MARKET CLOSE: NZ shares hit record on A2 gains, Eroad up, Auckland Airport falls
By Sophie Boot
Oct. 5 (BusinessDesk) - New Zealand shares hit a record, led higher by A2 Milk and Synlait Milk continuing to gain,
though the market was mixed with blue-chips like Auckland Airport falling.
The S/NZX 50 Index rose 25 points, or 0.3 percent, to a record 7,974.7. Within the index, 24 stocks fell, 14 rose and 12 were
unchanged. Turnover was $145 million.
Synlait was the best performer, rising 7 percent to $6.90, while A2 gained 5.7 percent to $7.26, meaning both stocks hit
fresh records today. The two stocks have gained since last Thursday - Synlait up 17 percent, and A2 up 11 percent - on
confirmation that their brands and recipes have gained registration in China, removing an obstacle in a market with
soaring sales, before both giving up gains yesterday. They have had strong years so far, rising 207 percent and 110
percent respectively.
"A2 is the stock that won't stop, it will be our largest listed company soon - it's got a market cap over $5 billion,
which is pretty impressive for a company which was only worth a few million a few years ago," said Grant Williamson,
investment advisor at Hamilton Hindin Greene. "It has made up a good chunk of the index's overall rise this year, it
could be as much as a third, so that success has probably distorted the overall rise in the index. There are few signs
of it slowing down at the moment, but when something has gone up as fast as A2 has, profit taking takes over at some
stage, and it will be in for a pretty big correction when that happens."
Auckland Airport was the worst performer, down 2.6 percent to $6.27. Shareholder Peter Wakemen is seeking support for
three proposals to safeguard the company from possible future fuel supply disruption, to cut carbon emissions and to
lobby the government to use so-called "debt-free money" to fund climate initiatives.
The board of directors said it does not support the proposals ahead of its annual general meeting on Oct. 26 but is
unanimously in favour of the re-election of two board members, the election of a new nominee and a slight increase in
directors' remuneration.
Meridian Energy fell 1.7 percent to $2.82 and Mercury NZ dropped 1.6 percent to $3.355.
Outside the benchmark index, ERoad climbed 18.1 percent to $2.68 after the company continued to gain traction in the US
in the latest quarter ahead of the December deadline for logistics firms to adopt and use electronic logging devices.
The Auckland-based company sold 2,313 units in the US in the three months ended Sept. 30, taking its total units in the
US to 9,736. In its established Australian and New Zealand markets, sales rose 11 percent to 49,802. The 7,086 units
sold in the quarter was a new record for the company in both markets, and chief executive Steve Newman has previously
said the 2018 financial year will likely post its biggest ever sales.
Williamson said investors have been re-rating the stock which has seen volatility over the past two years, but the
latest two quarters have delivered positive results.
(BusinessDesk)