Supplied
Comvita honey apiarist beekeepers at work. (File photo)
The sharemarket was mixed in holiday trading with honey company Comvita getting “a slap on the wrist” for a lack of clarity.
The benchmark S&P/NZX 50 Index edged up 0.4 points to 11,916.87 on the first day of the winter school holidays on Monday. On the broader market 60 stocks rose and 69 fell with $80 million shares traded.
Comvita rose 4.5% to $3.04 after the manuka honey exporter announced it had signed a significant long-term partnership with Ole Supermarkets in China, which it said was one of nation’s largest premium retail chains with more than 100 stores across mainland China.
Comvita chief executive David Banfield signed the memorandum of understanding (MOU) with Ole during Prime Minister Chris Hipkins’ recent trip to China with a business delegation.
The honey company’s shares were halted from trading by the NZX regulator RegCo while it amended its announcement to provide more detail for investors.
The company’s initial announcement at 8.30am said it had signed a “multimillion dollar” MOU in China, without providing details.
The reference to “multimillion dollar” was dropped in an amended statement released at 12.37pm, and the company added that it was in the process of finalising the details of a future supply agreement and its associated implementation plan.
“Once these are agreed, Comvita will update the market in line with its disclosure obligations,” the company said in the amended statement, which also added that the agreement would not impact its guidance for the 2023 financial year.
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PM Chris Hipkins has met with Chinese President Xi Jinping.
“The company was asked to amend their announcement by NZ RegCo, the regulators, as it wasn’t perhaps specific enough,” said Hamilton Hindin Greene investment adviser Jeremy Sullivan.
“They were then chucked into a trading hold by the regulators and they had to come out with an amended announcement later in the day, which had some more specifics around it.”
Sullivan said that the market is price sensitive and the company’s initial wording had not been specific around the “multimillion” value of the MOU or when the deal would impact earnings.
“They weren’t specific around was it $2m or $200m, and is it going to affect your earnings today or next year? That would lead investors to fill in the gaps and could create some pricing instability that was unwarranted,” he said.
Sullivan said the share price gain showed the announcement was clearly positive, even once amended.
“I think the regulators were just trying to seek some more clarity from Comvita, and potentially they got a bit of a bit of a slap on the wrist for not being as clear as they could be for what was obviously a positive announcement for the company,” he said.
Ebos Group gained 2% to $37.50. The stock is down 14% this year after the healthcare products distributor confirmed last month that its five-year contract with Chemist Warehouse in Australia would not be renewed when it expired at the end of June next year.
“The stock’s been a little volatile obviously with their downgrade recently,” Sullivan said. “Bargain hunters are seeing some opportunities to pick up a blue chip whilst prices are a little depressed.”
Over in Australia, cloud accounting firm Xero announced that founder Rod Drury would retire from the board after the company’s annual meeting on August 17, having served as an executive director for 12 years and a non-executive director for five years.
The kiwi tech entrepreneur will remain as an advisor to the business, supporting the board and chief executive Sukhinder Singh Cassidy, the company said.
Xero said Drury had been integral to the company’s success, culture and strategy throughout his tenure as its founder, chief executive and director.
Sullivan said Drury had been stepping back from the business for some time, which he said was a natural progression.
While Drury would clearly be a loss to the business, Sullivan noted that he planned to stay involved from a consulting perspective.
Xero shares slipped 1% to A$117.64 in afternoon trading on the ASX, valuing the company at A$18 billion (NZ$19b).
