Infratil sells Tilt Renewables stake for substantial premium. Photo supplied

Infratil lit up the NZ sharemarket yesterday a bit like a fireworks display on Guy Fawkes night.

The company announced the sale of its 65.6 percent shareholding in Tilt Renewables at a significant premium, far bigger than the market had been expecting.

The sale will deliver a $1.93 billion payday for Infratil and represents a handsome premium of more than 99 percent on the $704.1 million carrying value of the Tilt stake, as at September last year.

The transaction values Tilt shares at $7.80 apiece, compared to last Friday’s closing price of $6.48.

Investors who bought the shares as recently as early December at $3.92 when a rival bid from Australian Super to acquire Infratil became public have seen an almost 100 percent return on their investment in less than four months.

Tilt’s Australian assets will be sold to Sydney-based renewables generator PowAR, while its New Zealand assets will be sold to Mercury NZ, which already owns almost 20 percent of Tilt.

Tilt previously demerged from Trustpower and listed on the NZ and Australian stock exchanges in late 2016.

This latest transaction once again highlights the significant premium being attached to renewable energy companies globally as investors seek to increase their exposure to the sector in response to increasing government action on climate change.

Infratil shares closed up 3.6 percent at $7.46; Tilt Renewables shares closed up 17.4 percent at $7.61 and Mercury NZ shares closed up 0.5 percent at $6.03.

The NZX50 gained 1.6 yesterday to close at 12,592, its best day since mid-January.

Air New Zealand’s executive ranks continue to thin 

Another senior member of Air New Zealand’s executive team is set to depart this week, making it the airline’s sixth high profile resignation in less than a year.

Jennifer Sepull has announced she is stepping down from her role as chief digital officer this week less than two years after moving from the US to join the company in 2019.

Other senior staff to depart over the past year include chief commercial and customer officer Cam Wallace, chief strategy networks and alliances officer Nick Judd, chief air operations and people safety officer John Whittaker and chief marketing and customer officer Mike Tod.

Chief financial officer Jeff McDowall has previously indicated he will finish up with the airline once it completes its forthcoming capital raising.

CEO Greg Foran praised Sepull’s leadership during her time in the role saying that “Jennifer and her team have started the journey to build our future digital architecture.”

Air New Zealand shares closed up 0.6 percent at $1.78.

My Food Bag shares continue to disappoint

Shares in recently listed My Food Bag continue to head south, trading as low as $1.57 intraday yesterday before closing at a new low of $1.60.

Trading volumes to date have been reasonably light with just over $50000 worth of shares traded yesterday, indicating the majority of shareholders continue to hold tight hoping for a rebound.

But those who bought in the IPO hoping to realise a quick profit will be disappointed that the shares are yet to trade above their issue price of $1.85.

Based on yesterday’s closing price, investors are so far down around 14 percent on their investment.

Services sector continues to struggle

A new survey out yesterday shows the services sector continues to struggle.

The latest BNZ-BusinessNZ performance of services index came in at 49.1 points for February indicating the sector, which accounts for around 70 percent of the economy, continues to contract .

A reading below 50 indicates contraction and this is the fourth consecutive month the sector has delivered a sub-50 outcome.

However, the February result is an improvement on January’s figure of 48 and it is well above November’s reading at 46.7. The long-term average for this survey is 53.8.

BusinessNZ chief executive Kirk Hope said the last time the index contracted for four consecutive months was in the first half of 2009 as the full impact of the global financial crisis really hit the NZ economy which impacted unemployment.

“The slower return to business-as-usual post-holidays was compounded by the two separate lockdown periods in mid and late February, with Auckland hit the hardest,” Hope said.

GDP data on the December quarter of last year will be released on Thursday.

New licensing regime for financial advice sector comes into force

A new regime for financial advisers came into effect yesterday requiring anyone who gives regulated financial advice to retail clients to either hold, or operate under, a Financial Advice Provider licence.

All providers of financial advice are now subject to the same obligation to place the interests of their clients first and must adhere to a new Code of Conduct.

John Botica, the Financial Markets Authority director of market engagement said the start of the new licensing regime was the culmination of nearly five years’ work aimed at promoting public trust and confidence in the financial advice sector.

“More than 10,200 financial advisers have come into the new licensing system, with more than 1700 transitional licences approved and nearly 1000 authorised bodies. Anyone who is not operating under a transitional Financial Advice Provider licence will now need to apply for a full licence. The transitional period gives advisers two years to complete all the competence, knowledge and skill standards required under the Code of Conduct.”

The FMA said initially it would take an educative approach as the sector beds in its new obligations. However, the wide range of tools under the FMC and FMA Acts apply to all advisers and it said breaches of the new rules could lead to civil, or in some cases criminal, penalties depending on the circumstances.

Youth unemployment in China more than double the national rate

Many young people in China continue to experience difficulty finding a job, highlighting an issue that does not seem to be improving for the world’s fastest growing economy.

The unemployment rate for those aged 16 to 24 was 13.1 percent in February, far above the national urban jobless rate of 5.5 percent, China’s National Bureau of Statistics said yesterday.

The current rate of unemployment for those under 24 is roughly the same as it was during the first quarter last year at the height of the coronavirus outbreak – indicating their job prospects haven’t improved in almost a year.

Economists said based on a contraction in labour measures from monthly government and third-party surveys, companies don’t seem eager to fill vacancies as momentum in the economic recovery slows.

Making matters more challenging for young people, many of them face particularly high competition for jobs.

This year, a record 9.1 million students are expected to enter China’s workforce, surpassing last year’s record of 8.7 million, according to official figures.

Chinese mobile phone maker secures backing from US courts to overturn Trump ban

While you might not have heard of Xiaomi, the Chinese mobile phone maker recently overtook Apple to become the world’s third-biggest smartphone maker, behind Samsung and Huawei

The company’s shares rose as much as 12 percent yesterday in Hong Kong after a US court granted the company a reprieve from Trump-imposed restrictions on American investment.

A US district court judge on Friday granted a temporary halt to the trading ban. He said the US case against Xiaomi was “deeply flawed” and the smartphone maker would probably succeed in its lawsuit to remove its designation as a Chinese military-linked company.

The decision marked the latest instance of a US court blocking sanctions imposed by former president Donald Trump on Chinese companies. A coalition of users of Tencent’s WeChat app succeeded in overturning a ban on the popular messaging app, while short video company ByteDance has also fended off government action.

The Trump administration used a collection of executive orders and at least two separate blacklists maintained by the Pentagon and the commerce department to target Chinese companies.

The restrictions make it difficult for US companies to export technology to them without special permission. Xiaomi sued the US government in January over its inclusion on the blacklists, which in conjunction with a separate Trump executive order would have barred US investors from owning its shares, potentially triggering its delisting from US exchanges and deletion from global benchmark indices.

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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