All the hiss and bubble has gone out of A2 Milk's shares. Photo: A2 Milk

Business & Investing: Another institutional investor in A2 Milk lowers its holding, Plus Laybuy shares have fallen 40 percent since last year’s listing

Shares in A2 Milk continued their downward slide yesterday, falling for a fifth day and closing at a four year low of $7.46, down 5.6 percent.

The shares have now fallen 17 percent in just over a week prompting questions as to whether NZ RegCo should have already initiated a price inquiry.

In a statement, CEO Joost van Amelsfort said while it had noted the recent decline in the A2 Milk share price, it considered this attributable to market sentiment following recent earnings downgrades.

“The speculation of further possible downgrades, as has been noted by some analysts, as well as possible changes to the treatment of A2 Milk in the MSCI index rebalance is also considered to be a likely factor influencing recent price movements” he said.

“NZ RegCo notes that the fact an Issuer’s share price falling is not in itself grounds requiring disclosure. Issuers’ disclosure obligations are a function of the continuous disclosure and periodic disclosure obligations that apply under the NZX Listing Rules.”

A2 Milk is yet to provide a trading update ahead of its end of year results in June and has not made any statements to the market since late February.

A significant shareholder notice yesterday from Mitsubishi UFJ Financial Group – a large Japanese financial services company – advised it had reduced its stake in the company to 7.5 percent from more than 8.5 percent. Last week, both Pendal Group and Morgan Stanley advised the market they were no longer significant shareholders.

Westpac expect its first-half earnings and net profit to fall

Australian banking group Westpac said yesterday that more “notable items” of A$282 million (NZ$304m) will reduce its first-half cash earnings and statutory net profit.

The items include a further A$220m of customer refunds and associated costs and litigation provisions, and a A$115m write-down of capitalised software and other intangibles.

They also include A$56m of costs associated with ending its relationship with Australian financial services provider IOOF, A$84m write-down of goodwill related to Lenders Mortgage Insurance and a A$113m loss on the sale of Westpac Pacific.

The bank said the losses were partly offset by a net A$288m gain from revaluing its investment in Coinbase Inc, the American cryptocurrency exchange platform, and A$18m from selling its holding in buy now, pay later platform Zip Co.

Westpac had already announced A$212m of the write-downs in its first quarter report.

Its NZ listed shares closed down 0.3 percent at $26.91.

ASB Bank set to soak up cash sitting on the sidelines

ASB Bank has announced it will sell up to $100 million of five-year notes later this month with the ability to accept unlimited over-subscriptions at the bank’s discretion.

The offer is open to both retail and institutional investors in New Zealand and to “certain offshore institutional investors” with a minimum application amount of $5,000.

Halter completes $32 million funding round but commercial launch delayed

Innovative agri-tech company Halter has raised $32 million in its latest funding round that will primarily be used to drive new hires at the company as it looks to roll out its product domestically, and then expand overseas.

The days of dairy farmers rounding up cows for milking may soon be a thing of the past, replaced instead by Halter’s smart collar tech that uses sounds and vibrations to herd cows using a mobile app. The company had planned to launch the product commercially this year, but ongoing delays have meant the roll out to the NZ farming community has been slower than anticipated.

The series B round was led by Blackbird Ventures, with investment coming from existing backers including Rocket Lab’s Peter Beck, Icehouse Ventures, and US-based venture capital company Data Collective.

CEO Craig Piggott blamed the lag on the company’s ability to hire the right people.

Halter is aiming to fill 115 new roles by the end of the year, mostly for its engineering and product teams.

Laybuy shares fall more than 40 percent since listing last year

Shares in NZ-based buy now, pay later platform Laybuy have fallen more than 40 percent since listing on the ASX in September last year.

The shares, which were issued at A$1.41 and traded as high as A$2.21 last year shortly after listing, closed yesterday at A80c, down 43 percent on their issue price.

The slumping share price has also seen Laybuy’s market capitalisation fall from A$246 million at the time of listing to A$146 million, based on yesterday’s closing share price.

Laybuy allows customers to receive their purchases immediately but spread the payments over six instalments, interest free.

The sector has become extremely competitive with Afterpay the dominant provider in Australia.

Laybuy said at the time of its listing the IPO proceeds would be used to expand its presence in the UK, which is the company’s largest revenue source, accounting for NZ$296 million in annualised gross merchandise value (GMV) for FY21. The Australia/New Zealand region closely follows with NZ$293 million in annualised GMV for the current financial year.

Some of the shine has come off the BNPL sector after the UK Financial Conduct Authority said last year there was an urgent case for protecting consumers who were being put at risk by BNPL operators. In addition, a recent Australian Securities and Investments Commission report showed one in five people using BNPL services missed payments, and half of users aged 18 to 29 had cut back on essential items in order to make repayments.

Tesla earns record profit but shareholders unmoved

Despite earning a record profit in the first quarter of US$438 million, improving its manufacturing output and even making money off its Bitcoin purchase, Tesla shareholders were largely unmoved by the company’s latest quarterly result.

Shares of the EV maker fell as much as 3.3 percent before the start of regular trading, a sign of the elevated expectations Tesla shareholders maintain after an eightfold gain in the stock last year. Analysts expressed disappointment the company didn’t offer a specific estimate for vehicle deliveries in 2021.

Chief Executive Officer Elon Musk is pushing to ramp up production and maintain Tesla’s dominance in the electric vehicle market, but competitors are also moving in aggressively. Musk said on Monday demand is higher than it’s ever been.

Tesla reiterated that it expects 50 percent annual growth in deliveries “over a multi-year horizon” implying deliveries of around 750,000 cars this year.

The unchanged guidance disappointed some analysts and investors who hoped for more detail after a blowout first-quarter showing. Tesla produced almost 185,000 cars worldwide in the first three months of this year, despite a shortfall in supplies of semiconductors. It delivered almost half a million cars in 2020.

US finally beginning to turn the corner on Covid

The US might finally be turning the corner on Covid, though much later than former President Donald Trump predicted around the middle of last year.

White House chief medical advisor Dr. Anthony Fauci said yesterday that Americans should begin to see a turning point in the pandemic “within a few weeks.”

The United States had been averaging about 3 million Covid-19 vaccination shots per day, Fauci said. Meanwhile, the nation reported a seven-day average of 58,164 new Covid cases per day as of Sunday, according to data compiled by Johns Hopkins University. That’s down 14 percent from a week ago.

If the US continues its current vaccination pace, “literally within a few weeks, we’re going to start to see a turning around of the dynamics,” Fauci said Monday during a virtual event hosted by the Harvard School of Public Health.

More than 139 million Americans, or 42 percent of the total US population, had now received at least one dose of a Covid-19 vaccine as of Sunday, while almost one third of the population are fully vaccinated, according to the CDC.

Fauci has said the goal is to vaccinate between 70 percent and 85 percent of the US population — or roughly 232 million to 281 million people — to achieve herd immunity and suppress the pandemic.

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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