Another possible bidder emerges for Infratil
New 191-room hotel for Auckland set to open in 2023
Competition heats up in China’s emerging EV sector
Don’t bet on Bitcoin rebound for now

The latest Covid-19 community case in Northland had investors on edge yesterday, though news of Australia’s 72-hour border closure with New Zealand was announced after the local market had closed.

As a result of the latest outbreak it seems likely Australia’s one-way travel bubble will be suspended beyond the current three days and trans-Tasman passengers will be required to enter mandatory hotel quarantine for up to 14 days on arrival in Australia as was the case previously.

Shares in Auckland International Airport (AIA) and Air New Zealand both fell shortly after the open, though AIA shares subsequently rallied later in the day to close up almost 2 percent at $7.50. Air NZ shares ended the day down 3.5 percent at $1.65, while SkyCity shares were also weaker, closing down 1.3 percent at $3.05.

Auckland Airport outlined the continuing impact Covid-19 is having on its business after releasing passenger volumes for November and preview data for December.

The airport had almost 70 percent fewer passengers through its terminals in November last year compared with the same period in 2019. International passengers, excluding those transiting, dropped 97.2 percent year-on-year.

Unsurprisingly, December is looking equally as bad, the airport said, with international arrivals down 97.3 percent on the same period in 2019.

For the 2020 financial year Auckland Airport recorded an after-tax profit of $193.9 million, down 63 percent.

The company will report its results for the half year to December on February 18.

Another possible bidder emerges for Infratil

Shares in diversified investment company Infratil gained a further 2.7 percent yesterday, closing at an all-time high of $7.58, after reports out of Australia emerged that another potential suitor, IFM Investors, was mulling a possible bid for the business.

In early December, AustralianSuper made an unsolicited cash and share offer of $7.43 to buy Infratil, a more than $1.50 premium to its price at the time.

While major shareholder ACC indicated it would be supportive of a sale, it’s understood Infratil directors are unmoved by the offer.

The loss of Infratil would be significant for New Zealand’s already thin capital markets, given the size and diversity of its investment portfolio, with its 3.9 percent weighting within the benchmark NZX50.

Infratil shares have now gained more than 50 percent since late September.

New 191-room hotel for Auckland set to open in 2023

Singapore’s Hotel Grand Central group has announced plans to build a new, luxury 191-room hotel in central Auckland, after gaining consent to demolish two existing buildings on its 1,000 square metre site in Wellesley Street.

The 12-level Grand Chancellor branded hotel will be located directly across the road from the International Convention Centre and will be the company’s first new build in New Zealand.

HGC currently operates two hotels here — the James Cook in Wellington and the 65-room Grand Chancellor on Hobson St, Auckland — with another eight in Australia. Its former South Island property in Christchurch was demolished in early 2012 after incurring significant damage in the city’s 2011 earthquake.

Demolition work is expected to start next month with construction of the new hotel likely to be completed by mid-2023.

The new hotel will feature guest rooms across 10 floors, a ground floor restaurant and an 11th-floor gym on a combined 9,184 sqm of floor area, though it will not offer parking facilities.

Competition heats up in China’s emerging EV sector

Shares of the electric vehicle unit of Chinese property giant Evergrande surged as much as 67 percent in Hong Kong yesterday following the completion of a successful share sale.

China Evergrande New Energy Vehicle Group hit an all-time-high of HK$50 before closing at $45.35.

The company earlier issued 952.38 million shares to six investors at a price of $27.30 and raised net proceeds of $26 billion (NZ$4.72 billion).

The funding is yet another sign China’s electric car market is accelerating rapidly (pun intended!) and Evergrande could pose a challenge to Tesla as well as domestic rivals such as Nio and Xpeng Motors.

Last year, Evergrande showed off six new electric vehicles under a brand called Hengchi, with the hope of starting production this year. To date, the company is yet to sell a single car.

In September, the company raised around HK$4 billion through the sale of shares to investors including Chinese internet giant Tencent and ride-hailing service Didi.

China’s electric car companies have been aggressively raising capital to ramp up production and take a lead in the competitive market.

Xpeng Motors raised US$1.5 billion in an initial public offering in the US last year.

This month, BYD — the Chinese electric carmaker backed by American billionaire Warren Buffett — said it raised HK$29.9 billion through the issuance of new shares.

Don’t bet on Bitcoin rebound for now

Fans of Bitcoin expecting the surging cryptocurrency to bounce back above the US$40,000 level face a major headwind due to faltering demand for the biggest fund tracking the digital asset, according to US investment bank JPMorgan Chase.

The pace of flows into the $20 billion Grayscale Bitcoin Trust “appears to have peaked” based on four-week rolling averages according to the bank’s strategists. The fund declined 22 percent over the past two weeks outpacing a 17 percent drop in Bitcoin in the same period.

Market watchers warn there is a risk that momentum traders will continue to unwind Bitcoin futures positions in the near term as the selling feeds on itself.

Bitcoin’s red-hot rally lost momentum after the largest cryptocurrency reached a peak of almost $42,000 on January 8. Proponents argue institutional interest has helped bolster Bitcoin’s use as a hedge against dollar weakness and inflation, while sceptics maintain the latest surge is yet another speculative bubble, akin to the 2017 mania that preceded a rapid collapse.

JP Morgan believes the near-term balance of risks is still skewed to the downside, though for those who got in early enough the digital coin is still sitting on a gain of almost 270 percent over the past year, despite shedding around $10,000 from this month’s all-time high.

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.

Leave a comment