MARKET CLOSE: NZ shares surge to record as market reopens; Synlait, a2 gain
By Sophie Boot
Aug. 29 (BusinessDesk) - New Zealand shares surged to a record as the market reopened after yesterday's platform
failure. Synlait Milk and A2 Milk Co led the gains.
The S/NZX50 Index gained 148.65 points, or 1.6 percent, to 9,362.67. Within the index, 35 stocks rose, 8 dropped and 7 were
unchanged. Turnover was $216.8 million.
Yesterday the local market was suspended for most of the day due to system faults. NZX is investigating the cause, which
it aims to have completed within a week.
"I don't know if there's a bit of pent-up buying from yesterday, but it's having a stellar day," said Robert Garden,
investment adviser at Craigs Investment Partners. "There's nothing specific about it though. A lot of the bigger market
cap stocks are having a good run today.
"It's a bit of continuation on the recent momentum the market has had through reporting season, with interest rates
looking to stay lower and our dollar falling away probably boosting some of the export stocks," Garden said
Synlait led the index, up 5.2 percent to $13.15, while a2 rose 4.4 percent to $12.93. Garden said sentiment had improved
after ASX-listed Bellamy's Organic, which sells infant formula and food, today reported a A$43 million net profit for
2018, turning from a loss in the previous year.
"It was a reasonable result. In terms of infant formula and baby products through to China they've had a reasonable
recovery. There's just a bit more confidence coming back into the market and looking at some of those stocks like
Synlait and a2 that have been sold off in more recent times," Garden said.
Summerset Group Holdings rose 4.5 percent to $7.90, Fletcher Building gained 3.5 percent to $6.57, and Westpac Banking
Corp advanced 3.1 percent to $31.20.
Contact Energy was the worst performer as it gave up rights to a 19 cent final dividend, dropping 3.1 percent or 18
cents to $5.60.
Genesis Energy dropped 2 percent to $2.515. It reported an 8 percent increase in full-year operating earnings to $360.5
million after dry, still weather boosted demand for coal- and gas-fired generation from its Huntly site. The company
invested $80 million last year, including upgrades at Tekapo, Tuai and Tokaanu, integrating the new LPG business and new
digital retail products.
"Without the acquisitions they made through the year, the rest of the group was down $15 million in terms of earnings,"
Garden said. "It's had a reasonably strong run until the last few days. Coming back to interest rates, there's going to
be support in terms of the dividend on it."
Sky Network Television dropped 1.2 percent to $2.40 and Z Energy fell 0.7 percent to $7.22.
Outside the benchmark index, Vista Group International rose 3.5 percent to $4.16. It expects to maintain sales momentum
through the rest of the year as the acquisition of a Latin American cinema analytics reseller helped boost first-half
profit 36 percent to $5.2 million.
The Auckland-based cinema software developer lifted first-half revenue 20 percent to $60.1 million and said it expects
to maintain that pace of expansion through the rest of calendar 2018. If it does achieve 20 percent or more revenue
growth for a fifth straight year, that take annual sales to $127.9 million. That's more than four times Vista's revenue
in 2013, before it went public.
"Good revenue growth and good cash generation from the businesses as well. They probably needed to come out with decent
numbers given the stock has run pretty hard since April. It's more or less met the relatively optimistic expectations of
the market," Garden said.
Methven rose 3.9 percent to $1.08. The tapware designer lifted annual profit 22 percent as it earned more from
international sales while New Zealand weakened. It expects better domestic growth in 2019.
Steel & Tube Holdings rose 3.5 percent to $1.20. It says improving sales have continued into the current financial year and it
expects to resume dividends as its business overhaul begins to pay off. The company reiterated its loss on an earnings
before interest and tax basis was $36.2 million in the year ended June 30 while normalised ebit was $16.5 million.