A2, Air NZ lead index up
Fletcher recovers from 5-year low
New Zealand shares rose, led higher by another strong day for a2 Milk Co after signing a supply deal with Fonterra Cooperative Group, while Air New Zealand gained on a higher interim dividend. Tourism Holdings fell despite beating earnings expectations.
The S&P/NZX 50 index increased 66.61 points, or 0.8 per cent, to 8266.88. Within the index, 17 stocks gained, 29 fell and four were unchanged. Turnover was $229 million.
A2 Milk led the benchmark index higher, rising 9.8 per cent to $12.90 as investors continued to rally behind the milk marketing firm after it stitched up a supply arrangement with Fonterra and reported stronger first-half earnings than anticipated. The company’s market capitalisation rose above $10 billion during the day, placing a bigger value on it than Fonterra’s $9.77b, although at the end of trading a2 was worth $9.42b.
“At one stage we [the NZX 50] were nearer to 2 per cent — it shows how much of a swing it’s been,” said James Lindsay, a portfolio manager at Nikko Asset Management.
Fonterra Shareholders’ Fund units rose 1.2 per cent to $6.10, while a2’s existing supplier, Synlait Milk, gained 1.5 per cent to $6.75, recovering some of Wednesday’s selloff.
Air NZ rose 1.2 per cent to $3 after the national carrier lifted its interim dividend, despite posting a 7.4 per cent decline in first-half earnings over rising fuel costs.
Fletcher Building gained 1.7 per cent to $6.50, recovering from a fiveyear low after Wednesday’s earnings result portrayed a soggy outlook for the construction firm’s other units. SkyCity, which is facing off with Fletcher over the escalating cost of building the Auckland international convention centre, fell 4 per cent to $3.87, the biggest decline on the benchmark index.
Tourism Holdings fell 2 per cent to $5.92, despite doubling first-half profit on its North American expansion and a lower US tax bill.
Chorus fell 2.6 per cent to $3.79 ahead of its Monday first-half report, which Forsyth Barr analysts predict will show declining earnings on connection losses. Spark has been migrating customers on to alternative wireless and fibre networks in an effort to reduce its wholesale costs. Spark shares rose 0.8 per cent to $3.345.
Among companies reporting today, Port of Tauranga fell 0.4 per cent to $4.99, Comvita was unchanged at $8.38, Steel & Tube fell 1.4 per cent to $2.06, Delegat Group gained 1.5 per cent to $7.62, and Summerset Group slipped 0.2 per cent to $5.81.
Outside the benchmark index, NZME increased 1.3 per cent to 77c after the Herald’s publisher and radio station owner reported a smaller decline in annual earnings than anticipated, maintaining its final dividend against expectations.
Dual-listed Michael Hill International was unchanged at $1.16 after reported a 66 per cent slump in firsthalf profit.
Allied Farmers was unchanged at 10.2c after the rural services firm reported a 71 per cent slide in firsthalf profit.
TeamTalk rose 1.1 per cent to 95c after lifting first-half profit 59 per cent after shedding its unprofitable Farmside rural broadband business.
Tegel Group fell 1 per cent after warning annual profit may fall by as much as $2 million from disruption at its New Plymouth plant from excyclone Gita. —