Tourism Holdings bounces as NZX trades flat on low volumes

The benchmark S&P/NZX 50 climbed 0.09% to 12,689.63 points on Tuesday, with 27.5 million shares changing hands, amounting to $92.2m in value traded.

It was the second day investors failed to stump up $100m on the exchange this week.

Paul Robertshawe, Octagon's chief investment officer, said investors may be taking a breather ahead of earnings season, which will kick off in mid-August.

“There’s lowish volume going into the reporting season. I guess people have got their positions set in and are waiting and watching.”

The NZX

Briscoe Group compounded Monday’s gains, lifting 3.1% to 5.99.

Robertshawe said the stock is continuing to benefit from joining the share market's main index in June.

“It shouldn't happen this way, but it does, just because it's in the 50, more people are looking at it, and so you'll get more people researching it.”

NZ's largest electricity lines company, Vector, rose 2.26% to $4.53.

According to Robertshawe, a couple of analysts from broking houses ("I think Forsyth Barr and Jarden") have upped their longer-term forecast and valuations for the stock recently.

Tourism Holdings (THL) gained 9.09% to $2.16 on volumes worth just over $63,000.

The campervan company informed the market in June that it had received a buyout offer. The $2.30 per share offer price represented a 57.5% premium over the at-the-time trading price of $1.46.

“It got under $2 when there's a bid at $2.30, potentially just around the corner. That seems a bit wrong. So that's not a surprising move,” Robertshawe said.

Another company that is potentially being taken over, Vital, was up 1.16% to 43.5 cents.

In June, Tait Communications, a Christchurch-based critical communications systems provider, made a formal offer to purchase the company for 45c per share and 13c per employee option.

A significant product holder (SPH) notice released to the NZX by Vital on Tuesday showed Tait had upped its stake to 30.4%.

The US

Unlike the United States’ S&P 500 and the Australian bluechip ASX 200, which are trading at all-time highs, the NZX 50 is still down nearly 3% for the year to date.

Overnight, President Donald Trump threatened Russia with “severe” tariffs and other financial penalties if the war in Ukraine does not end soon, in a meeting with Nato secretary general Mark Rutte.

That came after Trump said he would impose a 30% rate for Mexico and the European Union, which would kick in on Aug 1 if they do not accept better terms in the ongoing trade discussions with the two trading partners.

Robertshawe said a state of inertia has set in and that markets appear to be ignoring news that would, in normal circumstances, move global stocks.

"Risks are clearly higher than February, even if a tariff is stuck at 10%, it's still higher than they were before then. Earnings have been downgraded to 3% to 4% globally, and markets are at new highs.

"The market's saying, 'despite it being riskier than it was, I'm happy to pay more for stocks'. And I think that is hard to understand from a fundamentals perspective."