.4 percent Monday to 92 cents, giving it a market cap of $112 million.

Founded in 2016 as a subsidiary of Hikurangi Enterprises, Rua Bioscience said it had invested $6 million to date for its 8,000 square metre cultivation centre in Ruatoria, and into a cannabidiol extraction and manufacturing unit in Gisborne.

Trading in the stock is expected to begin this Thursday.

Takeovers Panel gives Metlifecare green light to be acquired

The Takeovers Panel has advised Metlifecare it will provide the High Court with a “no objection” statement to the company being taken over by Sweden-based EQT.

The panel had delayed providing the statement while it considered the objection lodged with the court by shareholder Craig Priscott, who owns just 1,000 shares, that the company had provided out of date information to shareholders ahead of the vote on the acquisition proposal.

The court hearing will be held today having been postponed from last Thursday.

If the court issues final orders this week, Metlifcare believes the scheme should be finally implemented in the first week of November.

Metlifecare shareholders voted in favour of the $6 per share, or $1.28 billion, takeover via a scheme of arrangement on October 2.

The scheme has the backing of the company’s largest shareholder, the New Zealand Superannuation Fund, which has a 19.8 percent holding.

Services index just manages to stay positive in September

The BNZ-BusinessNZ Performance of Services Index (PSI) saw a slight expansion last month, just managing to eke out a small gain into positive territory at 50.3, which was up 3.1 points from August.

BNZ senior economist Doug Steel said the result indicated the services sector remained under pressure.

“September’s 50.3 reading is still a subdued result, even if it is back on the right side of 50 following August’s dip to 47.2 when tighter (Covid-19) restrictions applied.”

Steel said Auckland’s move back to Level 1 earlier in the month would likely benefit the index next month.

The PSI employment index also remained relatively weak, reflecting the strain the sector has been under.

September’s reading came in at 48.7 only marginally better than August’s 47.3. It is the seventh consecutive month below 50, indicating service sector job losses continue.

The survey, however, combined with last week’s PMI, continues to show a rebound in Q3 GDP from the significant decline in Q2.

The BNZ-BusinessNZ Performance of Manufacturing Index (PMI) lifted to 54.0 in September from 51.0 in August.

No more over-the-counter foreign currency transactions for ANZ customers

The days of going to the bank to pick up your foreign exchange before jetting off overseas are fast coming to an end with ANZ becoming the latest bank to announce it will no longer offer over the counter foreign exchange cash services from November 14.

The bank said it stopped accepting foreign exchange cash transactions from non-ANZ customers last month. Its latest announcement follows an increasing trend by banks to discontinue foreign exchange cash services.

In an update yesterday, ANZ said customers are already well served by a variety of other options including using debit or credit card to make foreign cash withdrawals at overseas ATMs, using pre-paid foreign currency travel cards and using specialist foreign currency exchange providers either at airports or local destinations.

The bank said Foreign Currency Accounts, International Money Transfers, and depositing foreign cheques are not affected by the announcement.

China’s economic recovery accelerating

China’s economic recovery continues to gather pace as the country digs its way out of the turmoil caused by the coronavirus pandemic.

The world’s second largest economy expanded 4.9 percent in the July-to-September quarter compared to a year ago, according to government statistics released yesterday.

The pace was quicker than the 3.2 percent increase that China recorded in the second quarter, when it managed to avoid the pandemic-fuelled recession that has gripped much of the globe. But the growth was also slightly weaker than the 5.2 percent increase analysts had forecast.

As much of the world continues to struggle with the virus, China’s recovery has been relatively quick. The country enforced stringent lockdown and population tracking policies intended to contain the virus, and set aside hundreds of billions of dollars for major infrastructure projects to fuel economic growth.

The positive momentum through the past six months has also helped China’s economy recover all of the output it lost after a historically weak first quarter. GDP grew a cumulative 0.7% through the first nine months of 2020, Monday’s data showed.

Yi Gang, the governor of the People’s Bank of China said he remained optimistic about the country’s recovery.

“The Chinese economy remains resilient with great potential. Continued recovery is anticipated, which will benefit the global recovery.”

Yi said he expects China’s economy to grow around 2% this year.

British Prime Minister Boris Johnson facing an expensive choice

With Britain already facing a tough 2021 as the country battles the twin shocks of coronavirus and Brexit, failing to secure an agreement with the UK’s biggest export market would further amplify the country’s pain.

Walking away empty-handed — which Johnson threatened to do last week — would create disruptions to trade when the transition period ends later this year, potentially shaving more than £19 billion (NZ$37 billion) off the UK economy according to new estimates from the Institute for Fiscal Studies. That would put the country even further behind on its efforts to recover from the historic shock triggered by the pandemic.

“The combination of Covid-19 and the exit from the EU single market makes the UK outlook exceptionally uncertain,” Laurence Boone, chief economist at the OECD, said in a report this week.

“Actions taken to address the pandemic and decisions made on future trading relationships will have a lasting impact on the United Kingdom’s economic trajectory for years to come” he said.

The clock is ticking for the UK and the European Union to come to terms, with Britain set to lose its favourable trading status with the bloc at the end of December.

The confusion over where Brexit goes next couldn’t come at a worse time for the United Kingdom with its economy forecast to contract by 9.4 percent this year. That would be the largest drop since 1921, according to data from the Bank of England.

Singapore super penthouse sells for 15 percent less than its purchase price a year ago

Signs that Singapore’s property market is cooling have emerged after British billionaire James Dyson, the inventor of the bagless-cordless vacuum cleaner, and his wife sold their luxurious three-storey Singapore penthouse for 15 percent below their purchase price of $74 million Singapore dollars (NZ$82 million) just a year ago.

Perched atop Singapore’s tallest building, the Tanjong Pagar Centre, the five-bedroom “super penthouse” comes equipped with all the usual trimmings, plus a 600-bottle wine cellar.

Singapore’s Business Times newspaper, which first reported the sale, said an offer of SG$62 million was accepted for the penthouse, a drop of more than 15 percent from Dysons’ purchase price just under 12 months ago.

The apartment, which also includes a pool, jacuzzi, and a private garden with city views, was once valued at SG$100 million, making it the city-state’s most expensive penthouse.

Dyson moved his company’s head office to Singapore from Britain to be closer to its fastest-growing markets. Last year, he scrapped plans to build an electric car in Singapore as not being commercially viable.

Andrew Patterson is Newsroom's Markets Editor and has worked for decades as a financial journalist, radio presenter and editor with Australia's ABC, Radio Live and NBR.

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