INDEPENDENT NEWS

MARKET CLOSE: NZ shares up on A2 Milk rebound

Published: Thu 24 May 2018 08:30 PM
MARKET CLOSE: NZ shares up on A2 Milk rebound; Fletcher, Comvita drop
By Sophie Boot
May 24 (BusinessDesk) - New Zealand shares gained as A2 Milk Co rebounded from recent selling, while Fletcher Building and Comvita fell.
The S/NZX 50 Index rose 37.54 points, or 0.4 percent, to 8,590.77. Within the index, 23 stocks rose, 17 fell and 10 were unchanged. Turnover was $169 million.
A2 Milk was the best performer, up 4.1 percent to $10.66. The milk marketer's shares slumped 13 percent last week and a further 9.3 percent this week after it missed expectations, prompting some analysts to reassess what have been optimistic assumptions for the company's outlook, and it dropped 2.3 percent yesterday.
"It's continuing its recent extreme volatility, and the reason for that is there appears to have been some relatively strong shipment data from the Port of Lyttelton where a good deal of their product is shipped from. It's data that quite a few people subscribe to," said Matt Goodson, managing director at Salt Funds Management. "The previous period was affected by strikes, so just how much should be read into that, I don't know. The stock is very volatile in both directions at the moment."
Pushpay Holdings gained 2.2 percent too $4.18, Argosy Property rose 1.9 percent to $1.065, and Kiwi Property Group advanced 1.8 percent to $1.39.
Fletcher Building was the worst performer, dropping 2.4 percent to $6.47, while Air New Zealand fell 1.6 percent to $3.30.
Comvita dropped 2.2 percent to $5.80. On Monday, the honey products exporter said it had pulled out of talks with an unnamed third party looking to take it over as it couldn't reach a deal on price. The stock has dropped 14 percent this week.
"It's had two bad seasons in a row, the question is what does a normal season look like, and what is it worth based on a normal season," Goodson said.
Metlifecare dipped 0.2 percent to $5.99. It will build a $180 million retirement village in Auckland’s Beachlands, one of the ‘greenfield’ sites the industry has been busy sewing up in the past 12 months.
Outside the benchmark index, Metro Performance Glass rose 7.3 percent to 88 cents. Its full-year profit fell 16 percent to $16.3 million, in line with guidance it gave in April, because of softer growth in New Zealand and capital programme disruptions in Australia.
Sales rose 10 percent to $268.3 million, including 12 months of trading from Australian Glass Group. Earnings before interest and tax before significant items were $30.9 million versus $33.9 million in the prior period.
"The result was largely as forecast and the guidance for next year maybe a smidgen below, but I think relief there wasn't a further earnings miss," Goodson said. "Their balance sheet is not pristine, so perhaps also relief that they delivered the result and there was no capital raise or anything like that. It's quite operationally and financially leveraged to the New Zealand housing and construction cycle, which they've said is at something of a plateau at the moment."
(BusinessDesk)
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

Government accounts show strong economy
By: New Zealand Government
OceanaGold cleared to buy land for Waihi tailings expansion
By: BusinessDesk
Fletcher sued for $7.5m over Christchurch justice precinct
By: BusinessDesk
PHARMAC signs bundle deal for more cancer medicines
By: PHARMAC
Government levels electricity playing field for consumers
By: New Zealand Government
NZ dollar rises on better-than-expected govt surplus
By: BusinessDesk
Rail revaluation bolsters Crown 2019 accounts
By: BusinessDesk
Shane Jones' PGF quietly made tax-exempt
By: BusinessDesk
Robertson’s pockets bulge as everyday Kiwis struggle
By: New Zealand National Party
DHB deficits out of control, health services at risk
By: New Zealand National Party
Green Party responds to Government surplus announcement
By: Green Party
Nearly $2 of every $5 swallowed by the Government
By: ACT New Zealand
NZEI Te Riu Roa welcomes Government's education spending sig
By: NZEI
Give the money back, Grant
By: New Zealand Taxpayers' Union
Surplus should be spent on housing, health and services
By: Public Service Association
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media