Synlait hits six-month high on Pokeno sale; NZX50 joins Asia rally
Manuka Resources enjoyed its first day as a New Zealand-listed company.
Synlait Milk hit a six-month high as investors welcomed the milk processor’s much-anticipated sale of its Pokeno site in the North Island, giving it the chance to further bolster its balance sheet and get its business back on track.
Meanwhile, New Zealand’s S&P/NZX 50 index joined a rally across Asia as investors pondered the prospect of a US federal government shutdown as President Donald Trump meets congressional leaders to keep the bureaucracy moving.
Fletcher Building paced local gainers as building and construction minister Chris Penk announced a new risk-based approach for earthquake-prone buildings to try to cut repair costs and encourage owners to upgrade their properties.
And Trans-Tasman Resources-parent Manuka Resources made its debut on the NZX with a secondary listing, enjoying a 21% gain, albeit from a low base.
On the rise
The NZX50 increased 20.83 points, or 0.2%, to 13,132.56, with 25 stocks gaining, 14 declining, and 11 unchanged. Turnover across the main board was $131.7 million, of which Fisher & Paykel Healthcare accounted for $16 million as it rose 0.4% to $36.65.
Stock markets across Asia were broadly stronger to start the week, following an upbeat cue from Wall Street on Friday and as investors spurned the greenback and embraced the relative safety of gold ahead of the Oct 1 deadline for the US federal government to avoid a shutdown.
Australia’s S&P/ASX 2100 index was up 0.6% in late trading, with miners and banks leading gains, while Singapore’s Straits Times Index increased 0.2% and Hong Kong’s Hang Seng advanced 1.3%. Japan’s Nikkei 225 was a laggard, down 0.7%.
The kiwi dollar traded at 57.84 US cents at 5pm in Auckland from 57.76 cents at 7am and 57.69 cents last week.
Investore Property led the benchmark index higher, up 2.6% at $1.19. Among other property companies, Precinct Properties NZ gained 1.2% to $1.30, Kiwi Property Group rose 1% to $1.04 on the biggest volume of the day at 4.2 million and Property for Industry advanced 0.8% to $2.45.
Get fixing
Fletcher Building gained 2.5% to $3.31 with the government announcing looser requirements for earthquake-prone buildings to reduce the cost for owners to upgrade their properties.
Meanwhile, Meridian Energy posted the biggest decline on the benchmark, falling 1.9% to $5.64, with Genesis Energy down 0.9% at $2.33, Mercury NZ slipping 0.5% to $6.57 and Contact Energy decreasing 0.3% to $9.04.
Outside the benchmark index, Synlait Milk climbed as high 84.5 cents – its highest level since late March – and ended the day up 16% at 81 cents after announcing the $307 million sale of its Pokeno factory south of Auckland to Abbot, which it will use to repay debt. The milk processor more than doubled its annual underlying earnings, with the bottom line still in the red.
“The fact that the market broadly rallied says their bankers will be pretty happy with this and they can get on an even keel and forget about what’s happened in the past,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.
Synlait’s result follows a strong year for larger rival Fonterra Cooperative Group, with units of the Fonterra Shareholders’ Fund up 0.5% at $7.951, while a2 Milk Co increased 0.4% to $9.66.
Manuka Resources – the parent of would-be ironsands miner Trans-Tasman Resources – jumped 21%, or 1.3 cents – to 7.5 cents in its first day of trading on the NZX with a secondary listing. Stock market operator NZX gained 1.5% to $1.38.
Reporting by Paul McBeth. Image from Curious News.
