Market close: SkyCity Entertainment falls 6pc on Austrac probe

SkyCity Entertainment slumped nearly 6 per cent on the New Zealand sharemarket after being told it was under investigation for possible breaches of anti-money laundering rules in Australia.

The S&P/NZX 50 Index didn’t hang about, closing 21.38 points or 0.17 per cent ahead at 12,517.65, after having a late dip. There were 75 gainers and 63 decliners over the whole market on strong volume of 87.05 million share transactions worth $335.73 million.

SkyCity Entertainment was down 21c or 5.74 per cent to $3.45 after telling the market it is being investigated by Australia’s financial system regulator Austrac for “potential serious non compliance” with anti-money laundering and counter-terrorism financing rules at its Adelaide casino.

SkyCity’s share price fell 6.5 per on the Australian ASX market Monday when the Austrac move was first made public. The price had recovered 1.25 per cent to A$3.22 on the ASX at 5.45pm (NZ time).

The investigation focuses on the casino’s management of customers identified as high risk and politically exposed between July 2015 and June 2016, and from July 2018 to June 2019.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said “we’ve seen the likes of Westpac and CBA banks hit with pretty hefty fines for historic breaches of anti-money laundering rules.

“SkyCity has a market capitalisation of $2.6 billion, and judging by the five per cent plus fall in its share price, the impact (of the investigation) on the business could be more than $130m,” he said.

Sullivan said the local market was in a holding pattern, and is being guided by the latest employment and inflation data in the United States. “The market has had a strong rally and it’s looking for more cues on things like interest rates and vaccine roll-outs.”

Market leader Fisher and Paykel Healthcare gained 15c to $29.15 on trade worth $57.91m; Fletcher Building, with plenty of construction activity taking place, increased 10c to $7.95; Chorus rose 10c to $6.58; and Spark picked up 9c or 1.93 per cent to $4.75.

Fishing company Sanford continued its strong run, rising 11c or 2.24 per cent to $5.03, after sitting at $4.40 on May 21. Synlait gained another 8c or 2.3 per cent to $3.56, and a2 Milk was up 8c to $6.15.

Meridian is reviewing its ownership of Meridian Energy Australia (MEA), which has 294MW renewable generation capacity and operates Powershop Australia. Meridian’s share price increased 7.5c to $5.40. Trustpower was down 16c or 1.84 per cent to $8.54.

Contact rose 17c or 2.12 per cent to $8.20 after putting out its May operating report. Contact’s mass-market electricity and gas sales declined slightly in May to 372GWh compared with the same month last year, but wholesale electricity sales increased to 846GWh. Hydro storage was at 72 per cent in the South Island and 41 per cent in the North.

Other gainers were Vista Group, up 4c or 1.85 per cent to $2.20; Accordant Group increasing 8c or 5.3 per cent to $1.59; Green Cross Health climbing 7c or 6.36 per cent to $1.17; and Me Today, picking up 0.003c or 3.09 per cent to 10c.

Milford Asset Management increased its shareholding in Eftpos provider Smartpay Holding from 11.07 per cent to 12.7 per cent, and Smartpay’s share price increased 6c or 7.14 per cent to 90c.

Retirement village operators Ryman Healthcare fell 19c $12.61 and Summerset Group Holdings was down 29c or 2.25 per cent to $12.61. Freightways decreased 18c to $11.97; Ebos Group was down 23c to $32.97; Air New Zealand fell 3.5c or 2.07 per cent to $1.655; Plexure Group shed 3c or 3.75 per cent to 77c; Rua BioScience declined 1.5c or 3.57 per cent to 40.5c; and NZ Automotive Investments decreased 5c or 4.76 per cent to $1.

Childcare operator Evolve Education Group fell 8c or 7.84 per cent to 94c after telling the market it has settled the purchase of 10 centres in Australia, taking its total to 135, though the New Zealand operations are running at 70 per cent occupancy because of teacher shortages. Evolve will begin paying quarterly dividends in September and forecasts operating earnings (Ebitda) of $16m-$18.5m for 2021 and $23m-$25m for 2022.

Livestock Improvement Corporation (LIC) is selling its automation business to a Merck & Co division, MSD Animal Health, for $138m. MSD operates Allflex Livestock Intelligence in Palmerston North where the automation will be integrated, and LIC’s share price was unchanged at $1.20.

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