Market News 28 October 2025

Johnny Lee writes:

Infratil has confirmed it has purchased more shares in Contact Energy, buying the 4.92% stake held by TECT Holdings. TECT was formerly known as Tauranga Energy Consumer Trust, and was the other major shareholder in Manawa Energy alongside Infratil. Like Infratil, TECT acquired its shares in Contact after the Manawa takeover.

Infratil paid TECT the equivalent of $8.95 for each share, funded with an even mix of cash and new Infratil shares. This effectively means that Infratil shareholders have seen a modest dilution in exchange for the increased holding.

The acquisition puts to bed any thoughts of Infratil exiting the sector in the short-term. Its Manawa holding was always too large to offer liquidity – until Contact’s offer – but Contact Energy shares are significantly more liquid.

Infratil’s stake in Contact Energy is now 14.3%, valued north of $1.3 billion and producing around $50 million a year in dividends. It is now comfortably the largest shareholder of Contact Energy, while TECT will become a small, but significant shareholder of Infratil.

Infratil’s holding in Contact Energy will sit beside its Vodafone/One NZ holding, as a core, cash-generative business, providing reliable income to the broader portfolio. Electricity generation has long existed within Infratil’s wheelhouse, 

The vote of confidence from Infratil sent the Contact Energy share price higher, which rose around 5% following the announcement. The increase in holding is consistent with Infratil’s earlier messaging about holding fewer, but larger stakes in its portfolio. It cements itself as the company’s largest shareholder and gives the company a slightly greater level of control over the fortunes of the business.

Infratil is scheduled to provide its half year results on the 13th of November.

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The NZX issued a rare “Trade with caution notice” last week, urging equity investors to take care when trading in listed company Being AI. The NZX last used this tool in 2024, when it issued the same warning for the same company.

Being AI was also suspended from trading in February of this year, after the NZX stated Being AI no longer met governance requirements specific to the minimum number of independent directors.

The warning was prompted by the sudden, unexplained increase in the company’s share price. Being AI’s share price had risen 150% over the last month, before falling after the NZX announcement. Volume has seen an uptick, particularly in the retail sphere, with trades worth thousands, rather than millions.

Being AI is not profitable and pays no dividends to its shareholders. It would not feature in any income investors portfolio. Its market capitalisation of $25 million places it alongside other small caps such as Move Logistics and Allied Farmers. 

Nevertheless, Being AI appears to have captured the imagination of many small retail investors, whose enthusiasm for the company’s shares has prompted the NZX to issue a public warning. 

Judging by the market reaction, the warning has had its desired effect.

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EROAD’s recent announcement to the stock exchange led to a rapid revaluation, as investors weighed the opportunity facing the business.

Guidance for next year was lower, with the company citing slowing growth out of North America. The company also lost a large North American transport customer. EROAD stated it expects to mark an impairment of its North American assets up to $150 million.

The EROAD’s share price fell over 30% after the news. It remains up strongly for the year, up 70%.

EROAD intends to host an Investor Day in March next year, but used the announcement as an opportunity to highlight its intention to pursue opportunities within Australia and New Zealand. Chief among these will be the opportunity presented by a possible move towards further usage and time-of-use charging of roads.

Indeed, much of the excitement which led to this 70% increase in share price was founded upon this possibility. Shareholders will no doubt be excited to see this take shape and hear more about how EROAD intends to capitalise on further moves in this space.

For now, the downgrade and large impairment have sent the price lower. It remains well up from the start of the year, as investors look forward to hearing more about the company’s plan to further tackle opportunities closer to home.

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Heartland Bank has provided an update, following the conclusion of a strong first quarter.

Profitability, return on equity and net interest margin are all improving. The Reverse Mortgage book was particularly strong, while Heartland continues to exit Non-Strategic Assets.

The Reverse Mortgage business saw receivable growth of $43 million for the quarter in New Zealand, and $86 million for the quarter in Australia. This continues to be a core engine of growth within the company’s book. 

Heartland continues to exit out of its non-core lending, particularly in the Home Loans business. Heartland’s decision in March to discontinue the Home Loan products was part of this move out of Non-Strategic Assets, as the company focuses on higher value sectors.  

Heartland also sold its entire Harmoney shareholding, as well its shareholding in Alex Bank. Coupled with the decision to repay its $100 million AUD medium-term note two years ahead of schedule – paying penalty fees in the process - it seems clear that the team at Heartland are making a concerted effort to tidy up its books and simplify its focus.

Economic conditions remain challenging, particularly for the New Zealand business. However, costs are being controlled, while its Reverse Mortgage business - on both sides of the Tasman - continues its impressive growth.

An Investor Day is scheduled for later this year, where the company is expected to provide a further update to its long-term plans. 

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David Colman writes:

Friday marked the one-year anniversary of the NZX listed Bitcoin (BTC) and Gold (GLD) Smart ETFs.

The listings above provided New Zealanders with a convenient way to gain exposure to either the world’s largest cryptocurrency and/or the world’s most traded precious metal.

Since listing a year ago, the funds have increased in value dramatically.

BTC is up 65% (from $2.50 to $4.15) assisted by investors looking for digital alternatives to more traditional financial assets. Bitcoin first appeared in January 2009.

GLD is up 53% (from $2.50 to $3.89) with central banks, institutions, and retail investors attracted by an historically safe-haven asset often seen as protection against a market downturn, and inflation.

The GLD ETF was a long awaited addition to the Smart range of NZ listed ETFs with gold used as a store of value for thousands of years.

The two ETFs are classified as higher risk with BTC assigned a 7, and GLD assigned a 6, out of 7 on the NZX’s Smart ETF risk scale.

Neither ETF provide income as neither bitcoin or gold are productive assets.

It would be incredible if the returns in the past year are replicated and it has been a fascinating year in which Bitcoin has been frequently described as digital gold which is a view I do not share. Gold is a real physical material that doesn’t require computers to exist.

Any investors that added small exposures to the above when they listed would have benefited since and the Smart ETF team should be applauded for bringing more asset types within easy reach of investors.

The environment of NZX delistings and greater investor awareness of internationally traded securities may push the exchange to offer yet more ETFs under the Smart ETF banner.

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Travel

27 October (Labour Day) morning – Arrowtown – Chris Lee28 October (morning) – Arrowtown – Chris Lee30 October – Auckland (Albany) – Edward Lee31 October – Auckland (CBD) – Edward Lee

12 November – Levin – David Colman

13 November – Whanganui – David Colman

14 November – New Plymouth – David Colman

19 November – Napier – Edward Lee

20 November – Havelock North – Edward Lee

26 November – Auckland (Ellerslie) – Edward Lee

27 November – Auckland (Albany) – Edward Lee

Johnny Lee

Chris Lee & Partners Ltd