They again had a record close with the Dow gaining 0.48% to 49,504.7 points and the S&P 500 increasing 0.65% to 6,966.28. The Nasdaq Composite was up 0.81% to 23,671.35 points at the weekend (NZ time).
The US markets shrugged off a weak jobs report and cheered a drop in unemployment from 4.6% to 4.4%, beating a forecast of 4.5%. The US economy added 50,000 non-farm jobs in December, missing the 73,000 estimate and slowing from November’s revised 56,000 gain.
At home, California-based global family business Bourns is making a full takeover bid for Auckland-based Rakon at $1.55 a share – a 72% premium to Friday’s closing price of 90c. Rakon’s share price closed at $1.36, a rise of 46c or 51.11%.
Bourns, which supplies electronic components from 20 manufacturing facilities worldwide, said Rakon’s frequency control products would complement its own offering, and Rakon would operate as a standalone division retaining employees and existing research and development capabilities.
Rakon’s three largest shareholders, Robinson Family, Taiwan-based Siward Crystal Technology Co and Wairahi Investments, as well as Timemaker, are backing the offer – representing 41.2% of the total Rakon shares on issue.
Matt Goodson, managing director of Salt Funds Management, said the Rakon takeover was a cash bid from a credible party and there’s a lock-up agreement with key shareholders.
He said Rakon stock was trading at $1.36, suggesting a modicum of doubt about the takeover.
“There’s still a bit of water to flow under the bridge in terms of an independent valuation report.”
Goodson said the Rakon takeover bid adds to the number of smaller companies outside the NZX top 50 disappearing from the market.
“That’s a real concern. These companies don’t get the benefit of research coverage and passive investment, and the costs of being listed and the regulatory conditions may be too high for them.
“You may well see this trend continue with the economic outlook improving. Potential buyers will have greater confidence in earnings projections from the smaller companies,” Goodson said.
Other stocks
Gentrack rebounded 27c or 3.21% to $8.67; Napier Port increased 9c or 2.37% to $3.89; Sanford added 19c or 2.48% to $7.85; Serko was up 6c or 1.9% to $3.21; Vulcan Steel gained 19c or 2.17% to $8.94; and AFT Pharmaceuticals improved 7c or 2.01% to $3.55.
The retail sector had a good day. Briscoe Group was up 10c or 1.94% to $5.26; Hallenstein Glasson added 15c to $10.05; Michael Hill rose 3c or 6.59% to 48.5c; and The Warehouse collected 2c or 2.74% to 75c.
The mining stocks are in favour on the back of the strong run in gold and silver prices. Santana Minerals increased 8c or 7.11% to $1.20, and Manuka Resources rose 2.9c or 18.47% to 18.6c. But Minerals Exploration was down 1c or 3.92% to 24.5c.
The gold price has reached record levels of nearly US$4570 (NZ$7956) an ounce, and silver traded at US$83.32 an ounce, up 5%.
Freightways was down 14c to $14.12; a2 Milk decreased 10c to $10.68; Sky TV shed 6c to $3.40; Eroad declined 2.5c or 2.02% to $1.21; and Goodman Property Trust shed 4c or 1.98% to $1.98.
Among energy stocks, Meridian was down 11c, or 1.94%, to $5.55, and Contact eased 6c to $9.23.
Goodson says energy will be an interesting sector to watch this year. There is political pressure on electricity prices. As well, the energy companies have big development plans, and the question is: Will they get a reasonable rate of return from their investments?
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